{"id":26282,"date":"2016-03-17T10:53:14","date_gmt":"2016-03-17T15:53:14","guid":{"rendered":"http:\/\/stateimpact.npr.org\/oklahoma\/?p=26282"},"modified":"2016-03-17T11:09:09","modified_gmt":"2016-03-17T16:09:09","slug":"as-state-finances-stumble-oil-and-gas-leaders-rally-to-end-tax-credits-for-wind","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/oklahoma\/2016\/03\/17\/as-state-finances-stumble-oil-and-gas-leaders-rally-to-end-tax-credits-for-wind\/","title":{"rendered":"As State Finances Stumble, Oil and Gas Leaders Rally to End Tax Credits For Wind"},"content":{"rendered":"<div id=\"attachment_26283\"  class=\"wp-caption module image right\" style=\"max-width: 620px;\"><img decoding=\"async\" loading=\"lazy\" class=\"size-full wp-image-26283\" alt=\"Continental Resources founder and CEO Harold Hamm, second to the left, at the Oklahoma Independent Petroleum Association office in Oklahoma City.\" src=\"https:\/\/stateimpact.npr.org\/oklahoma\/files\/2016\/03\/20150902-rubio-oipa-pics006_WEB.jpg\" width=\"620\" height=\"413\" srcset=\"https:\/\/stateimpact.npr.org\/oklahoma\/files\/2016\/03\/20150902-rubio-oipa-pics006_WEB.jpg 620w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2016\/03\/20150902-rubio-oipa-pics006_WEB-500x333.jpg 500w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2016\/03\/20150902-rubio-oipa-pics006_WEB-150x100.jpg 150w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2016\/03\/20150902-rubio-oipa-pics006_WEB-300x200.jpg 300w\" sizes=\"(max-width: 620px) 100vw, 620px\" \/><\/p>\n<p class=\"wp-media-credit\">\n<p class=\"wp-caption-text\">Continental Resources founder and CEO Harold Hamm, second to the left, at the Oklahoma Independent Petroleum Association&#39;s office in Oklahoma City.<\/p>\n<\/div><p>Oklahoma legislators are considering eliminating some tax credits and incentives for businesses to help plug a $1.3 billion budget gap. The state\u2019s fiscal crisis has led some oil and gas leaders to push lawmakers to end incentives for the wind industry.<\/p><p><iframe loading=\"lazy\" src=\"https:\/\/w.soundcloud.com\/player\/?url=https%3A\/\/api.soundcloud.com\/tracks\/252362694&auto_play=false&hide_related=false&show_comments=true&show_user=true&show_reposts=false&visual=false\" height=\"150\" width=\"100%\" frameborder=\"no\" scrolling=\"no\"><\/iframe><\/p><p><em id=\"__mceDel\"><!--more--><\/em><\/p>\n<h3>Incentive agreement<\/h3><p>The wind industry had a busy year at the state capitol in 2015. Governor Mary Fallin <a href=\"https:\/\/www.google.com\/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwjm-4-S_cfLAhUKy2MKHTO4BooQFggdMAA&url=http%3A%2F%2Fnewsok.com%2Farticle%2F5420996&usg=AFQjCNFpEBfhyj22og4qNeEth7SPFx9TRA&sig2=Tf4j8d9GQikJowB3R85JdA\">signed legislation<\/a> paving the way for stricter turbine siting rules. Fallin also signed legislation to sunset by the end of 2016 a pair of tax incentives available to the wind industry.<\/p><p>One incentive, the Investment\/New Jobs tax credit, was rarely used by wind developers. The other was a five-year exemption on local property taxes that was very popular. Eliminating the ad-valorem exemption was\u00a0 estimated to save taxpayers $45 million to $50 million a year \u2014 and as much as $77 million annually by 2018.<\/p><p>Speaking on the floor in May 2015 during a final vote in the House on Senate Bill 498, the measure eliminating the property tax exemption, Republican Rep. Earl Sears of Bartlesville said all sides came together to cut a deal.<\/p><p>&#8220;After months, and I literally mean months, of negotiations, we have come to an agreement,\u201d he said. &#8220;As far as the House is concerned, this is a well-negotiated, visited, thought-through, talked about, developed and what you have before you, if we pass it, we&#8217;ll be out of the ad-valorem reimbursement business in the wind power industry.\u201d<\/p>\n<h3>Zero sum game<\/h3><p>The wind industry says last year\u2019s negotiation to phase out the two incentives hinged on a promise from lawmakers to keep in place a third <a href=\"http:\/\/okcommerce.gov\/state-energy-office\/tax-credits\/\">tax incentive<\/a> \u2014 called the Zero Emissions Facility Tax Credit \u2014 which is available to the renewable energy sector.