Oklahoma has a long oil and gas history, being the US state where commercial fracking was first undertaken in 1949. But in more recent years, it has gained a reputation for its development of renewables. fDi Markets data indicate Oklahoma ranks second across the US, behind Texas, for foreign direct investment into wind power projects.
Oklahoma’s lieutenant governor Matt Pinnell talks with fDi about how the state has developed its wind sector, the need to diversify energy sources and the potential pitfalls of renewables incentives.
Q: How has Oklahoma been able to attract renewables investment?
A: We get about 40% of our electricity now from renewables. When it comes to Oklahoma, our brand is pretty heavy on the oil and gas side. But we have been pretty aggressive when it comes to wind, solar and hydrogen. We’re pretty proud of the full buffet energy state that we have become.
Our topography on top of the incentives that we can offer is pretty lucrative to companies. We also have workforce training programs inside our vocational training system that these wind companies really like. Our wind incentive that we had in place eight years ago was a little out of whack. The incentive outstripped the return on investment (ROI). We had to adjust that incentive over the last few years. Companies know that the investment they’re gonna make in Oklahoma is stable, because there’s a lot of wind.
Q: How do you balance the development of renewables with your historic fossil fuel industry?
A: Oklahoma can lead the way when it comes to a new energy revolution in this country. Oklahoma has 60 active oil and gas rigs, and that’s the most that we’ve had in many years.
We’re glad that we still have an oil and gas industry that we can rely upon in Oklahoma.
At the same time, we need to be exploring other energy opportunities in the state. It is a balancing act. We haven’t stopped any of the solar, wind or hydrogen conversations.
We have a record amount in gross production tax from the oil and gas industry right now – over $2bn is in our rainy day fund. It’s just made the entire economy stronger and helped us be able to invest in our state agencies.
Q: What’s your impression of the federal support and regulations for oil and gas versus renewables?
A: We’re going to need oil and gas, and a lot of it, for the foreseeable future. We have to find ways that it can coexist with renewables. I am getting concerned at a federal level about incentivising the [renewables] industry, where it outstrips the return on investment (ROI).
We need to be careful at a federal level as to how fast and how much we’re trying to push green energy. Ten to 15 years from now, is this an industry that is having to be propped up almost completely by the federal government? Or is this an industry that is able to stand on its own two feet? That is a big question that I have.
Probably the biggest frustration that we have is about pipelines. Williams Companies is one of the larger companies in Oklahoma and one of the biggest pipeline companies in the country. The Biden administration is really slowing down, or halting further sign offs on pipeline projects. We can drill and find oil and gas reserves around this country, but if we can’t move that product, then that’s problematic.
This interview was edited for brevity and clarity.