Commercial lease covers it all – right?

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on April 20, 2017.


Jennifer Ivester Berry is a member of the firm’s Transactional Practice Group as an Of Counsel attorney. Jennifer represents individuals, privately-held and public companies in connection with a wide range of commercial real property matters.

By Phillips Murrah Of Counsel Attorney Jennifer Ivester Berry

For those involved in leasing commercial real estate – whether new to leasing or a seasoned industry pro – signing a lease can be a daunting endeavor.

The devil is in the details, and, more often than not, many standard forms omit critical considerations. Accordingly, a close examination of the terms is essential for a quality commercial lease.

Below are five important points to consider when leasing commercial property. These items are not intended to be exhaustive, but rather a starting point for the purposes of evaluation.

• Experience – Knowing the background and temperament of the other party is important. Is leasing commercial property the landlord’s primary business? Will a management company operate the property? Is the tenant established or just starting out? A knowledgeable, cooperative working relationship is imperative for a successful commercial lease.

• Type of lease – Details of what costs are covered and how they are apportioned should be carefully reviewed. For example, leases often described as triple net, meaning that the tenant is responsible for all costs associated with the leased premises other than structural repairs, can actually be a blend of two types of leases, triple net and gross. A gross lease splits the structural repairs and operation expenses between the landlord and tenant.

• Identification of leased premises – Often the outline of the space and delineation of its parameters is an attachment that does not make it into the lease until the end of the negotiations. It is important to verify up front that what is provided meets both parties’ expectations.

• Costs – Payments under a commercial lease can be categorized in several different ways, including rent, common area maintenance, assessments and dues. Awareness that a lower rental rate might be counterbalanced by a monthly fee for maintenance of the property, which is set to automatically increase each year, is essential. The ultimate focus should be on the full monthly cost, regardless of what it is called under the lease.

• Insurance – Insurance coverage requirements will vary based on lease type. It is important to identify two things: what the lease requires and whether such coverage is available, and whether the cost associated therewith is factored into the overall lease costs.

Jennifer Ivester Berry is an attorney at Phillips Murrah who specializes in commercial real estate property and energy-related matters.

Director Jim Roth sourced in article on Oklahoma’s solar energy potential

Jim A. Roth, Phillips Murrah

Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Jim Roth, Phillips Murrah Director and Chair of the Firm’s Clean Energy Practice, was quoted in an Oklahoma Gazette article by Laura Eastes regarding solar energy technology and Oklahoma’s potential as a leader in the solar industry.

Read Roth’s comments from the article below:

Row after row of solar panels, which rest perfectly aligned and angled to the west, fill an open field along NW 10th Street in western Oklahoma City. When OG&E’s 2.5-megawatt solar farm began harvesting energy from the sun less than two years ago, the company hawked the farm’s ability to power a one-stop-sign town.

As the sleek metal of the solar panels glistens in the blazing sun, the electric utility company’s aging natural gas plant stands in the background. When it comes to power stations, natural gas is king in Oklahoma, but indicators show solar has a bright and rising future.

“There is a tremendous amount of energy hitting the surface every day and we haven’t yet developed measures to capture it,” said Jim Roth, a director and chairman of Phillips Murrah law firm’s Clean Energy Practice Group and a former Oklahoma Corporation Commissioner. Roth represents solar and wind energy developers for the Oklahoma City business law firm.

“The technology is catching up,” he said. “Oklahoma is uniquely situated in that the best sun penetration happens at the time of day which is the most expensive time in the market. We not only have a lot of opportunity for local use, but we also have the ability to export at the height of the market each day.”

Across Oklahoma’s western border and into the Texas Panhandle are hints of a solar boom. Roth said the major Texas projects foreshadow Oklahoma’s future.

Within Oklahoma, solar energy has caught the attention of utility companies. It’s not limited to the OG&E solar farm in OKC. Public Services Company of Oklahoma’s (PSO), which services areas around Tulsa, McAlester and Lawton, recent long-term plan calls for the addition of solar resources. Additionally, rural electric cooperatives are diving into small-scale solar farms.

“The reality is the technology is there and solar is being implemented all around the country,” Roth said. “I really believe this is our greatest potential — we have such blessings with clean natural gas underground, such blessings with world-class wind and with solar opportunity. Few states, if any, have the trifecta. … Oklahoma is actually perfectly situated for the future which is unfolding.

Read the full article from the Oklahoma Gazette.

NewsOK Q&A: Laws allow for various contingencies in dealing with bankrupt companies

From NewsOK / by Paula Burkes
Published: April 18, 2017
Click to see full story – Laws allow for various contingencies in dealing with bankrupt companies

Click to see Gretchen Latham’s attorney profile

Gretchen M. Latham’s practice focuses on representing creditors in foreclosure, bankruptcy, collection and replevin cases. She offers these services to her clients on a statewide basis as well as in all three Bankruptcy and Federal Court Districts in Oklahoma.

Q: Can a lender still do business with a bankrupt company?

A: Most generally, yes. When a business files for bankruptcy, the type of case is most commonly a Chapter 11 case. In a Chapter 11, it’s possible for the company to remain in possession of its assets, including equipment and inventory, and continue to do business. This includes interacting with vendors and lenders on a regular basis. As a creditor, the safeguard in place for repayment of any loan made to a company operating under a Chapter 11 is that post-petition debts are given priority as an administrative claim. This helps to eliminate some of the risk, and provide assurances of repayment. However, if the type of case filed is a Chapter 7, the company will no longer be operating its business and all of its assets are scheduled for liquidation.

Q: Can goods that are shipped to a Chapter 11 debtor be recovered?

A: The Bankruptcy Code does allow for reclamation of recently shipped goods, pursuant to 11 U.S.C. Section 546. There’s a somewhat tight timeline for exercising the right of reclamation, which must be precipitated by making demand.

Q: How can I get paid by a Chapter 11 debtor?

A: An option for making a payment claim, which is not unique to a Chapter 11 case, is for a creditor to file a proof of claim. The proof of claim will set forth the balance due and payment terms. The deadline to get a claim on file will vary from court to court, and the required form is typically provided with notice of the filing. Payment on a proof of claim can take a while, so be prepared to wait for the case to come to completion.

 

Roth: Earth Day in action

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on April 17, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Earth Day in action

April is a busy time with significant holidays like Passover and Easter.

It’s also a time to celebrate the reawakening of the natural world around us as the spring equinox springs fauna and flora to life around us. And with Earth Day, April 22, approaching, it’s a great time to jump up, get out and put our lives in action for the world around us.

The first Earth Day on April 22, 1970, activated 20 million Americans from all walks of life and is widely credited with launching the modern environmental movement, although a growing consciousness had been building in America for decades. Soon the passage of landmark acts, such as the Clean Air Act, the Endangered Species Act and the Clean Water Act brought national prominence to these efforts. By the 1990s, Earth Day had spread across the Earth, activating more than 200 million people in over 140 countries and creating a true global awareness of the world we share in common.

So as we approach the 47th birthday of Earth Day in America, we can take great comfort in the tremendous progress that has actually been achieved here and abroad over these years and yet we have serious concerns that continue to mount and are causing grave, yes, grave consequences.

• Forests: Our planet is currently losing 56 acres of forests every minute, amounting to over 15 billion trees every year. These fading forests are necessary to combat climate change, de-carbonize our atmosphere, sustain important species and provide shelter and security to people across the globe. Former forested areas are now prone to massive erosion and displacement of cultures and animals worldwide.

• Species: Earth’s species are now going extinct faster than ever before and we have entered what credentialed scientists have described as a “sixth mass extinction brought on by global human activity.”

Whether you are motivated by faith, as many faithful people believe we have a calling to honor the world provided by the Creator, or whether you are motivated by a humanistic call to save lives from climate harm and disease brought on my droughts and famine, there are a few easy and obvious actions steps you can take to make a difference:

• Plant a tree or donate to plant a tree.

There are a number of national and world charities that do great work to reforest our planet and your modest donation can go a long way. Likewise, visit a local nursery and plant a new tree in your own yard, with your family’s help, and create a daily reminder of the tree of life out your own front door.

• Reduce your footprint.

There are many online tools to measure your ecological footprint to learn how to reduce your footprint on the planet. Here is a great link to get started: www.earthday.org/reduce-footprint-take-ecological-footprint-quiz.

• Stop using disposable plastic.

Make the decision today and simply stop. Carry your own bag into stores, insist on recycled paper bags or simply carry items in your arms the old-fashioned way, but however you stop using plastic, just stop. They are filling up landfills, polluting oceans and entangling and killing animals everywhere.

• Believe in science and let your voice be known.

There are activities all around this country, including a March for Science on the National Mall on Earth Day to fight efforts to silence science and instead create community engagements and knowledge sharing. As my partner likes to say: “science doesn’t care if you believe it or not, it just is science.”

This Earth Day is a great time to engage with yourself, your children, your family, your church, community and neighbors to do deliberate acts of good to help save Mother Earth. She really needs our help.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

NewsOK Q&A: FBI warns against doctors, dentists using ‘anonymous mode’ computer servers

From NewsOK / by Paula Burkes
Published: April 12, 2017
Click to see full story – FBI warns against doctors, dentists using ‘anonymous mode’ computer servers

Click to see Mary Holloway Richard’s attorney profile

Mary Richard is recognized as one of pioneers in health care law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families.

Q: What attention has the FBI recently given to protect Protected Health Information (“PHI”) from cyber criminals?

A: Under a “Private Industry Notification” dated March 22, the FBI’s Cyber Division has provided guidance that’s applicable specifically to medical and dental providers and focuses on protection of sensitive, identifiable health information.

Q: What does the notice specifically recommend?

A: The notification recommends these health care providers request that their IT services personnel take steps to further secure the information from cyber threats by checking networks for File Transfer Protocol (“FTP”) servers running in anonymous mode. FTPs routinely are used to transport information between network hosts. This is the case, for example, when a covered entity such as a hospital or group practice transfers information to a business associate, such as a billing company or a third-party payer, for the purpose of submitting claims for services provided.

Q: What does “anonymous mode” mean and what threat does it represent?

