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Debate Stirs Over Oil Bill (Apr 06, 2012)

(Journal Record) - State Representative Fred Jordan says a measure he’s authored is necessary to keep oil companies drilling in Oklahoma. The Journal Record reports House Bill 26-54, which has cleared a Senate committee, would eliminate an oil company’s legal duty to properly pay mineral rights owners.

The bill was written as a response to the court case Hebble v. Shell Western Exploration & Production. That decision awarded millions of dollars to mineral royalty owners who had not been paid properly on oil and gas products from 1973 to 1985.

Jordan says Oklahoma is one of the few states in the nation that imposes a fiduciary duty towards mineral owners, and that the Hebble v. Shell decision takes away an oil company’s right to make business decisions. Fred Morgan, president of the State Chamber of Oklahoma, says the decision led to an increase in lawsuits filed against state energy companies.


However, State Representative Brian Renegar, one of the few that voted against HB 26-54, says he is concerned about the way many wellhead operators treat mineral owners. He says oil and gas companies should be held to a higher standard.

The Coalition Oklahoma Surface and Mineral Owners issued a statement yesterday saying the bill is an overreaction to a lawsuit against a few oil companies that are trying to avoid being brought to justice. Jordan says he and other supporters of the bill are negotiating with royalty owner groups and industry officials to create a bill all sides agree on.

The measure now heads to the Senate floor for further consideration.


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