Relating to a sales and use tax exemption and an oil and gas severance tax credit for the use of alternative base fluids in energized fracturing operations; imposing a civil penalty.
The passage of HB 2691 would significantly impact state laws concerning tax exemptions and credits related to oil and gas production. The legislation specifically amends the Texas Tax Code by adding new sections that explicitly exempt certain alternative base fluids from sales taxes and provide a new tax credit for operators who meet specific usage thresholds. This could lead to a shift in operational practices in the oil and gas sector, as companies may prefer to adopt alternative fluids to take advantage of these incentives, ultimately fostering innovation in extraction techniques while potentially reducing reliance on traditional water-based fracking processes.
House Bill 2691 proposes a sales and use tax exemption, along with an oil and gas severance tax credit for utilizing alternative base fluids in energized fracturing operations. The bill intends to encourage the use of alternative fluids, such as nitrogen and carbon dioxide, in oil and gas production, which could lead to more environmentally friendly extraction methods. By providing financial incentives through tax credits, the legislation aims to promote sustainable practices within the oil and gas industry while maintaining economic competitiveness in Texas.
The overall sentiment around HB 2691 appears to be cautiously optimistic among industry stakeholders and proponents of environmentally sustainable practices. Supporters argue that the bill will foster a more environmentally conscious approach to oil and gas extraction, potentially reducing the environmental footprint of these operations. However, there are concerns from environmental advocacy groups regarding the implications of increased oil and gas production and the potential risks that alternative fracturing fluids may still pose to water supply and overall ecosystem health.
A notable point of contention surrounding HB 2691 lies in the balance between promoting the oil and gas industry and addressing environmental concerns. While the legislation offers economic incentives, opponents argue that the focus on facilitating extraction may overshadow the need for stricter environmental regulations. Critics are particularly worried about the long-term impact of expanded oil production and the possible consequences for water resources and local communities. As such, the discussions about HB 2691 highlight the ongoing struggle between economic growth and environmental stewardship in state legislation.