A: “Anonymous mode” refers to the situation where an FTP server can be structured to permit users who are anonymous, doesn’t require a password to enter, and accepts common user names such as “anonymous” or “FTP.” The danger is that, in such circumstances, sensitive patient information stored on a server could be accessed with little or no security.

Q: Why does the FBI guidance focus specifically on health care?

A: Research conducted at the University of Michigan in 2015 resulted in a finding that more than one million FTP servers would allow such access. According to the FBI, some computer security researchers seek servers in anonymous mode as part of legitimate research, but others make such connections to facilitate nefarious activities such as launching cyber attacks, hacking, blackmailing, harassing and intimidating business owners. It’s the FBI’s purpose issuing this new guidance to both make health care business aware of the risks represented in their IT systems and to shore up weaknesses that pose cyber security risks. In addition to the precautions urged in the notice, the FBI has previously urged companies to buy and implement ransomware defense software.

Q: Should additional actions be taken by medical and dental health care entities to provide additional protections against cyber crime?

A: The FBI encourages medical and dental health care entities to report suspicious or criminal activity to the local FBI field office (locate via www.fbi.gov/contact-us/field) or the FBI’s 24/7 Cyber Watch, CyWatch 855-292-3937 or CyWatch@ic.fbi.gov. Submitted reports must include available information regarding the date, time, location, type of activity, number of people and type of equipment used for the activity, the name and contact person for the entity submitting the report. Victim complaints can be filed with the internet Crime Complaint Center at www.ic3.gov.

 

Roth: Leading or following China on climate?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on April 10, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Leading or following China on climate?

Over the years, much has been made in American politics about whether America should do more to lead the world on solutions for combating climate change.

Now I am not talking about the “climate deniers” who are against the enormous consensus of actual scientists; those political scientists who try to score political points alleging there isn’t consensus. I am talking about that second group of politicians and prognosticators who say: “Why should we do something when China isn’t?”

But first, more about those actual scientists. According to NASA, yes that NASA, and its Global Climate Change website, climate.nasa.gov/scientific-consensus, “Multiple studies published in peer-reviewed scientific journals show that 97 percent or more of actively publishing climate scientists agree: Climate-warming trends over the past century are extremely likely due to human activities. In addition, most of the leading scientific organizations worldwide have issued public statements endorsing this position.”

The following is a partial list of these organizations:

• American Scientific Associations including American Association for the Advancement of Science, American Chemical Society; American Meteorological Society and the Geological Society of America.

• The United States National Academy of Sciences.

• The Intergovernmental Panel on Climate Change.

• 200+ worldwide scientific organizations that hold the position that climate change has been caused by human action.

So, once you accept that scientific evidence is or may be believable, you get to the “Why should we” crowd. It is this crowd I was wondering about as America’s president met with China’s president in Florida. That is a clear departure from past administrations pushing on China, and their enormous emerging economy, to move in a more committed path towards limiting human effects on climate and global warming.

Have we agreed to follow? Is it possible that America’s new directions on energy, coal, pollution and climate change will be eclipsed by a China that is actually doing more on climate action? Let us take a look.

At the end of 2016, China released its 13th Five Year Plan for Economic and Social Development, a guidebook that has become how the Communist Party maps out China’s direction. The plan has three sub-plans focused on controlling greenhouse gas emissions, environmental protection and development of the power sector.

Taken together, these renewed pathways build upon the previous steps and measures underway that have actually reduced their coal consumption three years in a row, helping reduce China’s carbon dioxide emissions by about 0.7 percent last year.

What’s more, the three sub-plans lay out a comprehensive set of policies to benchmark China’s goals for 2020, which will allow them to actually exceed their 2030 goals in the Paris Agreement. They have capped coal usage, they have pushed even tougher caps in areas of poorer air quality and they have redoubled efforts to develop low-carbon technologies and policies.

America seems to be moving in the opposite direction, when we could and should in fact lead the charge to solve one of the greatest, if not the greatest challenge we face in our lifetimes. Our country’s outstanding DNA and drive has made us a leader in innovation, economy and moral fortitude to move others to solve global challenges. We should not reverse course now and lose the chance to lead this enormous opportunity for our lives and our economy.

What’s more, for those who feel we should not lead because others may not follow, I would ask: When does America ask for a show of hands to determine if it does the right thing? We should continue to lead and we should realize other excuses may be vanishing as other countries do more. China included.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Oklahoma, Caveat Emptor?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on April 3, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Oklahoma, Caveat Emptor?

As travelers enter into Oklahoma on one of 11 major highways from other states, they are greeted by a beautiful red granite monument featuring the Oklahoma state seal and the word Oklahoma.

However, to be fair, and based upon recurring actions from our state leaders, truth in advertising may require we amend the signs to read “Oklahoma, Caveat Emptor.”

“Caveat emptor” is a Latin phrase meaning “let the buyer beware.” Similar to the phrase “sold as is,” this phrase suggests that the buyer assumes the risk that a product may fail to meet expectations or be defective. The phrase is actually shortened from a longer legal concept, which is: Caveat emptor, quia ignorare non debuit quod jus alienum emit, meaning “Let the purchaser beware, for he out not be ignorant of the nature of the property which he is buying from another party.”

Now we Oklahomans surely pride ourselves on being good people who will look you in the eye and bind ourselves through our word and a handshake. Moreover, we should not need Latin phrases to prove our trustworthiness, or more accurately excuse our lack thereof. But times they are changing if the actions around our floundering state budget continue to erode the confidence of our own citizens and those precious investment dollars we invite in to help grow our state. Simply put, our erratic debtor’s behavior is making us a risky place to do business, and whether our welcome signs declare it or not, our legislative actions are spreading the word beyond our borders.

Last year, numerous bills were introduced targeting existing tax credits and other incentives, causing investors and companies in energy and aerospace to purportedly remove Oklahoma as a place to grow, expand or invest. Then near the end of the session, and without much warning, quick action immediately eliminated a tax subsidy for oil and gas wells that had become unprofitable due to the massive and sudden downturn in energy prices. Yes, an argument can be made that the budget hole necessitated drastic action, but to that operator that kept employing Oklahomans it probably felt like being kicked while you were already down.

Now this year, similar sudden action has been taken by both the House and the Senate to rip an existing tax incentive away from projects that are actually under construction in Oklahoma with the wind energy industry. Oklahoma invited billions of dollars in and now claims we cannot keep our word even though changing our word has zero effect on this coming year’s budget.

Standard & Poor’s global ratings announced in March it has lowered our bond rating a notch stating: “The downgrade reflects our view that persistently weak revenue collections – leading to a declared revenues failure for the remainder of the fiscal year (2017) – have further compounded the state’s challenge to achieve structural balance in fiscal 2018.”

These are desperate times and as is said, desperate times call for desperate measures. Our failed funding of public education is a crisis, which reverberates through our lives and economy in multiple ways beyond dropout rates and low test scores. It means higher incarceration rates and socialized expenses. It means greater poverty rates, hunger and divorce. It is a crisis and must be solved. We need steady, structural change to create revenue for our state’s needs.

However, to be erratic toward investment dollars, which we desperately need to grow our state towards more stable times, is a risk that can forever impair our state’s fullest potential. If we have become a credit risk, lenders will deploy their capital in more reliable states and the downward spiral continues here through less financing, fewer company expansions, and higher costs of debt, fewer energy projects and fewer jobs.

While desperate times may in fact exist, we Oklahomans should not ever trade in our good name. Not for an annual budget hole, not for political pressure, not for anything.

Others are watching our words and actions and they may rewrite our welcome sign for us.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

SCOTUS overturns structured bankruptcy dismissal in favor of payment priority rules

“Chapter 11 permits some flexibility, but a court still cannot confirm a plan that contains priority-violating distributions over the objection of an impaired creditor class.” – U.S. Supreme Court Ruling in Czyzewski v. Jevic Holding Corp.

A landmark decision handed down last Wednesday from the U.S. Supreme Court reversed a bankruptcy court ruling that approved a “structured” Chapter 11 bankruptcy dismissal settlement for a collapsed trucking company. WSJ reported that, in the highly anticipated ruling, SCOTUS overturned a controversial payout plan that disregarded important bankruptcy rules.

In Czyzewski v. Jevic Holding Corp., the High Court ruled that the dismissal violates payment priority rules of the Bankruptcy Code as set out by Congress, which gives a special priority creditor status to employees who are owed unpaid wages. In the decision, SCOTUS sent the case back to bankruptcy court so that it may be properly adjudicated.

The Backstory

In 2006, private-equity firm Sun Capital Partners’ acquired Jevic Transportation, Inc. in a leveraged buyout, according to the Wall Street Journal. By the following year, the company had started experiencing financial difficulty. In 2008, Jevic Transportation filed its Chapter 11 petition.

A day prior to the bankruptcy filing, Jevic ceased operations and about 90 percent of its employees were abruptly terminated. A group of the company’s truck-driver force filed a multi-million dollar class-action lawsuit claiming that the layoffs violated the Worker Adjustment and Retraining Notification (WARN) Acts. According to Federal Regulation Title 20, Section 639.1(a), employers are required to give a 60-day notice of plant closings and mass layoffs.

The suit included over $8 million in employee priority wage claims under Section 507(a)(4) of the Bankruptcy Code. Jevic truck drivers were awarded a judgment against Jevic, entitling the workers to payment ahead of general unsecured claims against the Jevic estate.

Another lawsuit was brought by the official committee of Jevic’s unsecured creditors claiming fraudulent conveyance and equitable subordination against secured creditors, Sun Capital and CIT Group, which funded the LBO. During the course of Chapter 11 proceedings, Jevic stated that it had run out of money to fight the claims, which set into motion a settlement with the unsecured creditors’ committee representing Jevic’s unsecured creditors in the form of a structured dismissal. A Delaware bankruptcy judge approved a payout plan and dismissed the case.

The Controversy

Under the settlement negotiated by Sun, CIT, Jevic and the committee, no assets were to be distributed to the truck drivers despite the WARN Act class-action judgment. The settlement did, however, provide for distributions to general unsecured claims. The group of Jevic truck drivers appealed the bankruptcy court ruling to the U.S District Court for the District of Delaware and the Third U.S. Circuit Court of Appeals, but was the appeals were denied.

