Posts

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.

Director Jim Roth sourced in article about proposed task force to examine Oklahoma’s Corporation Commission

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 a Journal Record article by Sarah Terry-Cobo regarding a House Bill that seeks to create an 11-member task force to examine Oklahoma’s Corporation Commission is structure and funding.

Read Roth’s comments from the article below:

OKLAHOMA CITY –  Utilities, drillers, and telecommunications companies could have an opportunity to scrutinize one of their regulators.

State Rep. Weldon Watson said it’s time to take a closer look at the Oklahoma Corporation Commission and give those directly affected by the agency a chance to suggest changes. But at least one industry trade group representative questioned the timing and the need to dig into the agency.

Jim Roth, clean energy practice group director at Phillips Murrah, said reviewing the agency is an excellent idea.

“This is overdue,” he said. “Does the agency have all it needs structurally to function in the modern era?”

The agency and its staff of about 400 do an incredible job for very little money, Roth said. Often, some of the best employees are hired by the industries they regulate, he said.

Roth was a commissioner, serving from 2007 to 2010. He said he assumes the bill was brought with the best intentions to help the agency and the state get it right.

However, the proposed task force should be broader, he said.

“I don’t see one member of the task force without a conflict to the industry,” Roth said. “It’s important that Oklahomans not employed by these companies should have a voice.”

Read the full article at the Journal Record.

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.

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.

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: 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: Sunny opportunity for Oklahoma schools?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on September 12, 2016.


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

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

Sunny opportunity for Oklahoma schools?

According to the Oklahoma Policy Institute and other reputable observers, “Oklahoma had the dubious honor of having made the deepest cuts to school funding in the nation since the start of the recession in 2008. Now an update from the Center on Budget and Policy Priorities shows that our lead has widened. Adjusted for inflation, Oklahoma’s per student school formula funding has dropped 23.6 percent over the past six years, significantly more than in any other state.”

And that observation was in late 2014. As of 2016, on average Oklahoma continues to spend at the rate that maintains our ranking as 48th among the 50 states and the District of Columbia.

And as we know today our state’s budget dilemmas have only worsened in 2015 and 2016, with historic funding cuts further affecting investments in our public schools, our teachers and ultimately our young citizen students.

But rather than focusing on the budget appropriation side of schools’ economics, I want to share an idea with our state leaders that might actually be a win-win for schools by creating real budget relief in the form of lowering their costs of operations and creating an income opportunity.

Here’s how: Oklahoma’s 1,784 public school buildings spend a great deal of money to provide electricity for heating and cooling throughout the school year, and this growing expense in each school’s annual budget is often regarded as a mandatory expense without options. But that’s not true; Oklahoma does have options.

Imagine the installation of solar panels on top of many of these more than 1,000 school buildings all across the state, generating more electricity than the school itself needs and exporting that excess power to the grid, every month of the year and actually creating more income back to the school than the solar systems cost. Yes, income. How’s that for running government like a business?

It’s happening all across America already, as solar energy is booming in America, with installations in 2016 expected to double the amount from record-breaking 2015 and a trend line toward 20 gigawatts annually by 2020. The cost to install solar has dropped by more than 70 percent over the last 10 years, leading the industry to expand into new markets and deploy thousands of systems nationwide, including with many business and schools.

According to a recent report by the Solar Foundation and the Solar Energy Industries Association, there are nearly 4,000 K-12 schools in the United States with active solar systems, meaning more than 2.7 million American students attend solar schools. The report also found that thousands of other schools could save money by going solar. The large, flat rooftops typically found on public and private K-12 school buildings throughout Oklahoma make these buildings ideal for rooftop solar photovoltaic or solar thermal systems.

Parking lots and solar canopies are another obvious opportunity for Oklahoma schools to generate power, even more than their own buildings require, and the beauty of solar power is that the systems are generating energy at the most expensive time of the day. If you want to teach students something smart and observable every day outside of a textbook or a web page, schools can instruct students by doing something so obvious and observable to them every day.

Oklahoma is home to only one current solar installation at a public school, in the Tulsa area, yet there is enormous potential for school districts of all sizes all across the state. Our Legislature and our governor will need to agree with this idea and make slight changes to Oklahoma law to unlock this opportunity for our many cash-strapped public schools.

The utilities may fight it, as they’ve shown an intention so far to work against citizens who want to install and afford solar, but the Oklahoma taxpayer will love it. And after all, public officials take an oath to serve the citizens and this sunny opportunity is a great way to bring funding relief to our schools.

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.

Journal Record names three attorneys Woman of the Year

woty-web-logo-2016The Journal Record will honor Phillips Murrah directors Sally A. Hasenfratz, Dawn M. Rahme, and attorney Mary Holloway Richard as those named on the 2016 Fifty Making A Difference list.

Judge Jane P. Wiseman will be the keynote speaker at the 2016 Journal Record Woman of the Year gala set for Nov. 2 at the National Cowboy & Western Heritage Museum.

The Fifty Making A Difference list spotlights female business and community leaders, and honorees are chosen from nominations received across the state.

For more information, visit the Journal Record’s website.

Roth: Rhetoric and regulation

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on August 15, 2016.


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

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

Rhetoric and regulation

I’m about to share an opinion that seems highly unpopular today: I believe there is a role for government and responsible regulation to keep people safe.

Why is that so unpopular? Or even controversial to some? Perhaps it’s because I’m an Oklahoman who dares suggest that government has a role to play in our collective lives or perhaps it’s because I’m suggesting that people may need protection, in some form, from businesses that serve the public at large.

But if you are the parent of a 10-year-old boy who died at a Kansas City water park, or of any of the three young girls dumped out of a malfunctioning Ferris wheel in Tennessee, or of the boy who fell out of a wooden roller coaster in Pennsylvania, all in the past week, you may be wondering why tragedy befell your loved one and why more wasn’t done by the regulator to keep them safe.

Regulation, such as the role of regulators to inspect and approve the operation of amusement parks, equipment and rides, comes in many forms in American life, yet it seems to have become a bad word in political rhetoric in these modern times. And to be honest, I’m really at a loss as to why.

We’ve all heard the rhetoric: “too many regulations are killing jobs” or “we don’t need government regulation micro-managing our lives.” But which specific regulations are actually killing jobs by saving people’s lives? And if that’s the trade-off, doesn’t regulation win that swap each day and in every way?

I once had a close friend, a very smart business owner with hundreds of employees, tell me he was voting for George W. Bush so he would “rein in OSHA and needless safety regulations.” My friend left me perplexed as he seemingly framed it in an excessive cost-to-doing-business argument.

Yet, when I did some research for myself, I learned that the American Journal of Industrial Medicine actually concluded that the Occupational Safety and Health Administration does not kill jobs; rather, it prevents jobs from killing workers.

The much-maligned Environmental Protection Agency is responsible for implementing and enforcing America’s Clear Air Act, among many other environmental and public health law objectives. Chiefly the Clean Air Act, first passed in 1973, and amended in 1990, both by Republican presidents, is a comprehensive federal law that regulates air emissions and air quality by removing dangerous pollutants that “endanger public health and welfare.”

As of the 2011 prospective cost-benefit analysis, it has been determined that massive reductions in pollutants like sulfur dioxide, mercury and nitrous oxide have now helped avoid up to 230,000 premature deaths for Americans over the age of 30 each year, help avoid 280 infant deaths a year, have dramatically reduced bronchitis, asthma and other respiratory disease and in turn will help America save over $3.7 trillion in annual benefits by 2020.

