PINEDALE – Sitting inside the Pinedale Library’s Lovatt Room, a section of a building in a county largely built upon the oil and natural gas sector, the Sublette County Board of Commissioners heard a request from one of its largest backyard energy titans to receive an exemption from a monthly tax payment schedule, as enabled by Senate File 60, which passed the Wyoming Legislature last month.
Paul Ulrich, vice president of Jonah Energy, made the company’s pitch to the commissioners for an exemption. He said Jonah Energy has analyzed Wyoming data in recent years. He brought up House Bill 158, a bill introduced a few years ago, which was meant to put protection measures in place for counties that were experiencing delinquent tax issues. That bill passed and one of the concepts out of that bill that gained traction was switching tax payments to monthly in order to lessen the impact of a company went bankrupt or closed its doors.
“Jonah Energy objected to that bill, not because we don’t want to pay our taxes, but because we don’t believe it fixed the problem,” Ulrich said. “I’m telling you today I still don’t believe House Bill 158 or Senate File 60 fix your problem. If somebody is unwilling, whether it is an operator, private individual, small business or large business to pay their taxes, they’re unwilling to pay their taxes.”
Ulrich pitched the commissioners on a full evaluation of the monthly payment schedule to determine if it was best for Sublette County. He said that’s all he was pitching with the exemption was to determine if that was the best course forward for all those involved.
Ulrich said if Jonah Energy switched to monthly it would effectively require the company to set aside $21 million in its books for years so that money can’t be used for production and development.
Based upon previous production numbers, Ulrich said it would cost Sublette County and Wyoming about $9 million. And Jonah Energy has one of the few rigs currently drilling, he added.
“We’re not asking for a tax break or anything special,” Ulrich told the commissioners. “We’re asking for a full evaluation of keeping our tax schedule the same based on the negative ramifications for us, in not having that money for capital, and you, not receiving those tax benefits from those capital investments.”
County treasurer Emily Paravicini addressed the board before Ulrich and suggested the commissioners deny the exemption on the grounds that there isn’t enough time to put together a system that could be used across other counties. She said it’s more important to have something standard across the state rather than individual counties have their own separate systems. That way if a company is in multiple counties and has to jump through different hoops for each, it becomes mess and unnecessary, Paravicini said.
“So that it’s the same everywhere and we have everybody’s interests protected,” she said. “Not only our county and our county constituents, but all the different entities we distribute to and our produces so that they know that this is in their best interest also.”
Deputy county attorney Clayton Melinkovich said he’s already heard from other counties who would be interested in duplicating Sublette’s potential exemption for energy companies.
Commissioner Joel Bousman expressed his concern to address a NOVC in this situation, which Ulrich said Jonah Energy is willing to look at. Commissioner Sam White, a longtime energy sector worker himself, asked about payments off contracts that Jonah Energy enter into with entities that purchase energy from Jonah. Ulrich said that was beyond him. White said he didn’t have a problem doing an evaluation but he did have worries with inflation and previous bankruptcies by energy entities in Sublette County. Commissioner Doug Vickrey asked about a ballpark figure, which Ulrich put at $1.75 million each month under the SF 60 payment schedule.
Ultimately, the board agreed with Jonah Energy to undergo a full evaluation with a collaborative group including two commissioners, Paravicini, Melinkovich and county administrator Matt Gaffney. That group would begin consulting outside parties, like the state Department of Revenue, as needed.
Also during the meeting: