An Ardmore legislator has been recognized by the Oklahoma Independent Petroleum Association (OIPA) for his efforts to protect the state’s tax provision for economically at-risk oil and natural gas wells.
Rep. Pat Ownbey was named “Legislator of the Year” by the association after he led the debate on the floor of the House of Representatives against Senate Bill 1577, which would have eliminated the state’s tax provision for economically at-risk wells. At Ownbey’s urging, the bill was amended in the House to cap the state’s economically at-risk well provision at $12.5 million and apply the provision only to wells that produce the equivalent of 10 barrels of oil per day or less.
“The at-risk tax provision keeps many oil producers whole during these very tough economic times,” said Ownbey, a Republican first elected to the House in 2009. “We are an energy state and we have to be careful we don’t take so many of these tax provisions away that we’re shooting ourselves in the foot.”
Enacted more than two decades ago, the economically at-risk tax provision provides temporary relief for Oklahoma businesses in times of economic uncertainty that low commodity prices bring by reducing the tax burden on oil and natural gas wells that operate at an economic loss. Those at greatest risk are the more than 80,000 marginal wells across the state.
“Individually, these wells only produce a small amount of oil and natural gas,” OIPA President Mike Terry said. “As a collective, however, they account for more than 20 percent of all oil and natural gas produced in Oklahoma. The at-risk provision ensures those wells are not closed during challenging economic years and that they continue to produce and generate tax revenue when commodity prices rebound.”
