Petroleum Association president warns Wyoming lawmakers about oil and gas tax shifts

During a recent meeting of the Wyoming House Revenue Committee, significant discussions centered around the implications of proposed legislation affecting the oil and gas industry, a vital sector for the state's economy. The meeting, held on February 6, 2025, highlighted concerns from industry representatives regarding a bill perceived as detrimental to their operations.

Peter Obermuehlen, president of the Petroleum Association of Wyoming, voiced strong opposition to the current draft of the bill, arguing that it would impose an unfair burden on the oil and gas sector. He emphasized that the legislation, as it stands, would not only shift financial responsibilities onto the industry but also threaten investments that have historically supported job creation and revenue generation for the state. Obermuehlen specifically called for the removal of a contentious section of the bill that would claw back energy matching funds, which are crucial for projects that enhance the state's energy infrastructure.

The discussion underscored the importance of oil and gas revenues, which contribute significantly to Wyoming's general fund through severance taxes, federal royalties, and property taxes. Obermuehlen illustrated the economic impact of these revenues, noting that in one year alone, severance taxes contributed approximately $627 million to the state’s general fund. He urged lawmakers to consider the long-term consequences of the proposed changes, particularly in light of the industry's volatility and its reliance on global market dynamics.

Additionally, Representative Storer raised concerns about the historical volatility of oil and gas revenues compared to more stable sources like property taxes. Obermuehlen acknowledged this volatility, citing past instances where the industry faced severe downturns, such as the complete halt of drilling operations in 2020. He stressed the need for a balanced approach that recognizes the contributions of the oil and gas sector while also addressing the state's fiscal needs.

As the committee continues to deliberate on the bill, the discussions reflect a broader concern about maintaining a sustainable economic environment for Wyoming residents, particularly those whose livelihoods depend on the energy sector. The outcomes of these legislative discussions will be closely watched, as they hold significant implications for the state's economy and the well-being of its communities.