And yet this campaign for president features a debate over reopening old coal mines for out-of-work coal miners, who while mining the greatest source of pollution when burned, suffer much risk to injury and health themselves. The better idea may be to retrain them for something that is better for themselves and all the rest of us.

So when you hear politicians talk in large generalized platitudes attacking big, bad ol’ “job-killing regulations,” please ask them:

Which regulation can you prove has cost how many jobs?

Or, which amusement park, factory or meat-processing plant should we not inspect?

Or, what harm, injury or death to your loved ones would you say is worth having for less regulation?

And please be specific.

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

Hasenfratz: Commercial real estate development is a team effort

This column was originally published in The Journal Record on August 4, 2016.


Sally A. Hasenfratz is a Director and a member of the Firm’s Real Estate, Tax and Family Wealth and Business Succession Practice Groups.

By Phillips Murrah Director Sally A. Hasenfratz

Commercial real estate development is a complex undertaking and must be managed with precision.

Taking a project from land acquisition to a sale or lease requires time, money and expertise. To ensure the project runs smoothly, accurately and on deadline, a team must come together and function at a high level.

The purpose of this column is to identify key players and examine their responsibilities.

  • Developers. The developer is the team leader with an overarching visionary concept and the ability to control each stage of the project in order to move it to completion. Without developers, there are no projects.
  • Title agents and surveyors. Developers work with title agents to ensure the property is clear of unintended encumbrances and to identify easements and other documents that may be recorded against the property. Surveyors then survey the land and create a graphic representation that shows the location of the project, including the structure’s orientation, access ways, boundaries, easements and related matters.
  • Architects and engineers. Architects and engineers translate developers’ vision into detailed plans by which the project will be constructed. They create the instructions on how to accurately bring the project into physical existence.
  • Builders and contractors. Builders and contractors start the process of construction. Guided by plans created by the architects and engineers, and led by a general contractor who oversees the day-to-day construction site, these team members physically build the project.
  • Regulators. Though not necessarily part of the team, regulators are important components of a project. Select team members work with regulators to make sure the property is zoned for the intended use and all necessary approvals are obtained, including building permits and the like.
  • Lenders. Lenders play a vital role on the team by funding the project. To ensure funds are properly utilized, lenders have a certain degree of oversight in the construction process.
  • Users. Typically, commercial projects are developed for sale or lease to meet the specific needs of users and occupants of the project.
  • Coordinators. Many of the team’s activities overlap or occur in a sequential fashion. Attorneys work with developers to help coordinate the process and make sure that the necessary contracts are in place.

Roth: PSO, AMI and ROI

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on July 25, 2016.


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

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

PSO, AMI and ROI

Wow, it’s hot. And it looks like it’s gonna be hot for a while still, as is not a surprise to us Oklahomans.

And once you recall the incredibly warm winter we just had, one can only imagine what August may feel like here. And as we’ve been discussing the last few weeks, a high-temperature weather month can often be followed by a high-cost electric utility bill the next billing cycle.

And as we’ve learned, deployment of new technology is providing customers near real-time price information and abilities to monitor and manage monthly costs, while also providing utility providers with a new slew of information and efficiencies to improve service and lower costs. It’s proving to have a real return on investment for both sides of the meter, so-to-speak.

Case in point: AEP’s Public Service Company of Oklahoma and their advanced metering infrastructure, as of this month, is now fully deployed across PSO’s vast Oklahoma service territory with the installation of more than 560,000 new meters, including those first pilot program meters in the Owasso area beginning in 2010. And with a seemingly huge reception from all territory customers, with over 99.5 percent of customers participating in the AMI program.

PSO has rightly indicated that the AMI program will provide an array of benefits to customers.

And they are not alone as several Oklahoma electric utilities have been using this type of technology for many years and the penetration rate nationwide is nearly 50 percent. I’m glad to see our customers are faring better than the national average and I’m also glad to know that PSO meets the highest standards of cybersecurity with encrypted technology to safeguard customer information. In fact, the Oklahoma Electric Usage Data Protection Act prohibits all utilities from providing any customer information to outside third parties.

And now for the extraordinarily good news for PSO customers: With the full installation of this metering technology, PSO was greatly aided in responding to the devastating storms and outages earlier in July (with 109,000 customers out at one point it was the third-largest storm by customers affected in PSO’s history), the AMI made possible the restoration of service to nearly everyone within three days.

And for those regular storm-free days when Oklahoma’s heat bakes the state, AMI has helped PSO provide new programs for customers’ budget needs, such as PowerHours and PowerPay.

PowerHours, which is similar to OG&E’s SmartHours program, runs June through October and allows enrolled customers to choose from four programs to save money through managed use.

Information on the options is available at www.psopowerhours.com.

Likewise, PowerPay is a voluntary program where customers can prepay for their usage, giving them greater control over the frequency and timing of their payments. No more surprise utility bills the month after high prices. Instead the customer is engaged in energy consumptions, management and related savings in this pay-as-you-go approach. It’s not for everyone, but is a good option for many, so please check it out and see if it’s right for your budget and household.

The return on PSO’s AMI investments can be directly enjoyed by its customers who explore these options, enroll in those that make the most sense for them, and control their own destiny through price signals, energy shifts and energy savings. It’s an exciting time when the cost of next month’s utility bill is based upon what customers choose to do this month for themselves.

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

Roth: It’s 4 p.m. Do you know where your thermostat is?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on July 11, 2016.


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

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

It’s 4 p.m. Do you know where your thermostat is?

It used to be asked if people knew where their children were at 10 p.m. as a form of safety check and good parenting. And that edict proved a helpful reminder.

But now, other times of the day pose danger for your families and only until recently can we help avoid or lessen those dangers.

It’s the risk to your families’ budgets from extraordinarily high electricity prices that occur often in the summer afternoons. For many decades before now, Americans never knew what cost spikes existed, leading to unpredictable monthly electricity bills. But the times they are a-changin’.

This past week as I stood in line at the post office a few minutes before 4 p.m., I received a text message as a participant in OG&E’s Smart Hours Program alerting me to a “critical price event,” beginning at 4 p.m., where the price of electricity would escalate to 44 cents per kilowatt-hour, more than four times the usual average.

A gentleman in line behind me must have received the same text as he soon thereafter called home to ask his wife to “turn up the thermostat and turn off the unnecessary appliances for the next three hours.”

And this man was probably in his mid-80s and seemed delighted at the opportunity to react to a price signal and save his family money. Each day’s text message also forecasts the price of the next day’s prices between 2 and 7 p.m., usually at the “high rate of 18 cents per kWh.” This is revolutionary.

And we Americans have seen other, once-dominant, mostly utility-like monopolies move to finally provide price signals for the consumers. I am referring to telecommunications and the growth of price transparency and ultimately competition.

Once we Americans learned to not “call family and friends until after 7 p.m.” it revolutionized the cost of long-distance and base rates for phone service and led to consumer choice, innovation and competitiveness. It also led to the decline in landline phones and the emergence and now prolific existence of wireless devices.

Today, we are just 20 years after the federal deregulation of telecommunications under President Bill Clinton, when the Telecommunications Act of 1996 was the first significant change in 60 years, and included the first inclusion of the internet in these issues. And today, most Americans have more technology in the palm of their hands than ever before and consumer price signals and consumer choice have ushered in a whole new reality.

