EDMONDSON, J.
T1 Apache Corporation, a producer of oil and gas, purchased equipment and other items that it used at its wells to produce oil, gas, and related hydrocarbons. Apache Corporation (Apache) claims that: (1) It paid sales taxes on these purchases; (2) A sales tax exemption is provided to manufacturers; and (8) Apache is a manufacturer and entitled to a refund from the Tax Commission for the these purchases. Specifically, Apache claims that gas compression, dehydration, and other processes occurring at the wellhead amount to a manufacturing process, and any expenditures made as a manufacturing process are entitled to be exempt from a sales tax. The Tax Commission claims that field processing is not "processing" in a manufacturing sense, and that Apache is not entitled to any refund.
12 Apache's request for refund relates to purchases made between March 1, 1997 and February 29, 2000. The refund was divided into two amounts, $439,506.77 attributable to purchases made before November 1, 1998, and $329,269.63 attributable to purchases made on or after November 1, 1998. The relevant statutes were amended effective November 1, 1998. They were also amended in 2008.
13 In Dolese Bros. v. State ex rel. Oklahoma Tax Commission, 2003 OK 4, 64 P.3d 1093, we explained that, "[als a general rule, statutes and statutory amendments will be construed as operating prospectively unless by express declaration or necessary implication from the language used the Legislature clearly demonstrates a contrary intent." Id. 2003 OK 4 at ¶ 8, 64 P.3d at 1097. Nothing before us suggests that the 1998 and 2003 amendments apply to all of Apache's sales taxes paid between 1997 and 2000. We must therefore examine Apache's refund in light of the 1997 and 1998 versions of the Oklahoma Sales Tax Code as they apply to taxes paid when each version was in effect.1 We first apply the 1998 statutes.
f 4 Apache claimed the sales tax exemption provided for the "[slales of goods, wares, merehandise, tangible personal property, machinery and equipment to a manufacturer for use in a manufacturing operation." 68 O.S.Supp.1998 § 1359(1). Apache sought an exemption based upon its alleged status as a [1063]*1063manufacturer. The Tax Commission first claimed that Apache did not follow the proper procedure for obtaining this exemption.
{5 In 1998 a new statute was created, 68 O.S.Supp.1998 § 1859.2, and it requires a manufacturer to obtain a "manufacturer exemption permit" to "qualify for the exemption authorized in paragraph 1 of section 1359. ..."
A. In order to qualify for the exemption authorized in paragraph 1 of Section 1359 of Title 68 of the Oklahoma Statutes, at the time of sale, the person to whom the sale is made, provided the purchaser is a resident of this state, shall be required to furnish the vendor proof of eligibility for the exemption as required by this section. All vendors shall honor the proof of eligibility for sales tax exemption as authorized under this section, and sales to a person providing such proof shall be exempt from the tax levied by Section 1850 et seq. of Title 68 of the Oklahoma Statutes.
B. Each resident monufacturer wishing to claim the exemption authorized in paragraph 1 of Section 1359 of Title 68 of the Oklahoma Statutes shall be required to secure from the Oklahoma Tax Commission a manufacturer exemption permit, the size and design of which shall be prescribed by the Tax Commission. This permit shall constitute proof of eligibility for the exemption provided in paragraph 1 of Section 1859 of Title 68 of the Oklahoma Statutes. Each such manufacturer shall file with the Tax Commission an application for an exemption permit, setting forth such information as the Tax Commission may require. The application shall be signed by the owner of the business or representative of the business entity and as a natural person, and, in the case of a corporation, as a legally constituted officer thereof.
68 O.S.Supp.1998 § 1859.2(A) & (B), (emphasis added).
16 Apache argues that it should not be required to obtain a permit because it learned during this litigation that even if it had timely sought a permit, the Tax Commission would have denied its application. Apache did apply for an exemption permit on April 18, 2000, several days after the period for which it seeks a refund. The record clearly shows that Apache's application for a permit would have been denied. Apache's argument assumes that the permit is part of an administrative remedy to obtain the manufacturer's exemption. The Tax Commission asserts that Apache's failure to obtain, or least attempt to obtain, the permit bars the exemption for a refund of taxes paid on or after November 1, 1998.
