Oklahoma AG preps legal action on natural gas 'short squeeze' from 2021 winter storm

While Drummond said families and businesses are paying the price in the form of higher utility rates, he said the oil and gas industry and utilities are not to blame.

“But make no mistake: There are indeed guilty parties who are to blame,” Drummond said in a news conference Tuesday.

Several companies reaped billions of dollars at the expense of Oklahoma families and businesses, he said.

“The magnitude of this scheme is staggering and unconscionable,” Drummond said. “The conduct in question is well outside the parameters and boundaries of ordinary capitalism.”

No potential defendants were named, but the complaint will detail what companies and individuals are responsible, Drummond said.

He said it appears that entities such as natural gas marketers were involved in a short squeeze prior to the storm in which the supply was restricted when the demand was the greatest.

“In this case, what it appears as though — as I mentioned a short squeeze — those who supply the gas manipulated the supply to reduce it in anticipation of our greatest need,” Drummond said. “So certainly, natural gas marketers can do it again, and I will sue them.”

Generally, most of the companies that manipulated the marketing price are outside Oklahoma, he said, adding that some are international companies.

Oklahoma Natural Gas issued a statement in response to the news, saying: “It is important to note that utilities such as Oklahoma Natural Gas and others in Oklahoma are not the focus of the potential legal action. We will cooperate with the AG’s office throughout the investigation if requested.

“Oklahoma Natural Gas did everything we could to keep our customers warm and safe during Winter Storm Uri.

“As a reminder, Oklahoma Natural Gas secures the natural gas its customers need and delivers that gas to their homes and businesses. We do not set the price of natural gas nor profit from it.”

Drummond said the state could pursue numerous causes of action in a lawsuit that will be expensive and challenging.

“I believe it is very likely that at this point significant legal action will be necessary to recover billions of dollars for Oklahoma ratepayers,” he said, adding that the legal fees for the company selected will be capped at a reasonable amount.

He said he found no fault with the Oklahoma Corporation Commission, which approved the rate increases.

But “I am profoundly troubled by the pattern of conduct that I have discovered in the course of my review,” Drummond said.

If there is a financial recovery from those responsible, the Legislature should direct the money back to the Corporation Commission to reduce the burden on the ratepayer, Drummond said.

“It will probably be the most significant lawsuit filed by the state of Oklahoma,” he added.

Drummond’s announcement was welcome news for utility customers and AARP members in Oklahoma, said Sean Voskuhl, AARP Oklahoma state director.

“The companies who reaped billions of dollars on the backs on hard-working Oklahomans must be held accountable,” Voskuhl said. “Oklahoma utility customers want action to be taken against the companies who bilked customers out of billions of dollars in a matter of days.”

The new Tulsa World app offers personalized features. Download it today.