Louisiana House Bill HB1026

Louisiana 2010 Regular Session

• Introduced: 3/29/10
• Refer: 3/29/10

Caption

Extends the Royalty Relief Dry Hole Credit Program until 2015 (OR SEE FISC NOTE GF RV)

Impact

The bill's primary impact revolves around allowing oil companies more time to take advantage of the Royalty Relief Dry Hole Credit. This program is particularly significant in encouraging drilling activities on state lands that have previously proven to be less productive. By extending the credits, the state aims to maintain oil exploration efforts, which in turn can have broader implications for the local economy, including job creation and state revenue from future productive wells. However, this measure also raises questions about the effectiveness of such credits in yielding long-term benefits for the state and its residents.

Summary

House Bill 1026, known as the Royalty Relief Dry Hole Credit Program, aims to extend the eligibility and application period for existing royalty relief credits for oil drilling operations on state lands. The bill proposes to amend various provisions of the Louisiana Revised Statutes to extend the deadline for applying for and receiving credits until June 30, 2011, while also prolonging the program's statutory authorization until June 30, 2015. This initiative seeks to provide financial relief to operators who discover unproductive wells, thus incentivizing continued exploration and drilling activities in these regions.

Sentiment

The sentiment surrounding HB 1026 appears to lean towards support from those within the oil and gas industry, who view the bill as essential for sustaining drilling operations in economically challenging environments. Meanwhile, there may be some contention among environmentalists and community advocates concerned about the environmental consequences of extended drilling on state lands. Yet, specific public commentary on the bill remains sparse, with most discussions likely occurring during legislative sessions.

Contention

While the bill aims to support industry operations, the potential contention lies in its impact on state resources and the long-term viability of such programs. Critics may argue that extending the dry hole credit could lead to an over-reliance on fossil fuel extraction at the expense of exploring alternative energy options or investing in renewable resources. The bill also raises critical concerns about whether the extension allows enough oversight to ensure that taxpayer resources are not unnecessarily expended on unproductive exploration.