OKLAHOMA CITY — A measure desperately sought by the state’s largest oil and gas producers squeaked through the Oklahoma House of Representatives on Wednesday, but only after the vote was held open more than a half-hour while three members were persuaded to switch from “no” to “yes.”
Lobbyists clustered around the vote monitor outside the House chamber, some apparently texting people inside, and let out a cheer when Speaker Pro Tem Harold Wright, R-Weatherford, brought down the gavel on a final count of 51-47 for Senate Bill 867.
Considered one of the weightiest measures on this year’s legislative agenda, SB 867 would provide for the wider use of so-called long laterals in horizontal oil and gas drilling. Experts say the technique allows for more production with fewer wells and at lower cost and will trigger new exploration in the state, primarily in formations northwest of Oklahoma City.
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Debate on the bill lasted more than three hours.
Rep. Weldon Watson, R-Tulsa, said the change would produce $490 million in royalty payments to mineral rights owners, including about $28 million to state entities such as the Commissioners of the Land Office.
A fiscal impact statement posted by legislative staff on Wednesday projected another $18.9 million in gross production taxes from new oil and gas development. An earlier analysis listed no fiscal impact.
Opponents of SB 867 said it will allow horizontal drillers to “steal” oil and gas from existing vertical wells. Some Democrats also contended that the bill should not be passed until the gross production tax on new wells is increased from 2 percent to 4 percent or 5 percent.
Watson said operators who believe they have lost production to other wells can already appeal to the Oklahoma Corporation Commission but that few do. He suggested that the lost production might have more to do with the age of the wells than with nearby drilling.
Speaking more bluntly, Rep. Kevin Calvey, R-Oklahoma City, said vertical well operators are not affected by horizontal wells unless they have been benefiting from a “windfall” of oil or gas from lower formations working their way upward.
“That windfall might not be there any longer, but they weren’t entitled to it in the first place,” Calvey said.
Rep. Pat Ownbey, R-Ardmore, said more than 100 wells already have been “lost” to encroaching horizontal wells.
Ownbey acknowledged that the technology is the wave of the future and will spur economic activity but said SB 867 does not provide enough protection for small vertical well operators.
“If we tie a poopy diaper up on a pretty red bow, do you know what you have when you unwrap it?” he asked. “A poopy diaper.”
The vote on the bill quickly reached 48-49, then sat for a while before Rep. Mark Lepak, R-Claremore, changed his vote from red (“no”) to green (“yes”). After another 10 or 15 minutes, Reps. Scooter Park, R-Devol, and Jeff Coody, R-Grandfield, switched simultaneously to give SB 867 the votes it needed. The bill now goes to the governor.
Also Wednesday, the House unanimously passed a measure restoring the “American rule” to state civil law. An earlier bill dealing with civil actions involving child abuse would have changed state law so that anyone bringing a lawsuit and losing would have had to pay the other side’s legal costs. The bill now goes to the Senate.
Also headed to the Senate is HB 2316, which makes it easier for the governor and legislative leaders to replace members of state boards and commissions.
World staff writer Barbara Hoberock contributed to this story.
