Energy battles

Oklahoma’s wind subsidies are dwarfed by subsidies to the oil and gas industry

One certainty about the 2017 legislative session is that tax breaks for the wind industry are going to be a prime target for lawmakers hoping to address the state’s short-term and long-term budget deficit. Close to 20 bills have been filed that would limit or eliminate subsidies for wind producers, and Governor Fallin’s latest budget proposal called for wind production to be taxed.

While it is true that subsidies for the wind industry have been rising, they still pale in comparison to Oklahoma’s subsidies for the oil and gas industry. Oklahoma’s standard tax rate of 7 percent on oil and gas production has been in effect since the 1970s, but over the years, various exemptions were put in place to subsidize different kinds of production. Now, under legislation passed in 2014, almost all new wells are taxed at just 2 percent for the first 36 months of production before reverting to the standard 7 percent rate. In addition, horizontal wells and deep wells drilled prior to July 2015 are taxed at 1 percent and 4 percent respectively for 48 months.

David Blatt is Executive Director of Oklahoma Policy Institute. For the rest of this article and more, visit okpolicy.org.