The same is on the verge of being true for your electric utility bill, although not required by federal enactment, but driven by new technologies, consumer education and electricity providers working to usher in a new generation of electric generation.

Next week I’ll highlight a few of the global trends and the local utility options available to us Oklahomans in this relatively new and exciting frontier.

In the meantime, if it’s between 4 and 7 p.m. today, you might consider adjusting your electricity usage and saving your family some of that hard-earned money.

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

Roth: It’s twilight in Great Britain and the sunset is near

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on June 27, 2016.


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

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

It’s twilight in Great Britain and the sunset is near

“The empire on which the sun never sets” is a phrase used for centuries to describe certain global empires that were so large that at least one part of their claimed territory was always in daylight.

This phrase was originally used for the Spanish Empire, mainly in the 16th and 17th centuries, and its most notable use has been in reference to the British Empire, mainly in the 19th and 20th centuries, when the British Empire spanned a global territorial size larger than any other empire in history.

Famously, the independence of the 13 colonies and the founding of the United States caused Britain to lose some of its most important territory, but its dominance across the globe continued strong into the 19th century with the Industrial Revolution and the power of the imperial British navy.

But much has changed since those days and not just through the independence of former British sovereigns such as India, Zimbabwe (last colony in Africa), Belize (last colony in the Americas) and Hong Kong (last in Asia) in the late 20th century, but also economically as the world economy has blurred the lines of sovereign nations and made regional and global trade a universal currency.

Gone are the days when Great Britain could rely upon steady supply lines of raw materials from all corners of the globe to feed its booming industrial complex and grow its economy. For decades its waning global dominance has perhaps been shrouded by its involvement in the European Union, where 28 member states, accounting for just 7.3 percent of the world’s population, constitute 24 percent of the global gross domestic product in one single market across its members. This combined market advantage has made Europe an economic amalgamation that has proven much stronger together than separate economies that were ill-suited for events like the Great Recession and financial crisis of 2007-08.

Yet, this past week’s Brexit vote for Great Britain to leave the European Union has perhaps hastened the sun setting on this once great power, forever. Gone are the territories in every region of the world, together with a once-dominant naval presence to move goods across the globe. Gone too are the manufacturing sectors and industrial output that once could have allowed Great Britain to better stand alone and even build its own military if required to defend itself as it did in much of the first half of the 20th century in Europe. Today, 74 percent of Britain’s GDP is the service economy, including the financial services sector, but much of which is reliant upon relationships with foreign investment and investors in the EU and beyond. And now gone soon will be the regional economic, political and military advantages that come with the European Union and Great Britain will stand alone, from sunup to sun down with a shrinking role in the world.

And for what? Because many aging British retirees fear the current economy and impacts to their government pensions? Because many lesser-educated and rural citizens and those with blue-collar jobs are mad at the immigration influx creating a more competitive workforce? They want “Great Britain first.” Those demographic distinctions are what actual polling results have revealed from the Brexit vote.

So older, less-educated, mostly rural citizens wanted to “take their country back” and “make Great Britain Great Again” and they have pushed their once great, global empire faster and further into the twilight of their own setting sun.

Does that fear sound familiar?

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

Judge orders plaintiff to produce Facebook file

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on June 23, 2016.


Cody J. Cooper is an attorney whose practice is concentrated in commercial litigation, product liability, and intellectual property.

By Phillips Murrah Attorney Cody J. Cooper

The prevalence of social media continues to change litigation practices. As the availability of data about individuals related to social media continues to increase, so do the requests by opposing parties for this information. This necessarily requires analysis by the courts.

In an April order, the U.S. District Court for the Eastern District of Missouri wrestled with this very issue when it ordered a plaintiff to provide the defendant with her “Download Your Info” report from Facebook. See Rhone v. Schneider Nat’l Carriers, Inc., et al., No. 15-cv-01096 (E.D. Mo. 2015).

That lawsuit arose from a car accident and the plaintiff claimed severe, permanent and progressive physical and mental injuries that affected her lifestyle and ability to work.

During discovery, the defendant requested all of the plaintiff’s social media posts made since the date of the accident. The plaintiff simply responded “none.” The defendant then conducted an independent investigation and discovered substantial activity on the plaintiff’s Facebook profile, including posts about dancing and socializing. The defendant contended this was directly relevant to the plaintiff’s injuries.

The parties failed to reach an agreement on production of the information, so the defendant filed a motion to compel plaintiff to produce her Facebook data file. The court found that the plaintiff had failed to comply with her discovery obligations and ordered the plaintiff to download and produce to the defendant the Facebook data file, which includes all active posts, photos, videos and check-ins. The defendant claimed information had already been deleted and requested sanctions against the plaintiff, but the court decided to wait to determine whether the data file would show the alleged deleted information.

The case is still active, and it demonstrates the continued developing trend on treatment of social media. Particularly in case of personal injuries, but even in purely business disputes, postings by either party can become relevant and will likely be subject to discovery; efforts to delete or hide this information will typically result in severe penalties.

If you want to download your Facebook data file, go to settings, then the general tab, and click the link on the bottom – “Download a copy of your Facebook data” – and follow the instructions.

Roth: Oklahomans deserve to hear the facts about wind energy

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on June 20, 2016.


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

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

Oklahomans deserve to hear facts about wind energy

It’s no surprise that a review of taxes and tax incentives has recently garnered significant attention from lawmakers, voters and the news media as legislators worked this session to combat a historic budget shortfall. One of the most scrutinized policies has been the zero-emissions tax credit, set to expire in 2020, which will be the wind energy industry’s only remaining tax credit as of the end of this year.

As an Oklahoman dedicated not just to forward-looking, clean energy solutions, but also as someone who champions a diverse energy economy in our state, I’ve been floored by the misinformation about wind energy espoused recently by some state officials, reporters and other influencers. It’s time to set the record straight.

Perhaps the most egregiously misrepresented topic is the value of the last remaining tax credit in comparison to the dollars wind energy brings to our state, both in terms of corporate, ad valorem and other tax contributions and in terms of investment, jobs and infrastructure.

Some outspoken opponents have nonsensically implied wind energy’s one incentive is to blame for everything from the budget deficit to ongoing declines in general revenue collections. However, they fail to produce numbers that support these claims and do not consider how incentives to other industries – some of which receive multiple incentives – affect the state’s coffers as well. This paints an inflammatory, misleading and inaccurate picture of the billions of dollars the wind energy industry has contributed and will continue to contribute to our tax base and to state and local economies.

For 2015, the wind energy industry will receive an estimated $46 million as a result of this tax credit, a helpful but relatively small incentive compared to other industries, when considering facts such as:

• The industry has invested nearly $10 billion in Oklahoma and plans to continue investing.

• Economists predict wind energy developers will contribute about $1.2 billion in ad valorem taxes alone through 2043, directly benefiting local schools and communities.

• More than 7,000 Oklahomans can attribute their jobs to wind energy.

• Oklahoma’s largest utilities (OG&E and PSO) have locked in over $2 billion in customer savings through their own wind contracts, according to their own statements.

The zero-emissions tax incentive was created with the goal of drawing renewable investment to Oklahoma during a time when we were missing out on these dollars due to more attractive financial circumstances in neighboring states. Because of our incentive, wind energy now produces almost one-fifth of the electricity powering our homes and businesses and provides the cheapest form of electricity to Oklahomans. The case for keeping wind in our diverse energy mix is a strong one. And it’s made even stronger by tough state budgets reeling from a downturn in the oil and gas industries.