This past summer, the Supreme Court agreed to review the case. At that time, the Wall Street Journal wrote:

“The question of what to do about bankruptcy rules that get in the way of a settlement has divided courts of appeal across the country, with some courts rejecting settlements that don’t comply with the scheme set out by Congress for who gets paid first.”

“The Bankruptcy Code contains a clearly-defined priority scheme for distributions to creditors of the bankruptcy estate, which is grounded on considerations of fairness to all creditors,” said Clayton D. Ketter, a Director at Phillips Murrah who specializes in financial restructurings and bankruptcy matters.

The negotiated structured dismissal did not include the consent of the group of Jevic truck drivers, the SCOTUS opinion stated, which allowed Jevic to evade its priority-creditor responsibility to the unpaid drivers. As long as priority creditors don’t consent to the deal, such settlements can’t be approved, the High Court said.

“In the case before us, a Bankruptcy Court dismissed a Chapter 11 bankruptcy. But the court did not simply restore the prepetition status quo. Instead, the court ordered a distribution of estate assets that gave money to high-priority secured creditors and to low-priority general unsecured creditors but which skipped certain dissenting mid-priority creditors. The skipped creditors would have been entitled to payment ahead of the general unsecured creditors in a Chapter 11 plan (or in a Chapter 7 liquidation). See §§507, 725, 726, 1129. The question before us is whether a bankruptcy court has the legal power to order this priority-skipping kind of distribution scheme in connection with a Chapter 11 dismissal.

In our view, a bankruptcy court does not have such a power. A distribution scheme ordered in connection with the dismissal of a Chapter 11 case cannot, without the consent of the affected parties, deviate from the basic priority rules that apply under the primary mechanisms the Code establishes for final distributions of estate value in business bankruptcies,” wrote Justice Breyer.

“The Supreme Court’s ruling reinforces the enforceability of those priorities and clarifies that priority line jumping through a structured settlement will not be permitted,” Ketter said.

The Jevic case will now head back to bankruptcy court for more work.

The Takeaway

What are the implications of this decision, beyond the fairly narrow Supreme Court’s ruling? Will it affect the overall utilization of structured dismissals across the industry?

Ketter said that he has noticed a rise of structured dismissals in bankruptcy cases, which typically follow a sale of a substantial portion of the debtor’s assets.

“I don’t foresee the Jevic decision changing that,” he added. “The Supreme Court Justices did not say that structured dismissals are not allowed.  Rather, they said that structured dismissals that violate the bankruptcy code’s priority scheme are not allowed.  Thus, we are likely to continue to see structured dismissals used, so long as they do not impermissibly skip a class of creditors in making distributions.”

However, Ketter added that decision may have broader implications outside the realm of structured dismissals.

“For example, there are types of plans within a bankruptcy case where a priority class voluntarily gifts a portion of the recovery it would otherwise be due to a lower priority class,” he added. “Sometimes, those gifted distributions skip other classes sitting higher on the priority scheme.  The Jevic decision raises the question of whether such plans are permissible.”

 

Clayton D. Ketter is a Director and a litigator whose practice involves a wide range of business litigation in both federal and state court, including extensive experience in financial restructurings and bankruptcy matters.

Roth: OKC in top 10 U.S. cities for solar potential

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on March 27, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

OKC in top 10 U.S. cities for solar potential

Google’s “Project Sunroof” program just expanded into every state in America to ascertain which areas are most suitable for solar power and not surprisingly sunny Oklahoma, and specifically sunny Oklahoma City, came out in the top 10 cities across this great country. While Houston was ranked No. 1, Oklahoma City achieved the eighth-best spot, besting Dallas and Albuquerque to round out the top 10.

Overall, the expanded analysis concluded that 80 percent of all American rooftops assessed are suitable and can technically benefit from the installation of solar panels for energy generation. That is an astounding reality and speaks to the coming enormity of solar energy for our country’s future, especially as technology is improving fast and prices are dropping precipitously.

Curious about your own home’s potential? Please check out the project website and simply put in your ZIP code at: www.google.com/get/sunroof#p=0.

My own home was analyzed and shows the potential for at least $3,000 in estimated savings over 20 years due to:

• 1,695 hours of usable sunlight per year, based on day-to-day analysis of weather patterns.

• 352 square feet available for solar panels, based on 3-D modeling of my roof and nearby trees.

• Recommended solar installation size of a 4.75-kilowatt system that could provide more than 21 percent of my electricity consumption (in reality I would probably size it even larger to live freer from dirtier electricity).

All of this great analysis is free and provided using Google Earth and Google Maps technology to build specific 3-D models by assessing weather, trees and other factors that affect your roof’s potential to the sun’s exposure. It was fascinating to see it actually illustrate my own home’s roofs and the analysis specifics, based upon my electricity consumption.

And while it doesn’t yet speak to the local policy issues impacting these equations, such as the fact Oklahoma utilities aren’t yet required to pay homeowners “fair value” price for the energy that your rooftop system may “export” back to the grid for use by others, it does illuminate many of the basics that can get your analysis started. The website even lists solar providers in your area so you can take the next step to have industry experts visit your home and help calculate your system options, payback timelines and any local, state or federal incentives that might help.

In addition, as an aside, please know that the future is looking bright for Oklahomans to adopt more solar energy, as just last week the Oklahoma Corporation Commission voted to block a utility’s request to raise charges on rooftop solar customers. The case centered on the reality that when you study the economics, neighbors with rooftop solar energy are actually providing greater benefit to their neighbors through exported energy than those customers themselves cost the system to tie into the grid. That helps Oklahoma move from its current ranking of 48th in solar adoption toward the enormous potential we have as Oklahoma City ranked eighth suggests.

What are you waiting for? Chances are really good the sun will come up again tomorrow.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Pushing American ingenuity forward

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on March 20, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Pushing American ingenuity forward

Two cars leave Detroit at the exact same time, traveling 60 miles per hour, headed to drive through every state in the continental United States over the coming years.

Car A begins and maintains a steady 34-miles-per-gallon fuel efficiency during every year of its journey, while emitting 3 billion tons of carbon dioxide into the atmosphere over eight years. Car B begins year 2017 with 34-miles-per-gallon fuel efficiency and adjusts upward each year to a level of 54 miles per gallon by 2025, while emitting only 2 billion tons of carbon dioxide during the same eight-year period.

Now unlike those typical rate-time-distance math questions, this presents a more direct question for the American consumer: Which car would you want to own?

For me, and my family’s budget, the answer is Car B.

Moreover, perhaps the bigger question, the great unknown with the scenario above that is actually beginning to play out in national politics today, is: Which car will be available for you from an American manufacturer?

That answer seems more likely to be Car A, if “Detroit” gets its way.

The Corporate Average Fuel Economy, or CAFE standards are American regulations, first passed by Congress in 1975 in reaction to the 1973 Arab Oil Embargo. These regulations exist to improve the average fuel economy of cars and “light trucks,” including trucks, vans and SUVs, produced for sale in America. The calculations and mathematical formulas for setting the CAFE standards have evolved over time and since 2012, the standards are determined through an inverse-linear formula reflecting the footprint of various vehicles by fleet.

The National Highway Traffic Safety Administration regulates CAFE standards and the Environmental Protection Agency measures vehicle fuel efficiency. Congress specifies that CAFE standards must be set at the “maximum feasible level” given consideration for: technological feasibility; economic practicality; effect of other standards on fuel economy; and need of the nation to conserve energy.

I wish that Congress would actually include a fifth consideration for the “need for American consumers to save money” or at least “need for American ingenuity to be pushed forward.”

While it’s probably true that most American consumer behavior is driven by pure economics, it has also been true that Americans will buy big gas guzzlers unless and until they can’t afford the largesse of that vehicle’s gas consumption. And the same is true, that many Americans will search out cars in the market that meet their budget-conscious needs too, as has been evident in the past decades as Japanese imports with higher fuel economy, better safety records and less maintenance costs began a strong foothold into the American market. Meanwhile, most American car manufacturers fought innovation and regulation, including fighting early versions of electric cars. I’m old enough to remember that was the first time that Detroit needed a taxpayer bailout.

So please pay close attention to the “Detroit 3” asking the president to reopen the new 2016 “Midterm CAFE Standards” and whether their reasons are to benefit the consumer or themselves. And although the 2025 model year target of 54.5 miles per gallon may seem tough, there is no doubt that the increasing fuel efficiency standards are a direct benefit to your families’ bottom line, to our collective energy and national security and to the arc of American ingenuity.

Lets’ not take our foot off the accelerator now.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Storm clouds and a silver lining?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on March 13, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Storm clouds and a silver lining?

As Oklahoma’s oil and gas industry looks ahead, cautiously optimistic into 2017 and beyond, it seems there are reasons to be hopeful and still causes for worry. That dual reality has played out already in 2017 and especially within the past week.

As the Oklahoma state budget indicates, the oil and gas patch has been going through a very rough patch for the past few years. And as a country, American oil and gas production has remained steady, albeit more productive than the market can bear. Hence the oversupply and low-price reality exacerbating the industry these past few years.

Where have we been since the high of $110 per barrel of oil in 2014? Well it’s been a rocky road for sure. And 2016 can perfectly illustrate that bumpy journey.

At the beginning of 2016, the U.S. benchmark saw a nearly 13-year low with prices per barrel of oil falling below $27. Yes, that’s less than a quarter of the 2014 price high and no wonder many companies got slammed hard, including bankruptcies and reorganizations to survive. Then a rebound began, due in large part to optimism around production control announced by OPEC and its collaborators, as the rebound more than doubled the price of crude. 2016 saw the U.S. benchmark futures achieve the biggest annual gain in seven years, including an 8-percent gain in December alone.

And as the industry rolled into 2017, hope continued to build that the low commodity price storm clouds may be dissipating. Rig activity is building, some companies are announcing expanded capital programs and cautious smiles are beginning to reappear.

Volatility seemed to be leveling out, as oil traded within a $4 range over the past two months, creating the smoothest period for oil prices since 2014. But then a thunderhead popped up quickly and rained some doubt again for the industry, and prices tumbled for oil and for publicly traded companies directly involved.

