A bill looking to cut future severance taxes for oil and gas companies was approved by the Senate Minerals Committee. Senate File 98 would cut severance taxes in half during the third year of production until the end of its fourth year.
Cody Senator Hank Coe said the goal is to attract new energy operations to Wyoming over another mineral producing state. Coe said that it's worked before.
"We did it with stripper wells back in the '90s, which were 10 barrels or less, and it definitely stimulated production with stripper wells,” he said. “It makes sense to stimulate the industry by lowering the severance tax."
Coe adds Wyoming is in competition with Colorado which has become increasingly competitive in oil and gas development.
But several critics spoke out against the bill. That includes Phoebe Stoner, the executive director of the Equality State Policy Center. Legislation similar to this has come up several times before, including in the early 2000s. Stoner said the Wyoming Legislature commissioned a University of Wyoming study back then showing SF98 won’t cause the desired effect.
“Study after study after study, including a study done by this legislature, has shown that severance tax breaks and rates do not stimulate industry,” she said.
Stoner also added reducing revenue at a time of budget-cutting sends a bad message. The bill passed 3-2.