Present system works for energy industry

Irecently walked the floor at the Oklahoma Oil & Gas Expo at the state fairgrounds. More than 150 exhibitors promoted their businesses to the 2,500 attendees from Oklahoma’s oil and natural gas industry. It was eye-opening.

At the Capitol, the energy industry is oftentimes only represented by the gross production tax, which is paid by oil and natural gas producers. It’s one of the few budget line items directly linked to oil and natural gas and it’s also one of the state’s most significant sources of income, trumped only by income tax, sales tax and motor vehicle tax collections.

But the businesses that support oil and natural gas producers — the vast majority of those represented at the expo — don’t pay gross production tax. Their employees do pay income taxes. They do pay sales tax on equipment used in their day-to-day business. And they do pay motor vehicle taxes on the fleet of cars and trucks they use throughout the oil field.

The economic benefit those companies bring to Oklahoma is great and reaches every county in the state.

I represent Moore. It’s not known as an oilfield town. But at the expo, I met David Keel and Chris Stubs, account managers for Evans Enterprises. The company that sells and services electric motors for the oil field recently built a new facility, investing $8 million to build a cluster of buildings off I-35 in the south end of District 53, which I represent. The expansion added 35 jobs to my district, and more importantly, added 35 taxpayers for the state.

Evans Enterprises isn’t alone. In August, the state added 1,600 workers to the oil and natural gas industry as it continues to rebuild after a historic downturn in commodity prices. That’s 1,600 new Oklahoma taxpayers — friends, neighbors, little league coaches, church deacons — who are generating tax dollars as they go to work in Oklahoma’s oil fields.

Companies like Evans Enterprises and the thousands like it are the reason lawmakers must do everything in our power to ensure Oklahoma’s oil and natural gas operating arena is competitive with other energy-producing states. These companies only thrive in a growing and vibrant oil and natural gas industry.

We have a gross production tax system that encourages companies to explore for and produce Oklahoma oil and natural gas. Increasing the tax and removing our state’s economic advantage means fewer investment dollars for Oklahoma and more for other energy states. Exploration and production wouldn’t stop, but it would slow, and a portion of the people working in Oklahoma would work in other parts of the country.