17 Exhaustion of administrative remedies is not required when those remedies are inadequate, ineffective or unavailable. Dewey v. State ex rel. Oklahoma Firefighters Pension and Retirement System, 2001 OK 40, ¶ 14, 28 P.3d 539, 546; McCarthy v. Madigan, 503 U.S. 140, 146-149, 112 S.Ct. 1081, 117 L.Ed.2d 291 (1992). We have explained the inadequacy, insufficiency, or futility of an administrative remedy when that remedy did not provide the parties with an opportunity to fairly present all claims and have them adjudicated. Lone Star Helicopters, Inc. v. State, 1990 OK 111, 800 P.2d 235, 237 (agency had no authority to adjudicate breach-of-contract claim); Walker v. Group Health Services, Inc., 2001 OK 2, ¶ 39, 37 P.3d 749, 762 (Board could not award damages for bad faith breach of an insurance contract). Cf. Montana National Bank of Billings v. Yellowstone County, 276 U.S. 499, 505, 48 S.Ct. 331, 333, 72 L.Ed. 673 (1928), (taxpayer seeking refund was not required to exhaust where tax entity was powerless to grant any appropriate relief).
T8 Apache asks that our definition of an "ineffective remedy" include circumstances where a party would have been unsuccessful in an administrative proceeding. Some courts have stated that certainty of an adverse administrative decision may make exhaustion futile UDC Chairs Chapter, American Ass'n of University Professors v. Board of Trustees of University of District of Columbia, 56 F.3d 1469, 1475 (D.C.Cir.1995); Randolph-Sheppard Vendors of America v. Weinberger, 795 F.2d 90, 105, (D.0.Cir.1986). However, the mere likelihood of an adverse decision is not sufficient to excuse a failure to exhaust. Marine Mammal Conservancy, Inc. v. Department of Agriculture, 134 F.3d 409, 413 (D.C.Cir.1998).
T9 We applied this exception to the exhaustion doctrine in Bankoff v. Board of [1064]*1064Adjustment of Wagoner County, 1994 OK 58, 875 P.2d 1138, where we said that a party was not required to seek a zoning variance when it had previously been denied a conditional use permit. We explained that the law does not require one to do a vain or useless thing or to perform an unnecessary act to obtain relief. Id. 1994 OK 58, at n. 9, 875 P.2d at 1143. Cf. Orion Corp. v. State, 103 Wash.2d 441,
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EDMONDSON, J.
T1 Apache Corporation, a producer of oil and gas, purchased equipment and other items that it used at its wells to produce oil, gas, and related hydrocarbons. Apache Corporation (Apache) claims that: (1) It paid sales taxes on these purchases; (2) A sales tax exemption is provided to manufacturers; and (8) Apache is a manufacturer and entitled to a refund from the Tax Commission for the these purchases. Specifically, Apache claims that gas compression, dehydration, and other processes occurring at the wellhead amount to a manufacturing process, and any expenditures made as a manufacturing process are entitled to be exempt from a sales tax. The Tax Commission claims that field processing is not "processing" in a manufacturing sense, and that Apache is not entitled to any refund.
12 Apache's request for refund relates to purchases made between March 1, 1997 and February 29, 2000. The refund was divided into two amounts, $439,506.77 attributable to purchases made before November 1, 1998, and $329,269.63 attributable to purchases made on or after November 1, 1998. The relevant statutes were amended effective November 1, 1998. They were also amended in 2008.
13 In Dolese Bros. v. State ex rel. Oklahoma Tax Commission, 2003 OK 4, 64 P.3d 1093, we explained that, "[als a general rule, statutes and statutory amendments will be construed as operating prospectively unless by express declaration or necessary implication from the language used the Legislature clearly demonstrates a contrary intent." Id. 2003 OK 4 at ¶ 8, 64 P.3d at 1097. Nothing before us suggests that the 1998 and 2003 amendments apply to all of Apache's sales taxes paid between 1997 and 2000. We must therefore examine Apache's refund in light of the 1997 and 1998 versions of the Oklahoma Sales Tax Code as they apply to taxes paid when each version was in effect.1 We first apply the 1998 statutes.
f 4 Apache claimed the sales tax exemption provided for the "[slales of goods, wares, merehandise, tangible personal property, machinery and equipment to a manufacturer for use in a manufacturing operation." 68 O.S.Supp.1998 § 1359(1). Apache sought an exemption based upon its alleged status as a [1063]*1063manufacturer. The Tax Commission first claimed that Apache did not follow the proper procedure for obtaining this exemption.
{5 In 1998 a new statute was created, 68 O.S.Supp.1998 § 1859.2, and it requires a manufacturer to obtain a "manufacturer exemption permit" to "qualify for the exemption authorized in paragraph 1 of section 1359. ..."