Last Wednesday and Thursday saw oil futures fall over 7 percent in two days, sliding back under $50 per barrel as worries continue. Storage data revealed near record highs and suggestions that a rush to produce could further flood the market and continue downward pressure on prices. And an industry desperately in need of balance is being reminded that most factors impacting their industry are beyond their control.

What is more likely within the industry’s control, the cost of doing business, may be the silver lining in all of this stormy experience. Here’s what I mean.

Oklahoma producers have become all too familiar with feast and famine over the past decades. And the smartest amongst us seek out cost efficiencies through the drill bit at times such as these. Through deployed innovation and cost savings implemented structurally in the production processes, many Oklahoma producers are learning to create more with less. And as the industry picks up, with labor demands tightening, land lease prices increasing and energy service companies in growing demand, the exploration and production companies that have implemented price discipline in their own internal practices should weather any coming volatility. It is estimated that about one-third of a well’s costs are on the drilling side, with the remaining two-thirds being for the well’s completion costs. Oklahoma’s companies and Oklahoma’s SCOOP, STACK and the NW STACK plays are going to be laboratories for whether innovative producers can not only compete, but succeed in the new normal of external price pressures.

All of Oklahoma needs them to succeed.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Mary Holloway Richard sourced in article investigating hospital merger

Mary Holloway Richard is recognized as one of pioneers in health care law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families.

Mary Holloway Richard, Phillips Murrah Of Counsel Attorney and leader of the Firm’s Health Care Practice, was quoted in a Journal Record article by Sarah Terry-Cobo regarding an attempted merger by OU Medical System and how best to financially achieve that mission.

Read Richard’s comments from the article below:

OKLAHOMA CITY – When it comes to complicated relationships, sometimes it just takes the right partner. After a failed hospital merger was announced Monday, OU Medical System could still find its better half.

But making that match probably won’t be easy, said industry observers. Health care attorney Mary Holloway Richard said a potential partner needs the business expertise as well as the financial backing to purchase a large teaching hospital.

Richard said teaching hospitals have historically had higher costs than non-academic hospitals.

A potential partner has to evaluate the economic feasibility, regardless of whether parties are considering an outright acquisition or a joint venture, she said.

“Will it fit in with your overall business model?” Richard said. “(A teaching hospital) is a complex system, so how you incorporate that complex system into an existing system requires mastery of both the business model and the financial feasibility, as well as recognition of the compliance issues at play.”

Read the full article at the Journal Record.

Doing business in multiple states

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on March 9, 2017.


Kendra M. Norman represents individuals and businesses in a broad range of transactional matters.

By Phillips Murrah Attorney Kendra M. Norman

One of the first considerations in forming a business entity is where to organize or incorporate. However, there is another important and frequently overlooked inquiry, which is where else to qualify that entity to do business.

If a business entity functions outside of the state in which it was formed, it may need to qualify to do business in that foreign state. Each state has different requirements for what constitutes doing business for this purpose. For many states, certain activities within that state, without more, do not require qualification. These activities usually include maintaining bank accounts, carrying on activities concerning internal corporate affairs, acquiring indebtedness, owning real or personal property, or conducting isolated transactions completed in 30 days.

Thus, the threshold for requiring businesses to qualify is relatively high. While these acts may not constitute doing business for qualification purposes by themselves, the general standard for qualification is based on the cumulative effect of all of the activities performed in the state in question. Generally, to be required to qualify, the foreign entity must transact a substantial part of its ordinary business within the state. To constitute ordinary business, activities must be indispensable to the business rather than simply incidental.

Failure to qualify can result in many penalties. Entities can be barred from access to the courts in states where they are unqualified, including Oklahoma. This can mean they are unable to enforce contracts entered into in these states. Unqualified entities, and individuals acting on their behalf, can be fined by foreign states in which they do business, including Oklahoma, where there is a statutory provision imposing fines. These fines can include backward-looking fees and franchise taxes to the state for the period in which the entity has operated while unqualified in the state, as well as a fine per transaction while unqualified.

The best course of action when faced with these issues is to determine where a business entity will transact substantial business and examine the specific statutory and case law of that state to determine if qualification is required.

Practitioners should keep in mind that what constitutes doing business for qualification purposes may not be the same threshold for what constitutes doing business for taxation and service of process purposes in some states, including Oklahoma.

Kendra M. Norman is an attorney at Phillips Murrah, where she represents individuals and businesses in a broad range of transactional matters.

Oklahoma Bankers Association marks increase in check, wire fraud attempts

Oklahoma Bankers Association recently issued a Fraud Alert, a notice seldom sent to its members. The notice brings to light increases in two types of fraud at banks: Check fraud and wire fraud.

Regarding check fraud attempts, banks have reported receiving “account funds availability” verification calls on existing accounts, followed by a call from the “customer” who claims to be sending someone to the bank to cash a large check.

OBA said that the surge in check fraud is due to “social engineering,” defined as using deception to manipulate individuals into divulging confidential or personal information. They added that recent fraud attempts have been valued in the tens of thousands of dollars.

“This is a regular issue we’re seeing, and I would be most apprehensive about social engineering,” said Don Pape, an Of Counsel Attorney at Phillips Murrah who specializes in banking law. “There are people who will, in essence, test the security of large companies and will manage to move into the company. Employees need to be cautious when receiving requests from people they don’t know well, and be diligent when verifying wire transfer requests.”

OBA suggests banks consider having a manager involved in the process of dispensing large amounts of cash. Managers should follow up calls from the alleged “customer” with a call to the customer number on file. This procedure is similar to that of wire fraud protection procedures, they said.

Hackers are watching

A surge of wire fraud activity has also been linked to social engineering, whereas cyber criminals hack into business emails for extended periods of time and mimic emails requesting wire transfers within a company. They are able to seem more authentic by replicating language patterns and having knowledge of a customer’s daily activities.

“The problem comes in when banks call back a customer to verify a transfer and ‘Partner A’ confirms based on what ‘Partner B’ says without realizing ‘Partner B’ was actually the person hacking the account and making the fraudulent request,” said Elaine Dodd, Executive Vice President of OBA’s Fraud Division. “Hackers previously observed email activity for 229 days. We’ve seen an increase to 300 days for hackers to gather information about a victim’s family or daily appointments in order to send fraudulent emails at the most opportune time, likely when the victim is off work or on vacation.”

There is an increased amount of information fraudsters have on customers, and this is contributed to any number of recent massive data breaches, Dodd said.

“Really scrutinize where a wire fund request email comes from,” she advised. “If something feels wrong, little details can clarify a source.”

For example, she recommended that the recipient should closely check the sender’s email address to be sure it’s authentic.

“Usually, the change is nothing substantial, perhaps a period or letter,” She added. “The best thing to do to be safe is pick up the phone and call the person requesting wire.”

OBA provides retail training on this topic to help bankers better inform and protect customers.

“Stay safe out there,” Dodd said. “I encourage anyone who has working knowledge of these types of frauds to share in their social circle, business and social. We could all be at risk.”

Roth: Right-wing social engineering?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on February 27, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Right-wing social engineering?

Not long ago American conservatives professed free-market solutions and an economy without job-killing regulations that pick winners and losers, yet those principles seem to be a thing of the past when it comes to clean energy these days.

To be fair, the American economy does not really meet the actual definition of free market, which according to Dictionary.com is “An economic system in which prices and wages are determined by unrestricted competition between businesses, without government regulation or fear of monopolies.”

Also, perhaps because much of America’s electricity sector is highly regulated, either as a monopoly or something very close to it, but whatever the reason, 2017 is seeing an unprecedented level of activity attempting to interfere with energy markets.

All across America conservative lawmakers have been introducing a number of bills and legislative efforts to block, tax, halt, hobble and hurt the economics of and markets for clean energy. Here is just a sampling from a few states in 2017:

Wyoming – Nine legislators (two senators and seven representatives, all Republicans, mostly from coal-producing counties) have introduced a new measure that would forbid Wyoming utilities from acquiring any electricity from wind or solar energy projects by 2019, regardless of the fact that those resources are becoming cheaper than traditional fossil fuel. The bill would levy steep fines on utilities if they continue to provide “non-eligible clean energy” for their electric service.

By the way, Wyoming generates and consumes mostly coal-powered electricity, which accounted for roughly 90 percent of its electricity in 2016.

North Dakota – Republican Sen. Dwight Cook introduced a measure (Senate Bill 2314) to impose a moratorium on wind energy development through 2019 and he used a procedural maneuver called a hog-house amendment that erases an existing bill and rewrites it so that the public can’t comment on the proposal because hearings already have been held on the original measure. And even though this tactic may stink to high heaven, a North Dakota Senate committee approved it this week in a 4-3 vote. North Dakota is a coal state and is home to seven coal plants, where it exports almost 70 percent of its total electricity generation to neighboring states.

Oklahoma – Republican legislators have introduced more than 60 bills about wind energy and the governor’s State of the State budget address included a proposed new tax on wind energy, which would be the highest in the nation at $5 per megawatt-hour of electricity on every customer’s utility bill. Granted, Oklahoma has a severe budget dilemma, but this electricity tax idea noticeably does not include any similar tax provisions for out-of-state coal or in-state natural gas, which are still the largest parts of Oklahoma’s electricity portfolio.

So what is going on? Why have conservative policymakers seemingly abandoned their core economic free-market philosophies to push regulations designed to put the hurt on clean energy?

It’s especially odd when you read the 2016 GOP platform on regulation, which states:

Regulation: The Quiet Tyranny – Over-regulation is the quiet tyranny of the “Nanny State.” It hamstrings American businesses and hobbles economic growth.

A possible answer? Coal energy is on the ropes and its sympathizers know that desperate times may call for desperate measures. Nevertheless, no matter how many conservative nannies pop up across the country to push to save coal, the power of economics, like water, will flow to their logical outcome over time.

And for us Oklahomans, that is actually a good thing, because clean-burning, (overly) abundant (and cheap) domestic natural gas is the greatest, single market effect pushing coal to the ash heap on energy history. It will not be immediate, so please do not celebrate or panic, but it is real and it is here to stay. Free-market or not.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Florida taxes oranges?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on February 13, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Florida taxes oranges?

