If there’s one thing about which I know very little, it is oil and gas drilling. I don’t know the jargon, I don’t know what a landman does, and I sure don’t know how something black coming out of the ground turns into the gas that goes into my car. I should be embarrassed, and I am.
I do know oil is in the ground, a natural resource. I know that natural resources are where they are, meaning they can’t be moved like cattle or pigs. And after reading about the boomlet in oil production which the Oklahoman reported on a few weeks back I know that producers stand to make a lot of money from plays in the SCOOP and STACK regions in our state.
Companies from Texas and Colorado, as well as start-up smaller producers are buying land in these regions, using their analysis of the geology, along with improved drilling techniques, to extract oil from places previously thought of as dry. One oil company owner even said, “I believe we’ve only scratched the surface of this exciting upside.” Another company plans to build a natural gas processing and gathering system in Hughes County! I’m not sure what that means exactly, but the article mentioned its value at $400 million!!
A few months ago, I sat in the Oklahoma Senate chamber while the senators debated a bill about horizontal wells of up to two miles in length. I didn’t know that the ramifications of that bill’s passing are that another 1,200 new locations are now open for one company to drill. That’s exciting news for Oklahoma’s future, our children, and those who teach them.
I don’t have to know a lot about oil and gas production to know that these companies aren’t going to leave such an exciting and potentially lucrative play for others to develop. Some of them will make money, and they should. The upfront cost of being a driller seems to be astronomical, but the payoff must be worth it.
I don’t think it’s too much to ask that while these companies are literally moving to Oklahoma to get in on the game, and our own are expanding, for them all to pay more in gross production taxes. Other producing states pay over 11%. Surely we can do better, not be so short-sighted, and find a compromise on a fair rate. The alternative has negative ramifications for decades to come.