A. In order to qualify for the exemption authorized in paragraph 1 of Section 1359 of Title 68 of the Oklahoma Statutes, at the time of sale, the person to whom the sale is made, provided the purchaser is a resident of this state, shall be required to furnish the vendor proof of eligibility for the exemption as required by this section. All vendors shall honor the proof of eligibility for sales tax exemption as authorized under this section, and sales to a person providing such proof shall be exempt from the tax levied by Section 1850 et seq. of Title 68 of the Oklahoma Statutes.
B. Each resident monufacturer wishing to claim the exemption authorized in paragraph 1 of Section 1359 of Title 68 of the Oklahoma Statutes shall be required to secure from the Oklahoma Tax Commission a manufacturer exemption permit, the size and design of which shall be prescribed by the Tax Commission. This permit shall constitute proof of eligibility for the exemption provided in paragraph 1 of Section 1859 of Title 68 of the Oklahoma Statutes. Each such manufacturer shall file with the Tax Commission an application for an exemption permit, setting forth such information as the Tax Commission may require. The application shall be signed by the owner of the business or representative of the business entity and as a natural person, and, in the case of a corporation, as a legally constituted officer thereof.
68 O.S.Supp.1998 § 1859.2(A) & (B), (emphasis added).
16 Apache argues that it should not be required to obtain a permit because it learned during this litigation that even if it had timely sought a permit, the Tax Commission would have denied its application. Apache did apply for an exemption permit on April 18, 2000, several days after the period for which it seeks a refund. The record clearly shows that Apache's application for a permit would have been denied. Apache's argument assumes that the permit is part of an administrative remedy to obtain the manufacturer's exemption. The Tax Commission asserts that Apache's failure to obtain, or least attempt to obtain, the permit bars the exemption for a refund of taxes paid on or after November 1, 1998.
17 Exhaustion of administrative remedies is not required when those remedies are inadequate, ineffective or unavailable. Dewey v. State ex rel. Oklahoma Firefighters Pension and Retirement System, 2001 OK 40, ¶ 14, 28 P.3d 539, 546; McCarthy v. Madigan, 503 U.S. 140, 146-149, 112 S.Ct. 1081, 117 L.Ed.2d 291 (1992). We have explained the inadequacy, insufficiency, or futility of an administrative remedy when that remedy did not provide the parties with an opportunity to fairly present all claims and have them adjudicated. Lone Star Helicopters, Inc. v. State, 1990 OK 111, 800 P.2d 235, 237 (agency had no authority to adjudicate breach-of-contract claim); Walker v. Group Health Services, Inc., 2001 OK 2, ¶ 39, 37 P.3d 749, 762 (Board could not award damages for bad faith breach of an insurance contract). Cf. Montana National Bank of Billings v. Yellowstone County, 276 U.S. 499, 505, 48 S.Ct. 331, 333, 72 L.Ed. 673 (1928), (taxpayer seeking refund was not required to exhaust where tax entity was powerless to grant any appropriate relief).
T8 Apache asks that our definition of an "ineffective remedy" include circumstances where a party would have been unsuccessful in an administrative proceeding. Some courts have stated that certainty of an adverse administrative decision may make exhaustion futile UDC Chairs Chapter, American Ass'n of University Professors v. Board of Trustees of University of District of Columbia, 56 F.3d 1469, 1475 (D.C.Cir.1995); Randolph-Sheppard Vendors of America v. Weinberger, 795 F.2d 90, 105, (D.0.Cir.1986). However, the mere likelihood of an adverse decision is not sufficient to excuse a failure to exhaust. Marine Mammal Conservancy, Inc. v. Department of Agriculture, 134 F.3d 409, 413 (D.C.Cir.1998).
T9 We applied this exception to the exhaustion doctrine in Bankoff v. Board of [1064]*1064Adjustment of Wagoner County, 1994 OK 58, 875 P.2d 1138, where we said that a party was not required to seek a zoning variance when it had previously been denied a conditional use permit. We explained that the law does not require one to do a vain or useless thing or to perform an unnecessary act to obtain relief. Id. 1994 OK 58, at n. 9, 875 P.2d at 1143. Cf. Orion Corp. v. State, 103 Wash.2d 441, 693 P.2d 1369, 1379 (1985), (the futility exception to the exhaustion doctrine is premised upon the rationale that courts will not require vain and useless acts). However, Apache's argument fails because the requirement to obtain a manufacturer's permit is required by statute.