I encourage our elected officials, news media and others to check the facts and make sure the full story on wind energy is being told. As November elections draw near and Oklahoma voters evaluate our state’s leadership, its only right they hear the unbiased truth about this major economic contributor for Oklahoma. The truth my friend, is blowing in the wind.

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

Roth: Corporate agribusiness and the right to harm

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on May 16, 2016.


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

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

Corporate agribusiness and the right to harm

State Question 777 is a proposed amendment to the Oklahoma Constitution, voted on by the Oklahoma State Legislature to appear on the general election ballot on Nov. 8. But this idea didn’t originate in Oklahoma; it’s part of a national push by corporate farming interests rolling across America. Which is ironic because most of Oklahoma’s largest corporate animal processors are Chinese, Japanese and Brazilian.

The Farm Bureau, a well-respected organization, is the face pushing for this measure, while the Oklahoma Municipal League, the Sierra Club and the Humane Society are some of those opposed.

The proposed amendment would add a new section to the Oklahoma Constitution that would provide, in part, that “the rights of farmers and ranchers to engage in farming and ranching practices shall be forever guaranteed in this state.” This inspiring language has led proponents to refer to SQ 777 as the “right to farm.” However, the next sentence of the proposed amendment all but eliminates the Legislature’s ability to regulate farming in our state: “The Legislature shall pass no law which abridges the right of farmers and ranchers to employ agricultural technology and livestock production and ranching practices without a compelling state interest.” Opponents refer to this proposed amendment as the “right to harm.”

Missouri narrowly passed a constitutional amendment in 2014, also the product of corporate agribusiness pushing constitutional protections against local regulation. That amendment was also sponsored by the national Farm Bureau and the like. The vague and sweeping language of the Missouri amendment – which is almost identical to the proposed amendment in SQ 777 – has already sparked litigation and legal challenges.

Not only is the language of the proposed constitutional amendment ambiguous, it is also superfluous in many ways because Oklahoma already has a right-to-farm statute that protects farmers from nuisance liability. The last subpart of the statute also provides that farmers must abide by state and federal laws, including the Oklahoma Concentrated Animal Feeding Operations Act and the Oklahoma Registered Poultry Feeding Operations Act.  Legitimate farmers are well protected by existing Oklahoma law.

According to the U.S. Department of Commerce, agriculture, forestry, fishing, and hunting provided 1.1 percent of Oklahoma’s gross domestic product in 2014. Oklahoma has more than 80,000 farms, which includes approximately 73,000 family farms and 1,900 corporate farms. About 75 percent of the land in our state is agricultural land, and the average farm size is 430 acres. The agricultural industry employs more than 120,000 Oklahomans.

If SQ 777 is passed by voters in November, it would have far-reaching and detrimental effects on family farms in our state, to the advantage of larger corporate interests. It would tie the hands of the state Legislature and municipalities, making it almost impossible to implement reasonable and necessary regulations to protect land and water from corporate pollution. As stated in the proposed amendment, the state Legislature will not be able to pass statutes regulating farming activities unless the Legislature can show a compelling state interest. This is an extremely high burden, and most proposed legislation would not be able to satisfy this threshold. What about cock-fighting? Or puppy mills? Or over-flowing waste lagoons?

No other industry is afforded this type of constitutional protection. Forcing state legislators and local regulators to satisfy such a high constitutional burden in order to protect the interests of their constituents will allow major corporate agribusiness to operate with virtual impunity in Oklahoma.

SQ 777 states that it will not overturn any existing legislation that was passed before Dec. 31, 2014. Several laws passed in 2015 could be reversed by SQ 777, including statutes regulating puppy mills in large cities and protecting pollinating insects.

If SQ 777 were passed, it would only invite more federal government intervention from agencies like the Environmental Protection Agency and U.S. Department of Agriculture. If state regulators are rendered impotent by a state constitutional provision, federal regulators will be forced to step in to address environmental concerns, animal rights, water contamination and other harms.

Surely we Oklahomans can be trusted to respect legitimate farming interests and to respect the land that we belong to as grand without having to concrete corporate farm immunity into our vaulted Constitution. Right?

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

What are involuntary bankruptcies?

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on May 12, 2016.


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

Bankruptcies are on the rise. Expectations are that, unless oil and gas prices reverse course, related bankruptcy filings will continue.

The majority of these filings will be commenced by a debtor seeking shelter from creditors, known as voluntary filings. Used much less frequently are involuntary filings, where one or more creditors initiate a bankruptcy case without a debtor’s consent.

Two requirements must be met to force a debtor into an involuntary bankruptcy. One pertains to the number of creditors involved. Debtors with less than 12 creditors require only one creditor holding at least $15,325 in aggregate unsecured claims to file the petition to start an involuntary case. Debtors with 12 or more creditors require a petitioning group of three or more creditors holding the same amount. The second requirement is that the debtor is generally not paying its debts as they become due. When these requirements are met, an individual or business (farmers are the exception), can be compelled into bankruptcy.

Involuntary bankruptcies can be used strategically by creditors in certain situations. The most common is to initiate creditor protections afforded by the Bankruptcy Code, which apply equally whether a case is voluntary or involuntary. Creditor protections include stopping a debtor from paying select debts to the detriment of other creditors, and allowing preferential and fraudulent transfers, made pre-bankruptcy, to be reversed in certain situations. The ability to potentially remove incompetent or bad-acting management is another compelling creditor protection.

Another motive is control of venue. Bankruptcy law permits a proceeding to be commenced in various jurisdictions, including an entity’s state of formation. Thus, a corporation incorporated in Delaware may file bankruptcy there, even if its headquarters, operations and creditors are in Oklahoma. Such filings can increase costs for other interested parties located in Oklahoma. To prevent such a filing, a creditor may wish to commence an involuntary case in its preferred jurisdiction.

While involuntary bankruptcy can be an effective tool for a creditor, it is not without costs and risks. A debtor can challenge by arguing that the debts of the creditor are not valid or that the debtor has been paying on time. Resolution of these issues can require expensive litigation. These potential costs should be carefully considered when strategizing on whether an involuntary bankruptcy may be advisable.

Roth: The energy jobs debate

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


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

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

The energy jobs debate

This past week saw the release of the U.S. jobs report for April and its results of 160,000 new non-farm jobs, which was less than the expected 200,000. Worker pay did tick up 2.5 percent nationally, however, which may mean that employed Americans may have a bit more take-home pay to spend within the economy.

The U.S. unemployment rate remained at 5 percent (virtually half of what it was in May 2009), but if the labor market continues to soften, it’s now very likely that the Fed will not raise interest rates in June and perhaps only once in 2016 at the December meeting, after the presidential election.

Those of us who live in Oklahoma may be more acutely aware of the job market and the worry of a “soft” economy because as an energy state we’re seeing too many headlines lately about job layoffs. Yet, Oklahoma’s unemployment rate for March was slightly up to 4.4 percent, still below the national average, according to the Oklahoma Employment Security Commission.

But with many of our state’s economic eggs in the energy basket, worry is something we do, and we have learned from cycles now and in the past. The challenge remains to make sure our broader basket is growing and in more directions than one. And lucky for us, our Oklahoma energy mix is broader than most, with oil, gas, wind and solar options going forward for many decades to come.

