State Rep. Tom Gann, R-Inola, this week arguing against a bill to provide tax incentives to the electric vehicle manufacturing industry. (Screenshot by Janice Francis-Smith)
OKLAHOMA CITY — Oklahoma will always love its oil and gas industry, state officials say, but they are also working to explore renewable energy sources and other industries to diversify the state’s economy.
Moving away from heavy reliance on oil and gas revenues poses both economic and cultural challenges to state leaders.
“Before we became a state, we were an energy pioneer and we’re so proud of our oil and gas industry,” Gov. Kevin Stitt said at a news conference Monday. “But oil and gas can be very cyclical, and we kind of rode those waves on commodity prices. So we have to diversify. »
An economic impact study presented to the Oklahoma Energy Resources Board in February showed the oil and gas industry was by far Oklahoma’s biggest taxpayer in 2020, despite the pandemic. The industry generated $19 billion in gross domestic product for the state and supported 145,000 jobs.
Yet, a drop in oil and gas prices directly translated into a corresponding drop in collections from the Treasury. For example, June 2020 Gross Production Tax collections were down $72.5 million, or nearly 79%, from June 2019, the previous year, and $18.6 million , or nearly 49%, from the previous month, May 2020. .
On Monday, Stitt asked lawmakers to agree to a multimillion-dollar plan to lure an unnamed manufacturer to the state. The project is considered by many to be a $4 billion Panasonic facility supplying batteries to electric vehicle maker Tesla.
Tony Aquila, chief executive of electric vehicle manufacturing company Canoo, was also present at Monday’s press conference. Last year, Stitt raised about $300 million in incentives to lure Canoo to Oklahoma, which included both money from the governor’s fast-action closure fund and the pledge of the ‘State to purchase a number of vehicles.
Stitt gave special recognition to Aquila during the governor’s state of the state address in February, highlighting the deal with Canoo as one that will push Oklahoma’s economy into the future and provide about 2,000 jobs.
Canoo is believed to be the second party mentioned in the legislation designed to create incentives that would attract Panasonic.
“We also targeted through Commerce electric vehicle manufacturing, automotive manufacturing,” Stitt said Monday. “We knew automotive manufacturing was starting to move south and we started to focus on the automotive industry supply chain.
“As I have met with other automakers across the country, it is clear that we are entering an era where all resources and new research and development are shifting towards electric vehicles,” Stitt said. “All the major OEMs (original equipment manufacturers) are focused on this, all the new startups.”
Stitt also pointed to Oklahoma’s “comprehensive approach” to power generation. The oil and gas industry has a “very bright future,” Stitt said, but 40 percent of the state’s energy comes from renewable sources.
“Only four states can say that,” Stitt said, adding that Oklahoma is the second-largest in the nation for wind power and “leans heavily into hydrogen.”
In March, Tulsa-based utility PSO opened the largest wind farm ever built in North America, the 356-turbine Traverse Wind Farm in Blaine and Custer County. PSO representatives were also present at Monday’s press conference, as Stitt requested funding for a facility that would be located in the Tulsa metro area.
“We have more electric vehicle charging stations per capita than any other state, and we invested in that a long time ago,” Stitt said. “We know that’s where the industry as a whole is moving.”
This transition does not sit well with everyone on Capitol Hill and their constituents. During debate on the bill to provide incentives for electric vehicles, State Rep. Tom Gann, R-Inola, noted that just days ago lawmakers voted to approve a bill titled the Energy Discrimination Elimination Act of 2023. House Bill 2034 would discourage the state from entering into contracts with financial companies that “boycott energy companies”.
State Sen. Mark Allen, R-Spiro, told fellow lawmakers on the committee last week that some financial companies have refused to “lend money to fossil fuel companies just because they won’t push the ‘green energy,’ Allen said. “Oil and gas is our main source of income here in the state of Oklahoma.”
In arguing against the bill to attract electric vehicle manufacturing to the state, Gann claimed the companies subscribed to an ESG, or environmental, social and governance philosophy, which Gann described as the “CRT (Critical Race Theory) of companies”.
“They are hostile to the oil and gas industry,” Gann said. “This is Biden’s green agenda being implemented right before your eyes.”
State Rep. Kyle Hilbert, R-Bristow, noted that during the Super Bowl broadcast this year, “every other commercial was for electric vehicles.”
“Whether you support EVs, whether you oppose EVs, whatever your position on this, it doesn’t matter – that’s where the industry is going,” Hilbert said.