T10 The requirement to exhaust administrative remedies is a prudential rule when exhaustion is not required by statute. Waste Conmections, Inc. v. Oklahoma Dept. of Environmental Quality, 2002 OK 94, ¶ 8, 61 P.3d 219. The doctrine of exhaustion of administrative remedies, as a prudential rule judicially created, does not apply when the Legislature requires exhaustion of a remedy for obtaining a tax refund. When examining a statutory remedy to recover tax payments, we have said that "[glenerally, when a statute creates both a right and a remedy for its enforcement the statutory remedy is exclusive." R.R. Tway, Inc. v. Oklahoma Tax Commission, 1995 OK 129, 910 P.2d 972, 978. Tax exemptions and deductions are matters of legislative grace. Id. In our case today, the right Apache seeks to enforce is a statutory tax exemption for certain manufacturers, and it must thus follow available statutory procedures to obtain that exemption.
111 Section 1359.2 provides a procedure "in order to qualify for the exemption," and a manufacturer desiring the exemption "shall be required to secure from the Oklahoma Tax Commission a manufacturer exemption permit." The term "shall" is often used in a statute as part of a command or a mandatory duty. TuLsa County Budget Bd. v. Tulsa County Excise Bd., 2003 OK 103, n. 25, 81 P.3d 662, 671; State ex rel. Independent School Dist. No. 1 of Oklahoma County v. Barnes, 1988 OK 70, 762 P.2d 921, 924. While it is true that law and equity will not require the performance of a vain or useless act, Dewey v. State ex rel. Oklahoma Firefighters Pension and Retirement System, 2001 OK 40, n. 26, 28 P.3d 589, 546, Apache's assertion of futility in the result of an administrative remedy is, in essence, an equitable defense to the application of a mandatory procedural statute used to obtain a tax exemption.2 This Court has previously declined to interpose equity to block the requirements of mandatory procedural tax statutes. R.R. Tway, Inc. v. Oklahoma Tax Commission, 1995 OK 129, 910 P.2d 972, 978; Whig Syndicate, Inc. v. Keyes, 1992 OK 95, 836 P.2d 1283, 1288.3 We thus agree with the Commission that Apache's claim for a refund for taxes paid between November 1, 1998 and February 29, 2000, is barred by Apache's failure to follow 68 O.S.Supp.1998 § 1359.24
[1065]*1065I 12 We now examine Apache's claim for a refund for taxes paid between March 1, 1997 and November 1, 1998. The general exemption for manufacturers stated:
Exemptions. Manufacturers.
There are hereby specifically exempted from the tax levied by this article:
(1) Goods, wares, merchandise, and property purchased for the purpose of being used or consumed in the process of manufacturing, compounding, processing, assembling, or preparing for sale a finished article and such goods, wares, merchandise, or property become integral parts of the manufactured, compounded, processed, assembled, or prepared products or are consumed in the process of manufacturing, compounding, processing, assembling, or preparing products for resale. The term "manufacturing plants" shall mean those establishments primarily engaged in manufacturing or processing operations, and generally recognized as such;
68 0.S.Supp.1997 § 1859(1).
Another exemption for manufacturers stated:
(3) Sale of machinery and equipment purchased and used by persons establishing new manufacturing plants in Oklahoma, and machinery and equipment purchased or equipment built on site and used by persons in the operation of manufacturing plants already established in Oklahoma. This exemption shall not apply unless such machinery and equipment is incorporated into, and directly used in, the process of manufacturing property for sale or resale. The term "manufacturing plants" shall mean those establishments primarily engaged in manufacturing or processing operations, and generally ree-ognized as such....
68 O.S.Supp.1997 § 1859(3), (material omitted).
Manufacturing was defined as:
(D) "Manufacturing" means and includes every operation commencing with the first production stage of any article of tangible personal property and ending with the completion of tangible personal property having the physical properties which it has when transferred by the manufacturer to another.
63 0.S.Supp.1997 $ 1352(D).
{13 Apache argues that it purchased property for the purpose of being used in a process that changed an unsaleable hydrocarbon into a saleable product. Apache argues that processing occurs after the hydrocarbons reach the surface. These by-drocarbons are compressed, dehydrated, and flow through pipes located on the surface at the well site. Apache stated that raw hydrocarbons are not marketable at the moment they reach the surface, and that field processing is required by all buyers of oil and natural gas. Apache stated that its equipment performed the normal field processing. This processing occurred prior to the hydrocarbons passing through the sales meter located at the well.5 According to Apache, the equipment on the site is entitled to the exemption. It seeks a refund related to the purchase of separators, separator parts, compressors, compressor parts and oil, flow lines, dehydrators, dehydrator parts, heater-treaters, parts, oil and water storage tanks and stock tanks.
114 The parties discuss the meaning of the term "processing," the Commission asserting that such does not occur at the well site and Apache asserting the opposite. The Commission relies upon a treatise stating that what happens to hydrocarbons at a well is not processing; however, the material does [1066]*1066not discuss processing in the context of the Oklahoma Sales Tax Code. Apache relies upon testimony distinguishing extraction of hydrocarbons from the manipulation of the hydrocarbons after they are reduced to possession at the surface.
