Pandemic offers Louisiana oil and gas industry hope on long-standing wishes

Louisiana’s oil and gas industry could succeed on some key legislative proposals that have failed in the past as leaders urge passage during the historic collapse of oil prices.

The industry’s push to stifle coastal lawsuits and to provide severance tax relief has made progress through the Legislature, in part boosted by arguments that the industry needs “life support” measures to stay afloat, The Daily Advertiser reports. 

“There’s no doubt that we’re facing challenging times as an industry right now,” Louisiana Oil and Gas Association President Gifford Briggs told the House Natural Resources and Environment Committee on Wednesday. “This is unlike anything we’ve ever seen.” 

As the industry hopes to avoid huge shutdowns and layoffs, leaders are pushing several measures to reduce and suspend Louisiana’s severance tax on oil and gas, and to limit coastal use permits filed against oil and gas companies. 

One such measure, HB506, written by Rep. Phillip DeVillier, R-Eunice, would reduce the severance tax on oil, which currently sits at 12.5%. The original intention of HB506 was to reduce the tax rate down to 8.5% by July 1, 2028. But the bill was amended to include a short-term reduction in the rate due to COVID-19. 

However, the bill would also result in a $112.6 million loss of revenue for the next five years for the state, and the parishes, which receive a portion of the revenue, could see $6.9 million in lost revenue by fiscal year 2029. The bill is heading to the House floor for a vote. 

Read the full story for the status on two other bills backed by the industry.