A more difficult reality has hit other states like West Virginia and Kentucky, known for fewer energy options and mostly known for their Appalachia coal, which is experiencing historic declines due to its high sulfur content and environmental and health regulations.

The significance of that industry to those two states is why candidates for president are playing out the debate about energy jobs in the election foray. Recently candidate Hillary Clinton mentioned her commitment to developing a clean energy future and boasted about “putting a lot of coal miners out of work.” A tough comment for sure, especially for any of us empathetic to friends and colleagues out of work in today’s oil and gas patch. And so candidate Donald Trump pounced and at a large rally of 12,000 people in Charleston, West Virginia, a raucous crowd carrying large “Trump Digs Coal” signs cheered on the presumptive Republican nominee as he announced “We are going to get those mines open.”

But one must wonder how? And why? Does the candidate suggest reversing decades of Clean Air Act progress of removing toxic pollutants from the air so that coal has a growing market share again? He will need 60 senators to gut the law. And he might also need about 1,000 litigators (and 20 years) to defend the efforts from organizations like the American Lung Association, which has worked to reduce respiratory diseases by fighting for cleaner air, and the American Academy of Pediatrics, which has opposed coal plants’ mercury emissions because of the causal nexus with disease and health hazards for children.

But better health and environmental reasons aside, wouldn’t you think a candidate for president would be looking for ideas, policies and visions that moved the country forward, not back, and for which there may be wider public support of his or her energy positions?

For example, today there are more 150,000 American workers employed in the solar energy industry and growing. And the last time I looked, the sun shines over all 50 states.

In 2016, the American wind energy industry hit a new high, employing more than 88,000 American workers, and the DOE released a report recently suggesting the potential of 600,000 American jobs by 2050.

Now these numbers may seem large and they are certainly growing, but nothing compares to the 9.8 million jobs nationwide in the oil and gas industry, supporting about 8 percent of the entire gross domestic project. According to the American Petroleum Institute, 364,300 jobs in Oklahoma are supported by oil and gas, which may be good reason for the unease in our local economy today.

Whatever happens in our presidential politics this year, it’s my hope that America rallies to put the economy in drive, not reverse, and that our future energy development becomes the envy of the world. That’s what leadership can do. Please save the pandering for someone else.

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

Roth: A two-day workweek?

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on May 2, 2016.


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

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

A two-day workweek?

History and science tell us that a year is based upon Earth’s one full revolution around the sun and that months on the calendar were designed to measure the time between full moons, yet the seven-day week seems to be something left over from Babylonians’ belief in seven planets in the solar system.

Well, we now know that belief, albeit 4,000 years old, is not accurate, since we have eight recognized planets (sorry Pluto), yet the seven-day week continues.

I have often wondered how America (and the world) ended up with an established five-day workweek and a two-day weekend. I mean after all, if the economy stabilized on this 5-and-2 split, wouldn’t it just the same stabilize over time if there was a two-day workweek and a five-day weekend?

It wasn’t until early in the 20th century in America, in 1908, when an American mill became the first factory to offer a two-day weekend to accommodate both Jewish and Christian workers, forcing other factories to soon follow and a century later here we are.

Over the years, observers, sociologists and economists have predicted that advancements in technology would lead to Americans working shorter hours, perhaps even less days, which would lead to increased productivity, better health, superior performance and greater job satisfaction. Even visionaries such as Google co-founder Larry Page have suggested shorter workweeks would likely increase productivity, yet they and all the rest of us seem to be working longer hours than ever, with no change in sight.

However, due to very unfortunate circumstances impacting Venezuela and its crumbling economy, the drought-stricken country has just announced a two-day workweek and a five-day weekend for its public sector employees, which are apparently a third of the country’s workforce.

Daily blackouts at the country’s largest hydroelectric plant have seriously interrupted their fragile economy and led to energy rationing. Without electricity, factories are idled, food is spoiling and schools remain closed without lights. And there does not appear to be any relief in sight soon.

As El Nino weather brings historic rains and flooding to parts of the Northern Hemisphere, it has led to crippling droughts in the south. Water levels are dangerously low at the Guri Reservoir, the 11th-largest man-made lake in the world, which feeds the country’s Guri Power Plant, with over 10,200 megawatts of capacity. It’s the fourth-largest power station in the world and provides about two-thirds of the country’s power. To give us some point of reference, in Oklahoma if you combined the state’s two largest public utilities (OG&E at approximately 6,000 MWs and PSO at approximately 4,500 MWs), this one power station is comparable to all of these utilities’ power plants, combined.

So while crisis has caused the implementation of scheduled rolling blackouts, four hours a day in much of the country, public sector employees will be experiencing five-day weekends until the energy and economic crises subsides. Whether that proves to increase productivity, as some economists suggested a century ago, is an open question.

For now, it’s a sad reality, made worse by government leaders who haven’t moved to diversify their energy economy, considering they have enormous potential for wind energy (estimated to exceed 10,000 MWs) and the country famously sits on the world’s largest proven oil reserves, totaling 297 billion barrels as of 2014.

Perhaps Oklahoma’s budget crisis pales in comparison to the conditions in Venezuela, but there is no time like the present to make sure our state’s economy makes the most to develop our wind and solar energy potentials, in addition to growing reliable demand for our native oil and natural gas.

But then again, I’ve always been curious about whether a five-day weekend could “work” in America.

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

Roth: Deaths in the oil patch from exposure to fumes

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 11, 2016.


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

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

Deaths in the oil patch from exposure to fumes

When I first joined the Oklahoma Corporation Commission years ago, the agency’s many talented Oil and Gas Division employees and inspectors taught me a lot about the issues in the field.

One new lesson that was a shock to learn was about the enormous dangers of deadly hydrogen sulfide in and around tank batteries, where oil and gas is collected from nearby wells. This killer gas is deadly in small amounts and it can stop a person’s breathing in seconds, rendering them unconscious or dead without much warning. In fact, as the concentration increases it apparently deadens a person’s sense of smell, rendering them unable to even detect the danger.

Since 2010, at least nine workers have died from exposure to hazardous gas vapors on oil production and storage tanks. These workers were alone, usually in the middle of the night, and were later found dead near an opening on top of the tanks. There seemed to be a pattern going unnoticed, and Mike Soraghan, a reporter for Energy Wire, sought to reveal it.

Five of the deceased workers were collecting fluid samples, and the remaining four were manually measuring production levels. To perform both of these tasks, workers had to climb ladders to access so-called “thief hatches” on top of the tanks. Once the hatch is opened, gas vapors that have built up in the tank rush out of the hatch. These vapors greatly displace oxygen in the air surrounding the hatch that can asphyxiate a person in a matter of seconds.

What makes these deaths even more tragic is that they were completely avoidable. There are ways to perform these tasks automatically without exposing workers to these toxic vapors. Unfortunately, the cost of installing the necessary equipment has caused many operators to continue using these dangerous methods.

Another problem is that safer practices cannot be employed on federally owned land due to outdated government agency rules. On federal and tribal leases, strict federal regulations allow only two methods of measurement: Lease Automatic Custody Transfer or manual measurement. LACT is the only automated method of measurement currently allowed on federal land. Because this system is so expensive, the vast majority of storage tanks on federal land are still checked manually.

