Point of View: Tribe's unilateral actions hurt Oklahoma oil-gas businesses
As someone active in Oklahoma’s oil industry, I am dismayed at the recent actions of the Seminole Nation. Attempting to create a new taxing entity threatens investment in the state’s most significant industry, will result in capital fleeing Oklahoma and will put at risk many companies already in a precarious situation.
I respect tribal sovereignty. I have great respect for the approach taken by those Oklahoma tribes seeking to work with the state in finding a solution to the U.S. Supreme Court's McGirt decision on criminal law. Together, we need to focus on these things that unify us, not those that divide. With this common goal, a solution is attainable.
We also have a common goal when it comes to our economy. Those residing in tribal areas want investment and jobs. A rising tide does lift all boats. This is why the renegade actions of one tribe are so troubling. For one nation to apply this court decision on criminal law to civil law is a selfish act that will prove detrimental to Oklahoma and that nation. This action disincentivizes investing in any tribal nation where similar actions may occur. This move should be rebuked by Oklahomans and by those tribes with a history of working with, not against, their fellow Oklahomans.
Oklahoma has to enter into working agreements with the tribes. The uncertainty around yet another level of regulation and taxation will create a morass too uncertain to navigate. While a tribe might seek immediate funds from taxing existing investment, it can rest assured that it will be the last. And who pays the price? Oklahomans and their families.
Complicating this issue is that many Oklahoma “mom and pop” oil companies are hanging by a thread. With low product prices, historically large price differentials and recent increases in Oklahoma’s gross production tax, their wells are borderline uneconomic. A new tax could end them and cause massive plugging liabilities. With the way the Oklahoma plugging bonds work, when a company files bankruptcy the plugging responsibility falls to OERB and could cost the state millions. Oklahoma could literally see producers walk away from wells, creating serious economic and environmental issues.
It is time to put aside political posturing. Gov. Kevin Stitt and Attorney General Mike Hunter are ready to work with the tribes on finding a solution. Here is hoping that a short-sighted vision of riches gives way to long-term relationship building so we can all enjoy the God-given bounty provided to our great state.
Smith, of Norman, is co-owner of Blue Baron Energy.