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Oil, gas rights balanced against local ones in committee debate Tuesday

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A rig drills a well in southeast Oklahoma City in late 2018. Ongoing efforts to develop oil and gas reserves in Oklahoma have moved in recent years into more populated areas, prompting concerns from residents and more restrictive ordinances, rules and regulations for oil and gas operators. [Oklahoman Archives]
A rig drills a well in southeast Oklahoma City in late 2018. Ongoing efforts to develop oil and gas reserves in Oklahoma have moved in recent years into more populated areas, prompting concerns from residents and more restrictive ordinances, rules and regulations for oil and gas operators. [Oklahoman Archives]

A proposed law that could allow mineral rights owners to sue municipalities or other local jurisdictions because of overly restrictive oil and gas laws, rules or regulations survived a committee hearing Tuesday, barely.

House Bill 2150, co-authored by Oklahoma Sen. Mark Allen, R-Spiro, and Rep. John Pfeiffer, R-Orlando, received a due pass recommendation by a 7-to-5 vote by members of the Senate Judiciary Committee, but only after the measure’s enacting clause was removed.

The measure, committee members learned Tuesday, also is being discussed by a working group involving the Oklahoma Independent Petroleum Association-Oklahoma Oil and Gas Association and the Oklahoma Municipal League.

The OIPA-OKOGA supports the bill, while the league supports city officials who are alarmed by its language and seek to prevent its passage.

It wasn’t clear Tuesday whether the Association of County Commissioners of Oklahoma, which represents county commissioners at the Capitol, is involved in the working group.

A lobbyist representing the association didn’t reply Tuesday to an emailed request for comment. But based upon an emailed statement from OIPA-OKOGA’s president, it appears counties are lobbying against it.

“The Oklahoma Municipal League has reached out to us about working with our local community leaders on common-sense solutions to these important issues,” Chad Warmington wrote Tuesday.

He described the discussions as “a welcome change from the hostile approach that county representatives — who continue to misrepresent what is contained in this bill — have taken towards the oil and natural gas industry.”

OIPA-OKOGA, Warmington has said, believes mineral rights owners should be able to seek financial compensation from local governments where over-restrictive rules prevent drilling and production of their reserves.

The bill’s language states an ordinance, rule or regulation could constitute a taking under Article 2 of Oklahoma’s constitution and relevant statutes if it were to substantially impact minerals’ values by interfering with the use of or access to minerals by substantially increasing oil and gas operational costs.

If made law, the language would add to existing statute that already bars municipalities, counties and other local jurisdictions from adopting ordinances, rules or regulations that exceed the Oklahoma Corporation Commission’s authority to regulate the oil and gas industry.

Local officials counterargue state law allows municipalities and other local governmental entities to adopt laws, rules and regulations that protect the health, welfare and safety of their residents.

They add that surface owners in Oklahoma are entitled to as much legal protection as mineral rights owners.

On Tuesday, Allen said the Legislature needs to protect all property owners in Oklahoma, “both mineral and surface owners.”

Committee Chairman Julie Daniels, R-Bartlesville, observed balancing industry and local concerns are a growing, problematic issue that involves both the oil and gas and agriculture industries. Daniels urged committee members to support the bill.

However, two Republicans on the committee, Sen. Lonnie Paxton, R-Tuttle, and Sen. Darcy Jech, R-Kingfisher, joined its three Democrats in voting against the measure.

Paxton said he knows the industry has benefited residents through jobs and royalties, but said he also understands concerns about potential impacts the industry can have on local communities.

“This bill right here may be taking a step too far,” he said.

On Tuesday, Mike Fina, executive director of the Oklahoma Municipal League, said initial discussions within the working group have been productive and that more are planned.

Fina said municipal league members have a better understanding of industry representatives’ concerns about a mosaic patchwork of setback and noise rules they face as they work among various communities.

Industry representatives, meanwhile, are learning from municipal officials about increasing pressures they face from residents who are concerned about what is happening where they live and work.

“One thing that really was eye opening to everyone was that all of us — both city officials and industry representatives — are getting the same calls, and that it makes sense for us to sit down and try to address these issues,” Fina said.

Fina described HB 2150 as addressing an outlying issue among many that have arisen between local communities and the oil and gas industry in recent years.

“We would like to see this bill not make it into law because it is such a liability concern for municipalities,” Fina said.

“But I think if we can address these other issues that are probably more important to the industry, I think we will probably see HB 2150 go away.”

Jack Money

Jack Money has worked for The Oklahoman for more than 20 years. During that time, he has worked for the paper’s city, state, metro and business news desks, including serving for a while as an assistant city editor. Money has won state and regional... Read more ›

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