If you were to read a headline that the state of Florida was looking to add a 25-percent tax to the price of oranges, you might scratch your head and wonder why they would intentionally hurt one of their largest industries. In Florida, agriculture is second only to tourism.

Such was my reaction when Oklahoma state leaders unveiled an idea this past week to tax their way out of a recurring budget shortfall dilemma by proposing a new tax on Oklahoma’s wind energy, thereby raising the cost of every single Oklahoman’s monthly utility bill. Wind energy accounted for roughly 20 percent of the state’s total electricity last year, so you can do the math about an increase to 20 percent of your electricity fuel bill.

The proposed $5 per megawatt-hour of wind power generation amounts to an approximate 25-percent increase to the cost of wind power, which is now being developed and sold in Oklahoma at around $20 per Mwh.

It’s also interesting to note that only one other state in America has a tax on wind production and Wyoming, where coal is king, has a $1-per-megawatt-hour tax, a whole one-fifth of Oklahoma’s proposed new tax rate.

Oklahoma has enormous energy blessings in the form of natural gas, wind and oil. Recently, the U.S. Energy Information Administration updated its state rankings and has Oklahoma third in the country in natural gas production and fifth in crude oil production. Oklahoma is now also ranked third in wind power with 6,645 megawatts of wind capacity as of the end of 2016, just surpassing California and now trailing only Texas (20,321 MWs) and Iowa (6,917 MWs).

It’s true what Oscar Hammerstein wrote about Oklahoma in our fabled state song, “…where the wind comes sweeping down the plain, and the wavin’ wheat can sure smell sweet,” yet we probably aren’t “doin’ fine” if we are so desperate to tax one of our leading industries, 25 percent to just make budget.

There’s a better way, if you think there is a necessity to push new taxes on electricity generation. There’s an Oklahoma way. Develop a tax approach that makes pollution more expensive, not Oklahoma’s clean energy. And this is an approach being pitched nationally by a large group of prominent, conservative Republicans, who believe it’s time to tax carbon, a real villain, rather than American energy itself.

Former Secretaries of State James Baker and George Schultz, former Treasury Secretary Hank Paulson, business leaders like Rob Walton, former chairman on Wal-Mart, and many others were in D.C. this month meeting with Vice President Mike Pence and other leaders to detail their blueprint for a $40-per-metric-ton tax on carbon dioxide pollution, with the price escalating over time. And yet the policy would actually protect low-income Americans from higher energy bills, unlike Oklahoma’s proposed wind electricity tax. Under Baker’s proposal, the projected $200 billion to $300 billion in annual revenue from the carbon tax would be distributed to households, by quarterly checks, from the Social Security Administration. It is estimated that families of four would receive about $2,000 a year in payments to them, not from them.

And through it all America would be transitioning, even more quickly to a cleaner energy economy and leading the world.

Oklahoma could lead also by a similar approach, rather than hobbling one of its leading industries, with large investments in the state, by targeting wind. We should target negative aspects of human behavior; such is the justification for increasing cigarette taxes, right?

An Oklahoma pollution tax would make winners out of our state’s cleaner-burning natural gas and wind industries, would drive greater production and demand for both and would in turn reduce health care costs to families and businesses by reducing harmful pollutants in our air. We would send less hard-earned Oklahoma money to Wyoming for imported coal, where we are buying their schoolbooks instead of our own. We would in turn incentivize Oklahoma’s energy future by creating a growing market, not a shrinking one.

“Florida taxes fattening fried potatoes” makes more sense to me than “Oklahoma taxes its own wind.”

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Make American streams dirty again?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on February 6, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Make American streams dirty again?

If you were asked whether you favored clean streams and waterways for America, you would probably agree. But if the question were framed more political, such as do you favor the repeal of job-killing regulations that have impacted coal miners, would your opinion change?

Well either way, Congress has begun, as one of its very first acts this year, to repeal, perhaps forever, a new regulation to keep coal companies from dumping their mining waste into America’s waterways. It was approved within the last months under the Obama administration and so by U.S. law it is subject to revisit by Congress under the “1996 Congressional Review Act.” The Congressional Review Act allows for the repeal of recently finalized regulations if the House and the Senate, by simple majorities, and the new president agrees. And strangely enough, once repealed under the CRA a regulation, or anything similar to it, cannot ever be approved in the future. But enough about process and how it can happen, it seems to me that America should be more focused on if it should happen. Here’s why.

The Stream Protection Rule was finalized by the Department of Interior on Dec. 19 after years of development and public input. According to the department, the rule is intended to protect 6,000 miles of streams and 52,000 acres of American forest by creating a buffer zone between mines and nearby waterways, to protect drinking water and to require coal companies to restore streams and return mined areas to the conditions before the mining activity. Coal’s supporters have been vehemently opposed to this rule, describing it as unnecessary and a duplication of the existing Clean Water Act and they are taking no chances to get it repealed, while acting like the repeal alone could help prop up a declining coal business.

But the reality is that America’s electric sector is moving beyond its former coal-dominant days, towards cleaner-burning natural gas and renewables. Across America, over 300 coal plants have been retired over the last decade alone and more will continue to come offline. And that’s good news for states like Oklahoma, which are blessed with more natural gas and renewable potential than we could ever use ourselves. It’s also great news for anyone with lungs, because the reduction in air pollutants has been significant as older polluting coal plants go offline.

The cost for losing the protections from the Stream Protection Rule is great and irreversible. They are so, because the rule is focused on a practice of mining that involves blowing the tops off of America’s mountains and dumping the mining rock, soil and debris, or overburden, off the mountain and into nearby waterways, damning them up and changing the water quality and ecosystems forever.

Mountaintop mining is a method of coal mining used mostly in the Appalachian Mountains in the eastern United States, where explosives are used to blow up about 400 vertical feet of the top ridges of mountains to reveal coal seams underneath. Then those seams are mined and this higher-sulfur coal is shipped to be burned mostly in the states around Appalachia.

It’s not just about jobs. We Americans should want all Americans to have the opportunity for decent jobs that afford healthy, dignified lives for the workers and their families. And we should want today’s working generations and the coming generations to be in a growing pipeline of jobs that will sustain them throughout their working life. We should resist trying to prop up a fading, and sometimes dangerous, industry when we can help those workers transition to cleaner industries that don’t pollute our rivers, streams and bodies. We can also commit ourselves to protecting the amazing landscapes and purple mountain majesties that bless much of our country’s land. America has that ability if it looks forward, rather than back.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: We need more energy markets, not fewer

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on January 30, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

We need more energy markets, not fewer

Oklahoma’s energy blessings far exceed our own state’s needs and demand, which is why we have long sought markets beyond our borders.

We typically export our state’s largest commodities, especially natural gas, and we have become optimistic about global markets opening up to help take some of the massive over-supply that the American shale renaissance has helped create. A fight with our neighbors in Mexico is not good for Oklahoma, our economy or the promise of moving past the current recession that has gripped our state.

Since 2009 to now, U.S. pipeline exports of natural gas everywhere have doubled and almost all of that growth has been from exports from the U.S. to Mexico. In fact, since 2015, Mexico accounts for more than one-half of all U.S. exports of natural gas. Daily average pipeline exports now exceed 3.5 billion cubic feet per day, which is 85 percent above the previous five-year-period average, according to the U.S. Energy Information Administration.

Much of Mexico’s growth in natural gas consumption has been attributed to the growth in Mexico’s domestic electricity demand and the fact that Mexico, like the United States, has been choosing cleaner-burning natural gas for its power plants. Northern Mexico is particularly growing and the demand is expected to continue. In fact, Mexico announced in 2015 a five-year plan to significantly increase its pipeline infrastructure with 12 new pipelines over 3,200 miles, to allow for greater importation of American natural gas for its energy needs. As of today, contracts have been awarded on seven of the 12 pipelines, including a 2.6-billion-cubic-feet-per-day capacity pipe from southern Texas to Mexican states along the Gulf of Mexico.

We should want these markets to grow and we should want this infrastructure to access the massive supply available here in America. Those two things can directly benefit Oklahoma and the many producers who call Oklahoma home, regardless of where they produce.

This month USA Today ran an article that described how “six of the eight top oil-pumping states hit recession,” and the article quoted S&P saying about Oklahoma, “even modest economic softness could have prolonged negative effects.”

We already know that our state budget and economy are in peril because of the massive downturn in oil and gas commodity prices, which have led to serious drops in tax revenues. It is suggested that the 2018 budget will be off another 12.6 percent less spending capacity from even this year’s reduced budget.

Now is not the time to play political games with a neighbor and customer that accounts for such significant growth in our ability to export American and Oklahoma energies. Our economy and our national security are both better served by growing foreign markets for American goods.

Or as President Ronald Reagan said on May 16, 1987: “We should be trying to foster the growth of two-way trade, not trying to put up roadblocks, to open foreign markets, not close our own.”

Let’s throw that idea up against the proverbial “wall” and see what sticks today.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Medical bankruptcies likely to rise

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on Jan. 26, 2017.


Clayton D. Ketter is a Director and a litigator whose practice involves a wide range of business litigation in both federal and state court, including extensive experience in financial restructurings and bankruptcy matters.

By Phillips Murrah Director Clayton D. Ketter

One of the central promises of Donald Trump’s candidacy was that, once elected, the Affordable Care Act (also known as Obamacare) would be repealed. Now, with President Trump in office, and aided by a Republican Congress, the ACA’s remaining days are likely numbered.

According to the U.S. Department of Health and Human Services, the ACA has resulted in an estimated 20 million people who previously lacked health insurance becoming insured. Along with the many other effects resulting from a large number of Americans becoming insured, one less discussed consequence was a drop in medical-related bankruptcy filings.

Research by Daniel A. Austen, an associate professor at the Northeastern University School of Law, found that medical costs were a predominant cause of between 18 to 25 percent of all bankruptcies. Since the ACA was passed, one study by the National Bureau of Economic Research found that medical debt had been significantly reduced for those covered by the act.

These findings are intuitive, as hospital visits are often unexpected and typically result in large bills. Without insurance, most individuals lack the financial flexibility to absorb those medical debts. Bankruptcy can be an effective tool in those situations, as it can either allow a person to repay the debt over time or, in some cases, wipe it out altogether.