The Bureau of Land Management is finally revising its rule regarding storage tank measurement, which has not been updated since 1989. However, the proposed new rule adds only one additional automatic measuring method. This additional method is also expensive, which will still prevent smaller operators who cannot afford the necessary equipment from upgrading their storage tanks.

Many of the incidents were reported as deaths from natural causes, such as cardiac arrest. Some were even attributed to the workers attempting to get high off of the fumes. Initially, the Occupational Safety and Health Administration did not find any safety violations where these nine workers died. But OSHA has now recognized the risks involved in manually measuring and sampling fluids in storage tanks. In February, it issued an alert warning operators and workers of these risks. Let’s pray these warnings help save lives.

If interested, you can also find out more on National Public Radio’s website at www.npr.org/sections/health-shots/2016/03/30/472341181/mysterious-death-uncovers-risk-in-federal-oil-field-rules and to learn ideas for avoiding the exposure risks, please check out Inside Energy at insideenergy.org/2016/03/03/what-workers-need-to-know-about-oilfield-gas-exposure.

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

What effect does bankruptcy have on oil and gas leases?

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on Mar. 31, 2016.


Melissa R. Gardner is a Director who represents both privately-owned and public companies in a wide variety of oil and gas matters, with a strong emphasis on oil and gas title examination.

By Phillips Murrah Director Melissa R. Gardner

It is an understatement to say these are trying times in the oil and gas industry.

There are multiple reports in the news that predict we have not hit bottom and that our state will be uniquely affected. While oil and gas companies, contractors and service companies have industry insiders to rely on, many individual mineral owners might find themselves without resources or direction, wondering what effect these proceedings will have on the benefits they’ve come to expect under oil and gas leases.

Here’s some helpful information for those who have executed these leases, who are faced with persistent negative news about the companies holding the leases.

It is important to note that, if a company is considering bankruptcy, it could take various forms. Chapter 7 and Chapter 11 are the two most common types of business bankruptcy.

In the first, business typically ceases and a trustee takes control of all assets, including the business’s oil and gas leases, with any eye toward liquidation. However, in Chapter 11 bankruptcy proceedings, the company generally remains in control of its assets and develops a plan of reorganization, often with the goal of remaining in business after its debts are restructured. While Chapter 11 may be ultimately more favorable to the mineral owners, one can take comfort that current payments and leases are not necessarily in jeopardy in either case.

In a bankruptcy proceeding, the bankruptcy trustee or Chapter 11 debtor in possession is only ultimately entitled to property of the bankruptcy debtor, which generally would not include royalties payable to mineral owners. Likewise, in Oklahoma, oil and gas leases typically survive the bankruptcy. This means royalty payments frequently continue, virtually uninterrupted, after a bankruptcy case has been filed and the leases may continue to be developed for the benefit of all notwithstanding the bankruptcy.

Obviously, this downturn has been difficult for many in our state. Hopefully, these facts will provide a mineral owner with some comfort that, even in these times, the payments they have come to rely on under existing oil and gas leases will not automatically be affected adversely by a leaseholder’s bankruptcy. It’s certainly worth investigating more before you assume these benefits will disappear.

Roth: Wind energy essential to Oklahoma’s energy mix, economy

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 21, 2016.


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

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

Wind energy essential to Oklahoma’s energy mix, economy

Wind energy is vital to Oklahoma’s energy mix and economy. In addition to providing 17 percent of the electricity powering our state, the wind energy industry has invested billions in our communities through capital projects, jobs, taxes, landowner payments and contributions.

Recently, a small faction of renewable energy opponents has spread inaccurate, inconsistent and misleading information at the Capitol and among Oklahomans. It’s time we hold this group accountable by dispelling myths and sharing facts about wind energy and its contributions to our state. Wind energy companies have invested nearly $10 billion in Oklahoma electricity-producing facilities in the last decade-and-a-half.

Wind energy companies contribute tens of millions of dollars annually in taxes, including those that support Oklahoma schools, and pay more than $11 million each year to Oklahoma landowners through land lease payments. Economists estimate that owners of wind energy projects will pay more than $1 billion in ad valorem taxes from 2003-2043, providing significant funding for our schools and career technology centers.

As our state leaders face budget challenges, there’s been much conversation about the wind industry’s one remaining tax incentive. At the end of 2016, there will be only one tax credit remaining for companies that produce electricity using zero-emissions facilities in our state, including wind, solar, hydropower and geothermal energy. This tax credit directly benefits customers, as wind is currently Oklahomans’ cheapest form of electricity. And that cost savings in our utility bills benefits every single Oklahoman.

In light of our state’s budget issues, we should actively encourage wind developers and others to invest in Oklahoma versus taking their jobs, tax dollars and land lease payments elsewhere, like Kansas or Texas.

Gov. Mary Fallin and other pro-Oklahoma leaders have emphasized the importance of not only nurturing growth of businesses within Oklahoma, but also bringing out-of-state investment here. The wind energy industry is a textbook example of attracting dollars into the state that contribute to the success of Oklahoma businesses, such as construction, manufacturing and more. These are dollars that in the future could be invested elsewhere.

A diverse economy and energy supply is good for our state, communities, schools and citizens. And that’s especially true when some energy sectors are struggling because of global pressures like oversupply of world oil. Ask your legislator to support wind energy, a crucial part of Oklahoma’s long-term economic health and diverse energy mix.

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

Bankruptcy as a backdrop

Clay Ketter’s guest column, Gavel to Gavel, originally published in The Journal Record on February 18, 2016.
View Clay Ketter’s attorney profile here.


Clayton D. Ketter is 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.

Clayton D. Ketter is 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.

Chesapeake Energy’s stock price took a hit last week after news outlets reported that it retained Kirkland & Ellis, widely recognized as one of the nation’s top corporate bankruptcy law firms. Chesapeake was quick to issue a press release stating that it has no plans to pursue bankruptcy, which led to a small rebound in its stock price.

People may wonder why a company with no plans to file bankruptcy would hire an experienced bankruptcy law firm. The answer is likely prudence; the company wants to be fully informed about available options.

When companies detect potential financial trouble, it is not unusual for them to retain a law firm’s restructuring specialists to assist in assessing the situation and weighing alternatives for resolving the issue in the best possible way. That may not include filing for bankruptcy protection, but, rather, simply help in restructuring debt obligations.

When a company experiences financial stress, there is value in thoroughly preparing a well-thought-out plan to address the problem, which often involves developing a bankruptcy strategy as a point of reference and being prepared to file, if appropriate. With a bankruptcy scenario as a backdrop, a company and its restructuring advisers typically attempt to work with the company’s creditors to restructure their agreements in a manner more favorable to the creditor than they might receive in bankruptcy. Ideally, this would allow the company to get back on the right financial track and, ultimately, to make things right with its creditors without a bankruptcy filing.

Creditors of large corporations, usually sophisticated financial institutions, will be aware that restructuring specialists are prepared to put the company into bankruptcy for its protection should an alternative agreement not be reached. However, bankruptcy can be a disruptive, risky process that does not always yield the best outcome for either side. Risks on one side include company ownership being transferred to the creditors, and on the other, the creditors’ recoveries being less than what they might have recovered in the absence of a bankruptcy.

Thus, bankruptcy considerations often educate and motivate both sides to work together to find an out-of-court solution to their debt issues and, thereby, avoid bankruptcy altogether.

However, in situations where parties are unable to come to terms, the due diligence done by the company and its restructuring advisers can be used to take appropriate action to protect the company and its interests.

