LETTER: Are Montana’s Legislators in Bed with Big Oil?

By Beacon Staff

According to Montana’s Board of Oil and Gas we now have over 11,000-plus active oil and gas wells in Montana, which include 750 new wells in the Bakken since 2000. It appears that the saying “If you have it, they will come” rings true with oil and gas. Unfortunately for Montana taxpayers, in 1999 our Republican-dominated Legislature passed an “oil and gas tax holiday” bill signed by Marc Racicot that gave the oil and gas companies up to 18 months of production taxes at less than 1 percent without any consideration for the price of oil and gas. This is a good deal for oil and gas producers since about 60 percent of the total oil production from many wells occurs in the first year.

The oil and gas lobbyists really came through on this one. This is also interesting since previous Montana legislators in the 1980s and 1990s were wise enough to tie any tax breaks to the price of oil and gas. This “oil and gas tax holiday” is not being embraced by our neighbors in Wyoming and North Dakota. Consequently they did not end up losing over $250 million that Montana taxpayers lost to “support” this oil and gas drilling incentive. In the late 1990s, Wyoming studied tax incentives for promoting oil and gas development and determined that lower taxes would unlikely impact exploration and drilling, which proved to be true. As a result Wyoming citizens have benefited tremendously with public programs and new infrastructure. Montanans deserve better. As a Choteau area rancher commented, “the oil and gas companies are not just fracturing the ground, they are fracturing our communities” and state Legislature. It is time to end this tax holiday.

Craig McClure

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