Problems can arise, however, for those facing ongoing health issues. A bankruptcy filing will only eliminate past debt. It does nothing for liabilities incurred after the bankruptcy is filed. Further, there are certain time restrictions to how often a person can receive a bankruptcy discharge. Depending on the type of bankruptcy at issue, those time limitations can be up to eight years. Thus, if an uninsured person is faced with a health issue that forces them to seek bankruptcy, his or her financial options may be seriously constrained if health issues return before the time limitations have run.

Such scenarios are all too familiar to bankruptcy practitioners, especially given insurance companies’ distaste to insuring people who have histories of health issues. Although there has been a temporary decline in those types of cases, they are likely to make a comeback should Congress choose to repeal the ACA without enacting a replacement or stopgap.

Clayton D. Ketter is a litigator at Phillips Murrah with experience in financial restructurings and bankruptcy matters.

Office Visit: Therapists need liability protection

By Mary Holloway Richard, Of Counsel for Phillips Murrah. This column was originally published in The Journal Record on January 18, 2017.


Mary Richard is recognized as one of pioneers in health care law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families.

Office Visit: Therapists need liability protection

Behavioral health is a unique subset of health care law. I long have been privileged to see firsthand the challenges in working as a therapist while successfully avoiding liability and regulatory land mines, and I am empathetic with patients and families.

I believe it is important to provide protection from liability for therapists and to eschew expansion to predicting dangerousness of patients as the standard of care to which they are held. Therapists must adhere to standards of care that, when breached, result in liability to a patient for harm caused by that breach. Forty years ago the therapist’s burden was expanded to encompass a duty to warn third parties under certain circumstances in Tarasoff v. Regents of Univ. of California.

Recently the Washington Supreme Court decided Volk v. DeMeerleer, expanding liability of mental health professionals to unidentified individuals. As in Tarasoff, reactions among states can range from adopting to rejecting the rule in response. Such decisions are framed in reliance on laws in other states, scholarly articles and treatises, such as the creation of post-Tarasoff California statutory immunity for the therapist’s duty to warn third parties.

The Washington Supreme Court ruled in Volk that a psychiatrist could be liable for homicides even though the victims were not identified as targets of violence. The decision expands the scope of liability beyond the professional’s traditional duty to create a duty to identified third parties and may also result in expanding the rule from mental health professionals to other providers.

It is true that the Volk case concerned the murders of a young mother and her son as well as the suicide of the patient who killed them, and we are all too familiar with the facts of Columbine and Newtown. And society must protect these individuals. We must balance the need to protect our communities from violence with the need to protect our providers from the reprehensible burden of liability for predicting violent propensities.

The Washington Supreme Court stated that whether the patient’s violent actions were foreseeable should have been resolved by a jury and created instability concerning professional liability. It remains to be seen if this holding reflects a national trend of expanding the scope of liability for mental health and other health care professionals.

Mary Richard is a health care attorney with Phillips Murrah and a member of the Behavioral Health Task Force of the American Health Lawyers Association.

Roth: The energy baseline

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on January 16, 2017.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

The energy baseline

The following information is proven by independent, empirical data provided from the nonpartisan Energy Information Administration within the U.S. Department of Energy and is not “fake news,” although it may not jibe with the conventional wisdom created by political theater: American oil production has experienced the biggest increase in history under President Obama’s tenure, up 87 percent.

Don’t believe it? Check out the actual data between 1920 and 2016: www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS1&f=M.

Now to be fair, not all the credit or blame for America’s energy picture can be attributed to any incumbent president, although most observers would say that more often they get the blame than any credit.

The combination of advances in technology like deep horizontal drilling and hydraulic well stimulation has unlocked massive amounts of previously unreachable reserves. Also, high energy prices had attracted a good deal of investment in this industry, which also helped drive exploration and production. And it might even surprise you to learn that production is also up on federal lands, which did require the approval of the Obama administration.

The same real-life data also proves that “clean energy” production, in the form of renewables and even energy efficiencies, have increased at historic rates, almost tripling during the past two terms. Thanks to hydraulic fracturing, cleaner-burning, abundant, American natural gas has replaced old, dirtier coal plants and transformed the power generation sector.

Yet, if you tuned into the divisive rhetoric of the 2016 campaign for president, you may have left disillusioned about America’s energy picture in spite of the facts. Signs reading “Trump digs Coal” may have helped persuade West Virginia, Pennsylvania and Ohio voters, but the winning economics of cheaper natural gas today may trump any federal effort to prop up yesterday’s coal over the next four or eight years. Also, America now employs more people in solar energy alone versus coal, let alone the many other forms of renewable energy like wind, hydro and biomass.

The state of our country’s energy production reality is strong, and growing. And the gains and direction achieved over the last two terms have all benefited our native Oklahoma as well, with historic growth in the forms of energy with which we are blessed.

As America undergoes a change in presidential administrations, it will be interesting to see what detours from these advances are pushed and what change may occur to the current trajectories. And as it relates to the unique combination of national security and economic prosperity achievable by greater domestic oil production and less imported foreign oil, please follow the facts to see what it may mean for you, your family, your business, your state and your country.

It will be important to recall the energy benchmark of predecessors to measure whether the new guy outperforms the previous guys, as it relates to energy independence. When President Richard Nixon, in his second term, famously declared the need for “energy independence within 10 years,” America was importing 35 percent of its petroleum. Nearing the end of oil-friendly Texan George W. Bush, America was importing nearly 60 percent of its total petroleum consumption from foreign sources and now with President Barack Obama it’s down to 24 percent.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Let it snow

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on January 9, 2016.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Let it snow

Snow: (noun) a precipitation in the form of small white ice crystals formed directly from the water vapor of the air at a temperature of less than 32 degrees Fahrenheit/0 degrees Celsius. (Merriam-Webster)

Snow seems to be something that people either love or hate. I love it. In fact, snowfall seems to trigger some inner kid in me, forever long as I can remember, that allows me to enjoy the beauty of it and even admire the way it can slow the hectic world around us even if just for a day. As a kid in the 1970s, I enjoyed making igloos that would last for days and weeks around Kansas City, where I grew up and sledding was also a fun experiment with gravity and speed.

And I recognize that some people really aren’t fans of snow and winter weather. To some it’s just dangerous and an interruption to school, work and life. But there are reasons that all people should welcome snow and what it means for our world. Here’s what I mean.

If you eat you should welcome snow, as it’s a vital part of agriculture production in many parts of America and beyond. Our farmers need snow to provide critical moisture to fields ahead of the planting in the spring. Once it melts it’s providing irrigation across all parts of a farmer’s field, even those areas beyond the reach of irrigation systems.

And it’s even more necessary to help blanket winter crops like Oklahoma’s winter wheat, providing a snow blanket of protection from those extremely cold days impacting the fall plantings. Agricultural shortages, as we’ve seen from drought conditions across parts of our country, are a direct hurt on those producers and an indirect hurt to your family’s budget.

If you enjoy nature you should welcome snow, as its thermal insulation helps many species dig snow caves for hibernating through the winter. Fresh snows, which have a high percentage of trapped air, help to reduce heat transfer and provide great insulation for many animals to survive their cold winters.

If you like a little quiet around you then you certainly must enjoy how fresh snow can lessen sound waves as the snow absorbs snow at the surface. You can probably remember how quiet life feels when you walk outside into a fresh snow. It’s a rare chance to turn down the volume around us.

And beyond these more immediate, obvious positives of snow and snowfall impacting our daily lives, even more significant benefits of snow are how it serves as Earth’s sunblock and water source for our entire planet’s sake.

If you’ve ever looked down at snow on a sunny day you too know that it really reflects the sunlight back off the ground. This may be a nuisance to anyone without sunglasses on, but this reality is critical to helping cool the planet, something that must happen in these winter months or Earth’s climate risks accelerate even faster. And as daylight hours increase toward the spring, late winter and spring snowfalls are even more important as a sunblock, albeit they are becoming rarer over the last 50 years.

Finally, snowmelt from layers of packed snow that have accumulated in mountain regions are one of the primary sources of fresh water on Earth and here in America. It is estimated that our Western states may get as much as 75 percent of their water supply from these snowmelts and even the East Coast areas benefit from the same life-sustaining annual thaw.

So whether you may fear that next snowfall because of traffic worries or you bounce out of bed happy to enjoy a day of play, please know that those tiny frozen water molecules blanketing the Earth are critical to our very survival. Plus, they can be a lot of fun for a kids of all ages.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: One-eyed vision?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on December 19, 2016.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

One-eyed vision?

Proverbs 29:18 KJV tells us: “Where there is no vision, the people perish: but he that keepeth the law, happy is he.”

And while there is debate among theologians about certain meanings and interpretations over the centuries, the underlying notion of vision leadership and adherence to it leading to happiness rather than to perish is clear. Equally important to this idea, I believe, is that the vision must be clear, complete and visible with both eyes.

Such is possibly not the case for Oklahoma legislators responsible for creating the vision for Oklahoma’s future. Our 2017 legislators will be asked to digest recent recommendations of public policy from the Oklahoma Incentive Evaluation Commission, yet the written word is but one-half of the story; one eye on some facts, with a blind one to the rest of the story, so-to-speak.

Here’s what I mean. On Dec. 15 the IEC submitted its report on 11 state economic tax incentives, all reviews of which were performed by an out-of-state firm (PFM) and submitted in November. The report suggested six “retains,” three “reconfigures,” one “allow to sunset” and one “repeal.”

Interestingly enough, the commission voted to accept all recommendations, except they specifically rejected the one “repeal,” thereby telling the Legislature to somehow maintain, in some form, all 11 state economic tax incentives. This may be a tough sell for a Legislature that will be dealing with yet another declining revenue picture and shrinking state budget; early estimates are $500 million less in the coming year.

Yet, our Legislature should take pause at this report, as their actions regarding it will either grow or diminish the state’s vision for years to come. And while I have tremendous respect for the commission members tasked with this difficult analysis, especially considering the short crunch time they had, I have greater concern that our Legislature may rely upon it without their own two-eyed, deeper thinking to get these issues right for Oklahoma.