I 15 In Dolese Bros. v. State ex rel. Oklahoma Tax Commission, 2003 OK 4, 64 P.3d 1093, we explained our opinion in Cain's Coffee Company v. City of Muskogee, 1935 OK 450, 44 P.2d 50:
There being no applicable statutory definition of manufacturing in effect at that time, the court looked for guidance to cases from other jurisdictions and adopted the following from the Illinois Supreme Court:
"[The word 'manufacture' is not to be given its technical meaning. The Century Dictionary defines it as 'the production of articles for use from raw or prepared materials by giving these materials new forms, qualities, properties, or combinations, whether by hand labor or machine.""
. The significance of Cain's Coffee is that it defined manufacturing in terms of an activity's transformative effect upon raw or prepared materials in the course of producing a new article for use.
Dolese Bros., 2003 OK 4, at ¶ 16, 64 P.3d at 1100, (note and material omitted).
We then explained that the definition for manufacturing found in the 1998 version of § 1852, the same as in the 1997 version, continued with the concept of equating manufacturing with a process where one or more of the physical properties of the original raw materials were changed by that process. Id., at ¶ 20, 64 P.3d at 1101. Apache's evidence shows a change in the physical properties by Apache's machinery; that is, a transformation of raw unmarketable materials to a marketable product.
1 16 The Commission argues that a particular activity may be considered as manufacturing for the purpose of the exemption only if or when that activity is generally recognized as manufacturing. Is the production process recognized as manufacturing? We addressed this issue in Dolese when we determined whether sand plants were engaged in manufacturing
In Schulte Oil, where we held that the remanufacture of used oilfield pipe constitutes manufacturing, we said of Cain's Coffee and Tulsa Machinery [Co. v. Oklahoma Tax Commission, 208 Okl. 138, 253 P.2d 1067 (1953)]:
"The salient point in each of these cases is that a product was changed into one that became marketable or more usable. Here, the process of rebuilding damaged oilfield pipe transforms a virtually unusable and nonmarketable product into serviceable and saleable merchandise. While it is true that after the remanufac-turing process is accomplished the end product is still used oilfield pipe, the remanufactured article is nonetheless new and different from the form of the material used in making it.
1130 Although natural and blended sand are both sand in their essential properties, the procedures applied by Dolese to the natural form of the material produce tangible personal property-blended sand-that is substantially new and different from that which originally existed. Natural sand is "a virtually unusable and nonmark-etable product" in today's construction industry. Blended sand, although composed of the same materials as natural sand, is "nonetheless new and different from the form of the material used in making it."
Dolese Bros., at ¶¶ 29-30, 64 P.3d at 1104.
We then said that "[al person with knowledge of what takes place in the production of blended sand today would recognize the operations occurring at a sand production facility as manufacturing." Id. at ¶ 31, 64 P.3d at 1104.
1 17 Refining of hydrocarbons and converting them into various marketable products has long been considered in Pennsylvania as a type of manufacturing. Appeal of Atlantic Refining Co., 398 Pa. 30, 156 A.2d 855, 857, citing, Commonwealth v. National Oil Company, Limited, 157 Pa. 516, 27 A. 374, (1893). Although the processing used by Apache is described as field processing, as opposed to a refining plant, the nature of both processes have the common characteristic of changing a raw product into a different physical form that is marketable for an intended use that is [1067]*1067different from the use of the raw product. Oklahoma is not the only state that considers whether an unmarketable product is changed into a marketable one, and whether a raw product is altered to a consumer product.6 We are convinced that a person with knowledge of the processing that takes place in the production of a marketable gas from a raw unmarketable combination of hydrocarbons would recognize the process as manufacturing. We accordingly hold that Apache's evidence was sufficient to show that it was a manufacturer and entitled to the exemption for the period between March 1, 1997 and November 1, 1998.
(18 The opinion of the Court of Civil Appeals is vacated. The Order of the Tax Commission is affirmed in part and reversed in part, and the matter is remanded to the Tax Commission for further proceedings consistent with this opinion.
1 19 LAVENDER, HARGRAVE, KAUGER, WINCHESTER, EDMONDSON, JJ., Concur.
1 20 WATT, C.J., (Joins OPALA, V.C.J.), OPALA, V.C.J., (joins WATT C.J.), HODGES (joins WATT, C.J.), BOUDREAU, (joins WATT, C.J.), JJ., Dissent.