Miller: Willingness Exists To Look At Overall Oil
State Treasurer Ken Miller says he believes state officials and those in the energy industry are willing to consider a change in the way oil production is taxed.
Miller’s remarks came just a few days after House Speaker T.W. Shannon announced he will introduce legislation to make permanent the 1 percent tax on horizontal drilling.
“I think there is some willingness to look at changing the overall (gross production-oil) tax code and just lowering the rate on all the production and incentivizing the norm,” Miller said .
Miller was the author in 2010 of the latest version of the horizontal and deep drilling incentive. The original incentive passed in 1994 and provided a rebate of six-sevenths of the gross production tax on oil and applied to the first 24 months of the deep and horizontal wells’ operation or the payback of its costs. Miller said the incentive was amended in 2002 to remove the payback provision and extend the time period to 48 months.
His 2010 measure ended the rebate and replaced it with the lower rate structure for the first 48 months of the wells’ lives. Miller said deep and horizontal wells make up approximately 90 percent of all production in Oklahoma.
“So you do have the question whether it makes sense to have an incentive for something that is done most of the time," Miller said.