I work in energy law and I also work in wind energy issues. And from this vantage I know that a full economic analysis of the costs and benefits of any energy tax structure/incentive/treatment must analyze both the local and state impacts. Such is not the case with this firm’s state-focused report to the IEC, and therefore such is not the case with the IEC’s report to the Legislature.

And while PFM admitted it didn’t analyze anything other than calculating costs to the state, some of the crucial failures of their one-eyed approach are:

• The analysis fails to take into account local impacts (schools, counties, cities, landowners), where the majority of the benefits of renewable energy exist.

• The $3.3 billion in appraised value of installed equipment and increased local property tax values and revenue to schools and local governments.

• The $1.2 billion in ad valorem taxes projected to be paid by wind developers between 2003 and 2043, money that wouldn’t exist but for those investments.

• The more than $10 billion invested in Oklahoma since 2003, in landowner payments, local jobs, taxes and investments.

It is right that we analyze annual costs to state government and the budget dilemma, hence costs to all of us, but it is dangerous to our state’s future if legislators act upon one-eyed analysis, especially now when our state family’s budget must plan for a future beyond just this next session. Let’s resolve for 2017 that our Oklahoma vision includes a clear, two-eyed view of the benefits to an energy future that is truly all-the-above as renewables have helped us become.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Thanks, OPEC?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on December 5, 2016.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Thanks, OPEC?

As an American consumer, more often than not OPEC has truly been a four-letter word, causing price spikes and negative impacts to our broader economy.

But as you fill up your car for holiday travel, at around $1.60 a gallon for gasoline, many Americans can be thankful for the low energy prices fueling their lives. Global oil prices have been under serious downward pressure for the past two years mostly because Saudi Arabia convinced its OPEC brethren to let market forces set the price and production continued to soar.

As an American energy enthusiast, I know that much of the thanks goes to our own domestic producers, the new technologies to discover and recover new reserves and the historic amounts of oil and gas production their ingenuity has made possible, thereby also providing oversupply to the benefit of American consumers.

But as an Oklahoman, I’m hesitant to give thanks to OPEC for much, especially as their two-plus-year campaign of oversupply was probably intended to hurt American producers, many of them right here in our part of the country. And in many ways it worked, as we’ve witnessed massive job losses, business contractions, some bankruptcies and general carnage in the energy services industries.

What is OPEC and why does it matter? Begun in 1960 in Baghdad, the Organization of Petroleum Exporting Countries is a permanent, inter-governmental organization whose founding members include: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Nine other member countries have joined over time: Qatar, Indonesia, Libya, United Arab Emirates, Algeria, Nigeria, Ecuador, Angola and Gabon and all other members operate under a Declaratory Statement of Petroleum Policy, which essentially expresses an inalienable right of these countries to exercise sovereignty over their natural resources in the interests of their national development.

These stated rights and purposes led to OPEC’s quick growing prominence as early as 1973 with the Arab oil embargo and its steep rise in oil prices. Since that time global and American economic cycles have been impacted by OPEC’s production and policies, sometimes as a symptom, sometimes the cause.

OPEC completed a deal to cut production (first cut since the recession of late 2008) and adopt other policies that have contributed to a sharp rally in oil prices around the world and here at home. The agreement to reduce their collective output by 1.2 million barrels a day to a new ceiling of 32.5 million barrels was a deeper cut than most observers were expecting.

Saudi Arabia will make the biggest cut at 486,000 barrels, but may actually increase its revenue because of the correspondent rise in prices per barrel. The new wrinkle is that non-OPEC countries, namely Russia, have purportedly also agreed to cut their production as well.

As we Americans also know not to trust Russia without verification, OPEC’s agreement also includes the implementation of a “high-level monitoring committee” to make sure parties abide by the terms of the agreement. They would do well to follow the agreement and enjoy an uptick in commodity prices, thereby earning as much or more revenue while leaving more supply in the ground for their later benefit.

Yet, if oil prices continue to rise, most expect American shale producers to ramp up output in hopes of regaining some lost profits (or at least ending losses), thereby creating a market cap of their own with a corresponding effect on oil prices. So the real question in light of OPEC’s announced production cut is whether American producers will avoid too much production coming back in and causing prices to collapse again.

Yes, I’m a consumer who is thankful to OPEC for the low prices these past years, but I’ll be a more thankful American and Oklahoman with American energy producers back in charge of their own destiny.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Office Visit: Taming the Reptile lawyer

By Director G. Calvin Sharpe. This guest column was originally published in The Journal Record on November 29, 2016.


G. Calvin Sharpe has 30 years of experience in Oklahoma courtrooms, representing a diverse list of business clients in matters relating to medical malpractice, medical devices, products liability, insurance and commercial litigation.

Office Visit: Taming the Reptile lawyer

The Reptile Theory is a legal trend that has recently gained popularity with the plaintiff’s bar. It is a strategy used to shift jury attention from considering complex trial details typical of a medical malpractice case, to reaction-driven responses that arise from the reptilian portion of the brain. The most primitive cognitive functions, such as breathing, hunger and survival, are generated from this inner portion of the brain, called the basal ganglia or the reptilian complex.

With the common assumption that jurors want to expose and punish the existence of danger, Reptile attorneys seek to establish the defendant doctor or health care provider as careless, indifferent or even malicious in their disregard for safety. The jury’s perception that the defendant endangered the plaintiff will stimulate the survival mechanism deep in their reptile complex. Thus, the jury will act to protect themselves and the community by awarding a substantial verdict in favor of the plaintiff.

As a health care defense litigator in Oklahoma, I have experienced this method firsthand. The Reptile Theory is successfully utilized to secure favorable verdicts and high damage awards. However, just as trends ascend, so do counterstrategies. The Reptile strategy is not the Jedi Mind Trick, and with proper preparation, defense lawyers can derail Reptile attorneys’ efforts before they can derail the jury.

A critical part of defending the Reptile method is to spend adequate time preparing witnesses for deposition, and subsequently, trial cross-examination. During deposition, the Reptile attorney will likely begin the process of establishing a collection of artificial safety rules that exceed the degree of prudence and caution required by law, known as Standard of Care.

For example, a deposed physician may be asked, “Is the ultimate safety of a patient the most important consideration in medical care?” An unprepared defendant would naturally want to say, “yes, of course.” However, this can be used during trial to characterize the physician as careless and unsafe when artificial safety rules established in deposition are contradicted, even if they exceed the legal standard of care required for a physician or health care provider.

Understanding of Reptile Theory within the legal community is still evolving. Defense lawyers are well-advised to educate themselves, their clients and the judge prior to squaring off against a Reptile lawyer.

G. Calvin Sharpe is a trial lawyer at Phillips Murrah law firm in Oklahoma City.

Roth: Solar and its erosion of socialism

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on November 28, 2016.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Solar and its erosion of socialism

Since long before the Affordable Care Act, Vermont Sen. Bernie Sanders and Social Security, Americans have relied upon socialism to safeguard their lives, provide vital services like water, electricity and infrastructure and to connect one another in a seemingly unbreakable co-dependence. The term and concept of socialism can be a politically charged (often negative) term in today’s culture, but the reality is it’s been the American way of life, in many ways, for many years.

But the greatest threat, or opportunity depending on your point of view, to disrupt some aspects of socialized American life is not whether Speaker Paul Ryan’s past efforts to privatize portions of Social Security have a new life or whether the incoming president will repeal “Obamacare,” it’s whether fast-paced solar energy technologies may give Americans the chance to “live free” so-to-speak, or at least more free in the energy future.

About five years ago, to a national energy audience, I once heard the late Aubrey McClendon state “we have more energy hitting the surface of the Earth every day from the sun than this planet may ever need, we simply don’t know yet how to harness and use it.”

He of course was right and the last five years have seen incredible growth in human ability to harness and use solar energy. And it’s about to disrupt some socialized ways of life, for the better.

Imagine if you will, you drive to and from work in your solar-powered car, park in your home’s garage with solar-technology shingles repowering it and your home, with the help of battery technology that has captured the sun for 24/7 benefit and value to your family. And what are the effects to our socialized systems? Well, the jury is still out on this question but it’s fair to believe that change is coming and that’s a good thing. Yet some of the change won’t be easy as it will involve recalculating and perhaps redesigning cost structures for things like the socialized electric grid and America’s road systems.

Imagine two case studies:

  • More Americans can rely upon a solar-powered home and live free of the local utility. If that trend moves quicker than utilities can divest from older, expensive debt like coal plants and built-out transmission and distribution grids, will the non-solar customers need to pay more for their older forms of socialized electricity? And if that’s the case, then the cost-competitiveness of stand-alone solar energy, compared to escalating utility costs, creates price signals that will motivate even more customers to switch to their own solar systems and hasten the cost increase in the incumbent utility rates.
  • As more Americans drive electric-powered cars right past gas stations without the need to fuel up, what happens to the funding of local roads and bridges that rely upon gas and diesel fuel tax collections to pay, in part, for the roadway system?

More cars may be relying upon their own energy generation, while roads receive less funding as less gasoline and diesel is consumed. And although Americans also pay for roads through public bonds, property taxes and general revenue, some may worry about the reduction of gas taxes into that funding pie.

Early “societal cost analyses” actually suggest that electric-powered cars are cheaper to society, on an all-in basis, because of reduced costs to health and environment compared to combustion engines. But the trend will undoubtedly impact socialized road funding as we know it today and will be something future public policy will need to adjust toward.

It’s rich irony to realize that the sun, something all humans on Earth have access to in common, may be the new way that we all live more separate and independent lives from each other.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Too early to know for sure

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on November 21, 2016.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Too early to know for sure

With the new president not yet taking office until Jan. 20, it is surely too early to know for sure what changes are in store for America’s energy and environment policies. But certain things are known with relative certainty: The philosophies of the outgoing and incoming administrations are certainly much different from one another. But what is unknown is how much will the effects of each be different and in what ways.

For eight years the Obama Administration has prioritized government action in the areas of energy and environmental policy. In fact, according to the White House’s website: “The President has taken unprecedented action to build the foundation for a clean energy economy, tackle the issue of climate change, and protect our environment.”

It is this action, especially the executive actions without congressional approval that has offended many republicans and has drawn the ire of the president-elect.