Roth: China’s slowing economy and its impact on global energy

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 1, 2016.


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

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

China’s slowing economy and its impact on global energy

As China “rebalances” its economy, shifting away from manufacturing and exports to consumption and services, its energy demand continues to plummet.

In a recent report, the International Monetary Fund indicates that several factors are contributing to the sharp decline in growth and demand in China, including: the aging workforce and higher life expectancy, the slowing of technological advancements, and declining productivity. Others cite the declining workforce participation and tax base as young, working-age individuals pursue higher education instead of entering labor markets, as well as a shrinking middle class as the wage gap continues to expand.

Part of the problem is China’s economic structure: It is driven by exports, as opposed to being dependent on domestic consumption. This becomes a problem when advanced economies, such as the United States, experience economic downturns that curb growth and demand. Some economists predict slow U.S. growth over the next several decades due to the aging population, increased student debt, and increased income inequality. This will cause U.S. imports to decline, which will in turn negatively impact China’s export-centric economy.

Another major factor causing reduced demand in China – especially its demand for fossil fuels – is China’s shift in energy policy. China is taking action to combat climate change. President Xi Jinping has announced that China will implement a nationwide cap and trade system in 2017.

China is a global leader in wind power, adding 19.8 gigawatts of wind turbines to its grid in 2014 alone, and it added more solar panels than any other country that same year. The expansion of renewables in China has led to increased competition for fossil fuels, which has contributed to the sharp decline in demand for conventional energy.

Both China’s change in economic policy and its clean energy strategy have affected global energy markets and caused coal-boom towns, such as Yulin, to turn into so-called “ghost cities.”

China’s shift away from coal to gas and renewables has contributed to the sharp drop in coal prices in recent years. Thermal coal prices have fallen about 60 percent from a 2011 peak, and Brent oil prices have fallen approximately 75 percent over the same time frame.

The demand for oil in China has dropped dramatically, partially due to its improved consumption efficiency. A 2015 study showed that “oil demand (in China) grew about 0.69 percent for every 1 percent of GDP growth in 2014, which is significantly lower oil intensity than the 0.94 percent ratio that prevailed ten years ago.”

China’s demand for natural gas has also slowed down, which has been caused, in part, by government-regulated pricing. As global oil prices continue to drop, both oil and coal have become cheaper alternatives to natural gas. While China’s natural gas consumption had been increasing at rates in the double digits since 2000, its increase in gas consumption was only about 3 percent in 2015. This data shows that even clean technologies like natural gas are not immune to the overall drop in energy demand in China.

One positive result from China’s shift to clean technologies is that it is providing significant opportunities for private investment and innovation. For example, Apple Inc. announced that it will invest millions of dollars to build over 200 megawatts of solar capacity in China. Many diplomats and conservationists, such as former Treasury Secretary Henry Paulson, believe that China is in a unique position to lead the world in sustainable development. They see the U.S. playing a key role in advancing technology to meet China’s growing – albeit slower than expected – energy demand. There is still American opportunity in a slowing global economy.

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

Jim Roth: Congress extends tax incentives for clean energy development

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 11, 2016.


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

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

Congress extends tax incentives for clean energy development

Just before the holiday break, President Obama signed the Consolidated and Further Continuing Appropriations Act into law, which – among other things – extended tax credits for wind and solar energy development for another five years.

This is critical for the renewable energy industry because this long-term extension provides certainty that will stimulate further investment in clean energy technologies.

The tax credits for clean energy development started with the Energy Policy Act of 2005 and the Energy Improvement and Extension Act of 2008. For many years, Congress only passed temporary extensions to these credits, which caused clean energy financial markets to be unstable.

Notwithstanding this volatility, there has still been significant investment in wind and solar technologies during the past decade. Since the inception of these tax incentives, the price per megawatt-hour has dropped more than 60 percent for utility-scale wind and more than 80 percent for utility-scale solar. These dramatic reductions in cost for wind and solar power are largely attributable to the increased investment in clean energy following the passage of these tax credits.

As implementation and utilization of wind and solar energy systems continues to expand, the unsubsidized price for renewable energy will continue to drop. The cost for utility-scale wind and solar is already low enough to compete with fossil fuels, and utilities are beginning to turn to renewables for energy generation. With these long-term tax incentives now in place, investment in clean technologies will continue to rise and the cost for clean energy will continue to fall.

The newfound stability and investor confidence is evidenced by the recent activity in financial markets. Now that there is a definitive term and phase-out for the clean energy tax credits, stock prices for many solar and wind companies have soared. SolarCity, the largest home solar company in the U.S., saw its share price increase by more than 30 percent after the tax credits were extended.

These tax incentives will lead to additional U.S. jobs through increased investment in, and expansion of, wind and solar energy systems. According to Bloomberg New Energy Finance, these credits will add nearly 40 gigawatts of solar and wind energy in the U.S., which is enough to power 8 million homes.

Projects to improve renewable energy infrastructure and increase capacity will employ thousands of Americans across the country. An ancillary benefit of this long-term extension is that developers will no longer be rushed to commence construction in order to qualify for the tax credits before they expire each year. This will reduce the strain on resources for the construction of wind and solar systems and, ultimately, bring down the cost to build and utilize these systems.

Finally, the tax credits will also help the U.S. meet its clean energy and emissions goals, as set forth in the Clean Power Plan and the COP21 Agreement. By using the tax system to incentivize private investment in clean energy, the government is encouraging innovation that will help the U.S. secure its energy future and remain a global leader in the development of clean energy technologies.

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

2015 tax extenders – a PATH forward

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on Jan. 7, 2016.


Robert O. O’Bannon is a Director who represents business clients in a variety of transactional matters with an emphasis on taxation and wealth planning issues for both businesses and individuals.

By Phillips Murrah Director Robert O. O’Bannon

On Dec. 18, President Obama signed into law a package of tax extenders called “The Protecting Americans from Tax Hikes Act of 2015,” or PATH.

Tax extenders are nothing new. Historically, as tax provisions expire, extenders are put forward to temporarily keep them active. This helped extend the provisions, but it did nothing to develop the kind of certainty that many in the business community want when planning for the future. The real breakthrough for PATH is that some of the tax extenders are made permanent, including those that benefit individuals as well as businesses.

For example, for businesses, there are enhancements and permanent extensions to the Research and Development Tax Credit; the Code Sec. 179 expensing limitation of $500,000, and the $2 million phase-out limit, are retroactively and permanently extended, and both are indexed for inflation for tax years beginning this year; and Bonus Depreciation, which allows retailers and restaurants to initially depreciate half of remodeling and improvement fees. For individuals, the Child Tax Credit, American Opportunity Tax Credit and the Earned Income Tax Credit are all strengthened and made permanent.

Another breakthrough for the PATH Act is in the bipartisanship it achieved. Republicans achieved supply-side expansion that favors business and growth and Democrats enhanced and made permanent tax laws that more directly favor individuals. On both sides of the aisle, PATH turned out to be a nice Christmas present.

Moving forward into 2016, here are some other items to keep in mind about the PATH Act:

  • A deduction for state and local general sales tax in lieu of state income tax is retroactively extended and made permanent.
  • Individuals at least 70 1/2 years of age may now exclude from gross income qualified charitable distributions from IRAs of up to $100,000 per year.
  • The New Markets tax credit is extended through 2019 and the carryover period for unused new markets tax credits is extended for an additional five years, to 2024.
  • The tax credit for new, energy-efficient homes built by a contractor and acquired for a residence in the tax year is retroactively extended for two years to 2017.