<\/p><p>A lot has changed in a year. Oil prices tanked. Natural gas prices <a href=\"https:\/\/www.eia.gov\/dnav\/ng\/hist\/rngwhhdm.htm\">slid.<\/a> The state budget gap has more than doubled. And now, some heavyweights in Oklahoma\u2019s oil and gas industry have organized a campaign that\u2019s taking aim at the state\u2019s financial support of the wind industry.<\/p><p>\u201cFrom an energy policy standpoint, I think we have achieved our goals and we should not be incentivising wind development to the extent we are today,\u201d says Pete Delaney, who sits on the board of directors of Enable Midstream, a company that collects, transports and stores natural gas and oil. He\u2019s also the former Chairman and CEO of Oklahoma Gas and Electric, the state\u2019s largest electricity utility.<\/p><p>\u201cThe fiscal situation is worse, the amount of tax benefits going to the wind industry is growing every year,\u201d Delaney says.<\/p><p>Oklahoma is currently fourth in the nation for wind capacity, according to <a href=\"http:\/\/www.awea.org\/resources\/statefactsheets.aspx?itemnumber=890\">a state-by-state analysis<\/a> by the American Wind Energy Association. Delaney says that means wind energy is established and commercially viable, and doesn\u2019t need taxpayer support. He also says ending the wind incentives and taxing wind production would encourage utilities to use more natural gas, which has a bigger economic effect in Oklahoma.<\/p><p>Delaney is part of the so-called Windfall Coalition spearheaded by billionaire oilman Harold Hamm, the founder and CEO of Continental Resources. Hamm did not grant StateImpact\u2019s request for an interview.<\/p>\n<div id=\"attachment_26284\"  class=\"wp-caption module image right\" style=\"max-width: 620px;\"><img decoding=\"async\" loading=\"lazy\" class=\"size-full wp-image-26284\" alt=\"A anti-wind incentive billboard along Interstate 235 in Oklahoma City.\" src=\"https:\/\/stateimpact.npr.org\/oklahoma\/files\/2016\/03\/20160316-wind-bilboards001_WEB.jpg\" width=\"620\" height=\"413\" srcset=\"https:\/\/stateimpact.npr.org\/oklahoma\/files\/2016\/03\/20160316-wind-bilboards001_WEB.jpg 620w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2016\/03\/20160316-wind-bilboards001_WEB-500x333.jpg 500w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2016\/03\/20160316-wind-bilboards001_WEB-150x100.jpg 150w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2016\/03\/20160316-wind-bilboards001_WEB-300x200.jpg 300w\" sizes=\"(max-width: 620px) 100vw, 620px\" \/><\/p>\n<p class=\"wp-media-credit\">Joe Wertz \/ StateImpact Oklahoma<\/p>\n<p class=\"wp-caption-text\">A anti-wind incentive billboard along Interstate 235 in Oklahoma City.<\/p>\n<\/div><p>Anti-wind incentive billboards have popped up around Oklahoma City. Some include foreign flags to remind motorists that taxpayer dollars are going to wind companies in other countries. The signs also suggest state government funding that could go to schools are instead directed to wind companies.<\/p><p>The campaign has found support with other oil and gas executives and the Oklahoma Independent Petroleum Association, a pro-industry group. Together, they\u2019re calling for an end to all state wind energy incentives. They also want even tougher siting rules and a new state tax on wind production.<\/p><p>\u201cWe&#8217;re proposing that wind be taxed at 2 percent for the first three years and then 7 percent just like oil and gas,\u201d Hamm <a href=\"http:\/\/newsok.com\/some-oklahoma-oil-gas-execs-want-to-end-wind-tax-credits\/article\/5484224\">told<\/a> <i>The Oklahoman<\/i>\u2019s Paul Monies. \u201cFull parity.\u201d<\/p><p>Jeff Clark with the Wind Coalition says oil and gas executives are not interested in a level playing field.<\/p><p>\u201cThey\u2019d like to eliminate any incentives available. Only for my industry, not for their own,\u201d he says.