Newspaper article THE JOURNAL RECORD

Clinton Plan May Cause Demise of Stripper Wells

Newspaper article THE JOURNAL RECORD

Clinton Plan May Cause Demise of Stripper Wells

Article excerpt

Journal Record Staff Reporter

Oklahoma's oil industry could cease to exist at the producer end of the fuel stream under President Clinton's proposed energy tax, statistics discussed in a state stripper well commission meeting Thursday indicate.

John A. Taylor, chairman of the new Commission on Marginally Producing Oil and Gas Wells, said Oklahoma Geological Survey statistics show 85 percent of oil production in the state is from stripper wells that produce an average two barrels a day.

Stripper wells are a class that produce 10 barrels of oil a day or less; nationally, average stripper well output was 2.2 barrels a day in 1991.

A tax of $3.50 a barrel levied against the netback price paid to producers, which is the consensus evaluation of Clinton's tax plan, would be devastating to Oklahoma, Taylor said. Oil prices have been sluggishly stalled between $18 and $20 a barrel for nearly two years, following the Persian Gulf War.

"Stripper wells would be shut down overnight," if Clinton's tax proposal is enacted, Taylor said.

Dr. Charles Mankin, director of the geological survey, will be preparing a set of facts to illustrate the impact at the request of the stripper well commission. It will be forwarded to congressional committees considering the energy tax, Taylor said.

Previously, the latest figures from the Interstate Oil and Gas Compact Commission, which compiles and produces the National Stripper Well Survey each year, showed that 70 percent of Oklahoma's 1991 oil production came from stripper wells, with an average daily output of 2.8 barrels.

Not since 1988, when stripper well oil production peaked in Oklahoma, has that category of wells accounted for a bigger proportion of statewide oil production.

Stripper well output made up 85 percent in 1988, too, but was 70 percent of total statewide oil production in 1989 through 1991, according to compact commission records. …

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