Commission May Have to Seek Additional General Fund Money / after Seeing 35% Drop in Revenue
Robinson, Robin, THE JOURNAL RECORD
The gross wellhead value of liquid (oil) and natural gas sales during the first six months of 1986 declined by 35 percent, according to analysis performed by the Oklahoma Corporation Commission's statistical department.
The gross wellhead value was $3.04 billion for the first six months of 1986, compared to $4.67 billion for the same six-month period in 1985.
The loss in wellhead value is reflected in the drop in price and the drop in production.
The drop in wellhead value directly affects the gross production tax, petroleum excise tax and conservation funding by the same percent.
The petroleum excise tax had provided 60 to 65 percent of the commission's funding, Townsend said. ""If that revenue stream is down 50 percent, it will have a dramatic impact.''
""It could be felt as early as November or December, if the trend continues, and I don't see anything to stop it from continuing."
The areas that use the gross production tax are the oil and gas conservation division, the office of general counsel, the administration division, the office of administrative proceedings and the data processing division.
The oil and gas conservation division is funded totally from the petroleum excise tax.
The petroleum excise tax is allotted in two categories: the tax from natural gas and the tax from all other fuels. Of the petroleum excise tax from all fuels except for natural gas, 94.5 percent isallotted to the oil conservation fund, which is the account for the oil and gas conservation divison. The remaining 5.5 percent is alotted to the interstate oil compact fund.
The petroleum excise tax from natural gas allots 95.4 percent of its total to the oil conservation fund and the remaining 4.6 percent to the interstate oil compact fund.
Historically, the petroleum excise tax produced more revenue than was needed by the oil and gas division, Townsend said.
""The surplus was substantial in good times,'' he said. …