<\/p>\n<div class=\"related-content alignright\">\n<h4 class=\"related-header\">Related<\/h4>\n<div class=\"links\">\n<h5>Posts<\/h5>\n<ul>\n<li class=\"link\"><a href=\"http:\/\/stateimpact.npr.org\/oklahoma\/2016\/02\/25\/another-oklahoma-state-park-cast-off-as-department-of-tourism-takes-more-cuts\/\">Another Oklahoma State Park Cast Off As Department Of Tourism Takes More Cuts<\/a><\/li>\n<li class=\"link\"><a href=\"http:\/\/stateimpact.npr.org\/oklahoma\/2015\/10\/07\/u-s-sen-lankford-moves-to-permanently-sunset-federal-wind-incentive\/\">U.S. Sen. Lankford Moves to Permanently &#8216;Sunset&#8217; Federal Wind Incentive<\/a><\/li>\n<\/ul>\n<\/div>\n<div class=\"topics\">\n<h5>Topics<\/h5>\n<p class=\"topic\"><img class=\"alignleft\" src=\"https:\/\/stateimpact.npr.org\/oklahoma\/files\/2011\/10\/windTN.jpeg\" height=\"60\" width=\"60\" \/><a href=\"http:\/\/stateimpact.npr.org\/oklahoma\/topic\/wind-energy\/\">Wind Energy: Electricity and Economic Potential in Oklahoma<\/a><\/p>\n<\/div>\n<\/div><p>The fossil fuel industry should encourage wind energy development, Clark says, because they\u2019re \u201ccomplementary\u201d sources of electricity. \u201cThey\u2019re symbiotic, they grow together,\u201d he says, pointing to <a href=\"https:\/\/www.eia.gov\/todayinenergy\/detail.cfm?id=21072\">data<\/a> from the U.S. Energy Information Administration. \u201cTogether we\u2019re making Oklahoma more dependent on natural gas and renewables, which is good for everybody.<\/p><p>Delaney, the former electricity utility boss, says a diverse mix of fuel sources is needed to provide reliable electricity to customers, but he says the intermittent nature of wind power means extra costs for utilities who have to keep natural gas or coal-fired plants at the ready to fill in the generation gaps.<\/p><p>\u201cThe amount of wind that\u2019s getting on the system is quite substantial, particularly during periods that we\u2019re not under peak load conditions, like fall and spring,\u201d he says.<\/p>\n<h3>Power politics<\/h3><p>Clark says adding more siting rules and taxing wind production would make Oklahoma less attractive for wind developers. New turbine projects might go to Kansas or Texas, he says. Clark is urging the Legislature to honor last year\u2019s deal and keep the remaining Zero Emissions Facility Tax Credit, which expires at the end of 2020.<\/p><p>\u201cNow, unfortunately, is the time when Oklahoma has to choose,\u201d Clark says. \u201cIs this going to be a state that has an all-of-the-above energy strategy? Or are we going to pit energy industries against one another in an attempt to drive one industry out of the state?\u201d<\/p><p>Opponents say Oklahoma\u2019s fiscal crisis is reason to pull back support of the wind industry. Clark says the state\u2019s economic problems mean it\u2019s a terrible time to end the industry\u2019s one remaining incentive and create a new tax on wind production. Both sides say all options are on the table as lawmakers scramble to plug its budget hole.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Oklahoma legislators are considering eliminating some tax credits and incentives for businesses to help plug a $1.3 billion budget gap. The state\u2019s fiscal crisis has led some oil and gas leaders to push lawmakers to end incentives for the wind industry.<\/p>\n","protected":false},"author":36,"featured_media":26284,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[490],"tags":[155,238,324,144,145],"acf":[],"_links":{"self":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts\/26282"}],"collection":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/comments?post=26282"}],"version-history":[{"count":9,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts\/26282\/revisions"}],"predecessor-version":[{"id":26290,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts\/26282\/revisions\/26290"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/media\/26284"}],"wp:attachment":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/media?parent=26282"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/categories?post=26282"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/tags?post=26282"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}