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The law that protects oil, gas companies from price-gouging regulations

On Behalf of | Jan 26, 2024 | Oil & Gas Law

Most winter storms don’t get names, but Winter Storm Uri hit Oklahoma and other states in February 2021 with a ferocity that warranted one. Hundreds of people died, and damages were estimated at over $200 billion. As ice and snow blanketed the region, Oklahomans saw their gas bills skyrocket. When natural gas prices hit a historic high, charges of price gouging soon followed.

Some might wonder why less than three years after this, Oklahoma lawmakers passed legislation by an overwhelming margin that exempts natural gas companies from the state’s anti-price gouging regulations and why Gov. Kevin Stitt quietly signed the legislation into law last year. The law lets natural gas companies raise their prices even during a state of emergency as long as the increase is necessary due to national or global market price increases.

Lawmaker blames “commodity market increase” for price rise during Uri

One of the legislators who introduced the bill said the natural gas industry wasn’t to blame for price increases during Winter Storm Uri because it was just passing on the market changes it was dealing with. He said, “This is not the guy down the block increasing his gas, but an actual commodity market increase just like we’ve seen throughout the country.”

Some lawmakers expressed concern that such a law would stifle investigations into price gouging. Yet, Kansas Attorney General filed a lawsuit against one Texas-based gas supplier for raising its prices during the storm, so it seems that legal action will remain warranted under specific circumstances.

“Oklahoma’s oil and gas industry is not the culprit”

Oklahoma’s Attorney General Gentner Drummond has announced that he’s considering legal action, but not against the state’s oil and gas companies. He said, “While we are not yet prepared to name potential defendants, it is important to understand that Oklahoma’s oil and gas industry is not the culprit.”

The AG is reportedly looking at natural gas marketers. He said, “I discovered that several companies reaped billions of dollars at the expense of businesses and individuals who were suffering from the crippling effects of the storm. The magnitude of this scheme is staggering and unconscionable.”

The decisions made by state leaders around investigations and legal actions are largely dependent on who’s in those positions. That’s why businesses should never let their guard down. If you’re being investigated or anticipating legal action, it’s always wise to be proactive. Seeking experienced legal guidance available when you need it is always important.