Office of Conservation

COMMISSIONER OF CONSERVATION MEETS WITH TEXAS RAILROAD COMMISSION

Commissioner Philip N. Asprodites met with his Texas counterpart, Charles Matthews, Chairman of the Texas Railroad Commission, in January to discuss the current status of the oil and gas industry. The Office of Conservation and the Texas Railroad Commission regulate the oil and gas industries in their respective states. Commissioner Asprodites and Chairman Matthews discussed possible severance tax relief on oil production when the price drops below a certain level. Commissioner Asprodites supports the proposal of the Louisiana Independent Oil and Gas Association that would redefine incapable wells as stripper wells when oil prices fall below fifteen dollars a barrel, thereby suspending the collection of severance taxes on incapable wells. The fiscal impact of such a freeze would be less than three million dollars to the state treasury.

Louisiana has previously put into effect other programs which were developed to aid the oil and gas industry while promoting new exploration in the state. Current severance tax programs include the suspension of severance tax collections for up to two years on wells drilled below 15,000 feet, horizontal wells, wells drilled in new reservoirs and inactive wells which have not commercially produced within the last two years.

Current actions by the Office of Conservation include exempting stripper wells and incapable wells from the annual production fees assessed on all wells in Louisiana. Further, the Office of Conservation regularly issues compliance orders to violators of oilfield rules and regulations. In recognition of the plight of the small producer, for those orders issued that pertain to matters that do not pose a threat to public health or the environment, and upon written request by the operator, the Office of Conservation is currently allowing companies additional time to bring their operations into compliance.

These are steps which have been taken by Louisiana to help the oil and gas industry, and reflect a commitment to work with the industry in these serious economic times.

Editors: For additional information, please contact the Office of Conservation at (225) 342-5500.