Since 2008, domestic energy related emissions have fallen to their lowest level in 20 years, due in large part to the massive boom in domestic natural gas production, which has helped to economically move dirtier coal out of the market in electricity and industrial output. Also, America has seen rapid growth in renewable energy development and Americans have more clean energy options today than any other time in history. Those technological progresses, coupled with many Clean Air Act policies and other regulatory pressures, have America headed toward a lower carbon future, where energy security is becoming a national security reality because of domestic production.

It seems obvious that the president-elect will make good on his campaign promise to “roll-back” regulations, but what is less obvious is: How far, which regulations and to what effect?

Obama’s Clean Power Plan, which Trump has vowed to kill, will be an early target along with several environmental and energy rules under litigation including the EPA’s controversial Waters of the US Rule, which has concerned many farm states, the Department of the Interior’s fracking rule and issues around public lands leasing for drilling. But again, at what practical impact is still anyone’s guess.

For example, even if Trump tries to re-open many coal mines in Appalachia, where the product is much dirtier than Wyoming’s Powder River Basin, where is the market for that product? Few utilities are still burning coal, many are under court-ordered retirement schedules and the enormous supply of cleaner-burning natural gas will continue to undercut the price of coal.

Also, and sometimes at the same pro-coal rallies, candidate Trump made promises about greater drilling for oil and natural gas that will only further over-supply the gas picture and make coal less competitive. So it’s a bit of a stretch to think that local utilities are going to ask their regulators for permission to raise the price of electricity so they can burn more coal and create more pollution. Market forces are at play here.

And political forces are at play in other ways that leave coal a diminished future, in spite of campaign promises from the president-elect. He would still have to convince the Republican Congress to join him in reversing America’s course toward a cleaner energy future.

Take wind for example. Republican Sen. Chuck Grassley, from Iowa, the original author of the wind energy production tax credit, warned candidate Trump in August “If he wants to do away with it, he’ll have to get a bill through Congress, and he’ll do it over my dead body.”

For environmentalists, there is certainly reason for worry as their priorities will be under attack from day one. Particular concern is justified when you consider that a climate-denier and skeptic named Myron Ebell is a possible nominee to be the head of the Environmental Protection Agency. But for those on the other side, their optimism may need to wait and see what actually happens legislatively and market-wise. Business can most assuredly expect relaxed regulations on energy consumption, industrial processes and their environmental footprint.

But the idea that all of America’s recent movements in energy and the environment are going to be reversed may prove to be more like the pre-election “big, beautiful wall to be paid for by Mexico” giving way to the post-election admission that it’s probably more likely a “fence in some places” if he can get Congress to pay for it with your money. Stay tuned.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Is there a price for nationalism?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on November 7, 2016.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Is there a price for nationalism?

This year we have seen perhaps the best of nationalism and perhaps the worst of it. From the 2016 Olympic Games and the American pride and patriotic togetherness they created, to the political rhetoric at play in this year’s presidential election calling for an America First approach to government policy, Americans are being asked to rally to an us-versus-them mentality.

But at what cost? And who is the “us” and who is the “them”?

Nationalism has been defined as: a shared group feeling in the significance of a geographical and sometimes demographic region seeking independence for its culture or ethnicity that holds that group together.

The problem seems to be, unlike cheering for the many diverse faces (culturally, religiously, racially) of these many talented American athletes, as they wear the same red, white and blue, nationalism in the political sphere seems to be more about division than prideful multiplication.

The danger of nationalism in America, the world’s most diverse country ever, is that the underlying nationalistic belief that citizenship should be limited to one religion (Christianity via Muslim ban) or one race (Caucasian via immigrants or “Mexican rapists”) is that it has most always led to the weakening of American interests at home and abroad.

For example, the America First approach to foreign policy, begun in the late 1930s, which encouraged inaction in world conflicts generally, and the appeasement of Adolf Hitler specifically, swept the country, allowing Hitler to sweep across much of Europe. Once America joined the war effort, the severity of the lives lost was much more than it would have been if America and allies had engaged sooner, with over 60 million people killed, including 419,400 dead Americans. It became the deadliest military conflict in world history and included horrific crimes against humanity and war-related famine taking the lives of millions more civilians. Most scholars would suggest that nationalism at home led to worse ultimate results at American expense.

And in economic terms, the idea of nationalism can also cause unintended negative consequences leading to economic isolation and decline. As one or more candidates for high office brag about ripping up trade deals, bringing back jobs and rigged economics, these slogans ignore the American reality that our economy has benefited from a global market. Yes, we often import more goods and services than we would like, but we also export a huge amount of American products to the world, often worth much more than the cheaper items we import.

Yes, these are complicated issues and yes it’s right to do more to strengthen our economy at home, but we must require more from our presidents than empty rhetoric, based in fear and misplaced cries of nationalism. Instead, America has always done better when we claim our place in the world, not shy away from it or withdraw; when we stand strong as a beacon of inclusive hope, freedom and liberty for a diverse culture, which in turn attracts the best of the world to America’s golden door.

“Give me your tired, your poor,

Your huddled masses yearning to breathe free,

The wretched refuse of your teeming shore.

Send these, the homeless, tempest-tossed to me,

I lift my lamp beside the golden door!”

Please vote. And please vote for the kind of America, where its diverse people fight for a proud country and earn the gold medal on the world stage, not the type of America where divisive nationalism shrinks our future and removes us further from that more perfect union.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

Roth: Clean water, local control and Oklahomans united against SQ 777

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on October 31, 2016.


Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Clean water, local control and Oklahomans united against SQ 777

There is no question that this year’s political cycle has been a particularly divisive one. On the national level, the rhetoric is ramped up to unprecedented levels, and there’s a clear divide in our country that may take generations to heal.

Republicans and Democrats can’t even agree with other Republicans and other Democrats; forget trying to find common ground across the aisle – unless you look at one of the state questions on the ballot in Oklahoma. Seemingly out of nowhere, a diverse coalition has emerged, and Republicans and Democrats alike are united in their opposition to State Question 777.

As you may know by now, SQ 777 is a proposed constitutional amendment that will make it virtually impossible for our Legislature, municipalities and administrative agencies to implement reasonable regulations on any aspect of the agricultural industry. No industry in Oklahoma currently enjoys this type of constitutional protection. And in my opinion, none should.

SQ 777’s proponents rail against government overreach and claim it will protect farms from burdensome overregulation, but Oklahomans aren’t buying it.

In fact, by preventing our local officials from having a say in future agriculture policy, SQ 777 will invite increased attention and intervention from federal regulators like the Environmental Protection Agency and the U.S. Department of Agriculture. In other words, if Oklahoma so severely restricts its ability to self-govern, the only authority left to fill the void will come from Washington, D.C. And we Oklahomans know better that the best form of government is that which is closest to the people, here at home.

Those opposing SQ 777 cite a wide range of concerns: protection of our water; making sure our laws banning cockfighting and puppy mills stay on the books; and safeguarding family farms from the havoc wreaked by corporate, foreign-owned farming operations all factor in to this unlikely band of naysayers.

And this band of naysayers is diverse and growing.

Those opposed to SQ 777 include Oklahoma City Mayor Mick Cornett (R), Cherokee Nation Chief Bill John Baker, Coach Barry Switzer, Gov. Brad Henry (D) and Gov. David Walters (D), just to name a few. Organizations against SQ 777 include the Intertribal Council of the Five Civilized Tribes, League of Women Voters and Save the Illinois River.

The Cherokee County Republican Women and the Cherokee County Federation of Democratic Women have even signed a joint resolution in opposition to the proposed amendment. Now that ought to tell us all something when leaders in both parties come together to protect our Oklahoma rights.

Municipalities of all sizes from Broken Bow to Oklahoma City have voiced their concerns as have the Oklahoma Municipal League and the Association of Central Oklahoma Governments. Newspapers across the state are also urging voters to reject the proposal.

While their reasons may differ, opponents of SQ 777 are united at a time when vitriol and discord have become the norm.

I hope on Election Day the ballots will show what recent polling shows on SQ 777, Oklahomans are in agreement. We must vote no on this dangerous, unnecessary proposal.

Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.

The tax audits are coming!

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on Oct. 27, 2016.


Chase H. Schnebel is a member of the Tax and Private Wealth Practice Group and assists clients in a variety of tax, business, and asset management issues.

By Phillips Murrah Attorney Chase H. Schnebel

The state of Oklahoma has ramped up efforts to collect tax revenue from those that may not be paying their fair share. Senate Bill 1579, signed into law in May, directs the Oklahoma Tax Commission “to enhance agency efforts to discover and reduce fraud and abuse of sales and use tax exemptions provided pursuant to the Sales and Use Tax Codes and the nonfiling and underreporting of sales and use taxes due and owing.”

The fiscal impact statement for SB 1579 has an estimated cost of approximately $4 million, but estimates increased revenues in excess of $50 million, with $26 million from increased sales tax collections. The law also directs the OTC to increase its audit staff to detect “through the use of enhanced technology” those who may owe the state money. With an estimated addition of 50 auditors, there is no doubt that the number of audits will increase.

An audit will typically start with the OTC requesting access to substantial business records. During the process, a taxpayer can expect to receive ongoing requests for documentation and explanations. The audit process involves close scrutiny of accounting records, tax returns, transactional documents, banking records and other relevant business records. If the audit results in a determination that the taxpayer owes tax, the OTC will issue a proposed assessment that may also include penalty and interest assessments.

A tax audit can be an invasive process and, upon receipt of an audit notification, individuals and businesses often feel vulnerable. A strategic approach to organizing and producing business records can substantially reduce exposure to assessments and the amount of time and resources necessary to complete the audit. Experienced tax professionals have knowledge of OTC audit procedures, statutes and regulations, which can be helpful in closing the audit process. If the OTC issues a proposed assessment, there are administrative procedures available that allow taxpayers to protest the assessment, request a waiver of penalty and interest assessments, and request an installment agreement to ensure a one-time assessment does not result in closure of the business.

The prospect of a state tax audit can be frightening and the process can be disruptive. To achieve the most desired possible outcome, it is important to involve tax professionals at the very beginning of the audit.

Chase H. Schnebel is an attorney at Phillips Murrah PC who specializes in tax issues.