Abandoned oil well bill passes Louisiana House


The Louisiana House of Representatives has unanimously passed HB662, which would exempt oil produced by abandoned oil wells from severance tax, Louisiana Illuminator reports.

The bill, introduced by Rep. Jean-Paul Coussan, R-Lafayette, would give the incentive of not paying the severance tax, which is currently 12.5%, to any company that wants to take over the abandoned wells.

As of now, the Department of Natural Resources lists 4,000 wells in the state as abandoned. Wells usually become abandoned when the small companies that drilled them go bankrupt and do not plug or close the well correctly.

When wells are abandoned, liability for the well and its oil falls on the state. The tax incentive would hopefully attract companies to take over this liability.

The bill is a win-win for the industry and environment, Rep. Coussan says, but Cynthia Sarthou, executive director of Healthy Gulf, says the bill will result in a loss of severance tax for the state and cleanup of the abandoned wells will be taxpayer-funded.

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