Jim Roth: A breath of fresh air, finally

By Jim Roth, Director and Chair of the Firm’s Clean Energy Practice Group. This column was originally published in The Journal Record on Dec. 31, 2015.


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

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

A breath of fresh air, finally

The percentage of children in the U.S. with asthma is leveling off, and even finally declining in certain demographics, according to a government study published in the journal Pediatrics this week. Asthma affects a child’s life in many ways, including limiting the child’s physical stamina, keeping the child from participating in certain activities, and – if an asthma attack is severe enough – causing hospitalization and even death.

The precise cause of the decline in childhood asthma is unknown, but experts state that many factors may be contributing to this change. Improved air quality is one such obvious factor. The energy sector has helped improve air quality as energy generation continues to shift away from coal to cleaner-burning natural gas and various forms of renewable energy. Coal has long been the predominant fuel source for energy generation in the U.S. and abroad because it is technologically simple to extract and easy to transport, which has kept coal prices low for utilities to purchase for energy generation. Unfortunately, coal is the dirtiest, most carbon-intense fuel source, and burning coal is also a leading cause of smog, acid rain, and toxic air pollution. Many of these external effects, like air pollution in the forms of sulfur dioxide, nitrogen oxides, particulate matter and mercury, cause real health issues, especially for those in closer proximity to coal plants.

Utilities are turning to natural gas to fuel energy generation for two reasons: the low price of natural gas and heightened air quality regulations. Natural gas prices have dropped dramatically in recent years due, in part, to enhanced recovery technologies in shale gas production. Concerns about health impacts and climate change have influenced domestic and global policies on air quality and emissions standards such as the Clean Power Plan and the recent Paris Agreement. Renewable energy generation from wind and solar sources is also at record levels and its increase has helped lower the overall pollution profile from the power sector across our country. These changes in policy and energy generation are great for the environment and our citizens’ health, and they have likely contributed to the decline in childhood asthma and other air quality related health issues. The coal industry, however, is suffering as a result.

One indicator of the coal industry’s struggle is its poor performance in the stock market. Since 2011, the stock prices of publicly traded coal companies have sharply declined. For example, Peabody Energy – the world’s largest private coal company – was trading for over $70 per share in 2011, but now it is trading for about $8 per share. Another indicator is the decline in the coal industry’s share as a fuel source for energy generation. Over the past five years, the percentage of energy generation produced by coal across America has declined from 50 percent to approximately 40 percent, and this decline is largely attributable to the increased competition in the energy generation market from natural gas and renewables. Finally, perhaps the most significant indicator of the turmoil in the coal industry is the number of companies that are closing their doors. A recent report indicates that 26 U.S. coal companies have declared bankruptcy. According to the Department of Labor, employment is down 24 percent in the coal industry since 2011, which equates to approximately 21,000 jobs.

While these figures are certainly bad for the coal industry, cleaner fuel sources lead to better air quality and improve public health. Shifting away from coal-fired energy generation to cleaner energy solutions is one way the U.S. can improve the health of its citizens, extend life expectancies and rid children and families from life-limiting threats like asthma and other respiratory disease.

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

ACA compliance deadline near

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on Nov. 19, 2015.


Catherine L. Campbell is a versatile and experienced appellate attorney whose practice is focused on commercial litigation and labor and employment matters.

By Phillips Murrah Director Catherine Campbell

The time is upon us when certain business employers must comply with the Affordable Care Act, or ACA. Starting on Jan. 1, along with businesses with 100 or more employees, companies with 50 to 99 employees are required to offer affordable insurance to qualified employees and their dependents.

But that is not all. The ACA requires applicable large employers, or ALEs, to provide employees, by Jan. 31, a summary of the health care they offer (Internal Revenue Service form 1095-C), and, later, to provide that summary to the IRS (IRS form 1094-C). Together these forms tell the IRS information it will use to determine whether ALEs are affording ACA-mandated coverage, employees are eligible for health care exchange subsidies, and the coverage offered satisfies the ACA individual mandate.

Consider the following as the deadline approaches:

• Are you an applicable large employer?

Applicable large employer companies are employers with 50 or more full-time employees. Determining the number of full-time-equivalent employees can be tricky. For instance, if a company that employs less than 50 full-time employees is a subsidiary of a larger organization, the subsidiary could fall into the ALE category.

• Who are full-time employees?

The ACA defines a full-time employee as one who averages 30 or more hours per week, or at least 130 hours in a month including hours worked, and paid off-time (vacation, sick leave, and paid holiday hours).

• Payroll: If an employee is responsible for a portion of the cost of health care, companies must submit information sufficient to allow a determination that the provided health care is affordable to the employee. To avoid penalties, an employer must insure that premium payments by employees do not exceed a certain percentage of their wages.

The good news? After implementing procedures to capture and report the required information, future compliance should be less burdensome. The process will be similar to submitting W-2 forms.

As with other IRS requirements, there are many complex extenuating considerations. To ensure proper compliance, check with your adviser to make sure you are aware of all the details that apply to your specific circumstances.

Taxing behavior

Gavel to Gavel appears in The Journal Record. This column was originally published in The Journal Record on Oct. 8, 2015.


Dawn M. Rahme represents individuals and businesses in an array of transactional matters. The focus of her practice is assisting corporations, partnerships and individuals in general tax planning.

Dawn M. Rahme represents individuals and businesses in an array of transactional matters. The focus of her practice is assisting corporations, partnerships and individuals in general tax planning.

By Phillips Murrah Director Dawn Rahme

Generally, people think of taxes as money that governments charge citizens in order to facilitate infrastructure. However, in many cases, governments also use the tax system to modify behavior by using the power of the purse.

Behavior is undoubtedly affected by the tax code. For example, when Congress increases the expense deduction for businesses, it encourages businesses to spend money through equipment purchases or other qualifying expenditures. When they allow for charitable deductions, it encourages giving to qualified organizations.

Oklahoma also offers a variety of tax incentives, including the Quality Jobs Program and the Oklahoma Film Act, which offer credits and rebates to make Oklahoma more attractive to those deciding where to do business.

On the flip side, behavior can also be discouraged by the tax code. Some excise taxes are imposed on items deemed unhealthy, commonly referred to as sin taxes. For example, Oklahoma levies an additional tax on tobacco products, including cigarettes. The intent is to discourage tobacco use with the implication of having an overall effect on health care. Additionally, according to Bloomberg, Oklahoma sin tax revenue has risen about 200 percent in the past decade.

Some argue that sin taxes are regressive, or that they have a disproportionately higher burden on the poor because they spend a larger share of their income on consumption. However, in the case of luxury taxes, or taxes on products or services that are deemed to be unnecessary or nonessential, it can be difficult to make the argument regressive taxes affect only lower tax brackets.

There are some rather notorious examples of efforts to influence behavior, including a poorly conceived idea in Dallas to place a 5-cent fee on disposable plastic grocery store bags. The tax passed, only to be repealed six months later. And who can forget New York City’s failed effort to ban sugary drinks from being sold in containers larger than 16 ounces? Although their efforts failed, the city of Berkley, California, was able to pass a 1-cent-per-ounce tax on soft drinks.

The next time you are making a purchase, it may be an interesting exercise to ask yourself how much of an influence taxes have on your decision.