Texas Senate Bill SB1999

Texas 2019 - 86th Regular

Caption

Relating to an oil and gas production tax credit for oil and gas producers that provide treated produced water to aquifer storage and recovery project operators.

Impact

This legislation is poised to influence environmental management and oil and gas production practices within Texas. By incentivizing the provision of treated produced water, SB1999 encourages oil and gas companies to engage in responsible water management practices while also supporting aquifer storage and recovery initiatives. The introduction of this tax credit could lead to a more sustainable use of resources, potentially bridging gaps in water shortages and enhancing the availability of treated water for beneficial applications.

Summary

SB1999 is a significant legislative measure in Texas aiming to introduce a tax credit for oil and gas producers who supply treated produced water to operators of aquifer storage and recovery projects. The bill outlines definitions relevant to the oil and gas industry and establishes eligibility criteria for producers to claim this tax credit. It mandates that to qualify, the produced water must have a total dissolved solids concentration exceeding 90,000 milligrams per liter, with specific treatment requirements when injected into an aquifer for subsequent recovery and use.

Contention

While the bill garners support for its efforts to promote resource sustainability, it also raises essential discussions regarding environmental impacts and the regulatory oversight of water treatment processes. Critics may argue that the parameters for water treatment and the certification process could be insufficient to ensure the protection of native groundwater. Furthermore, as the bill imposes a ceiling on the total tax credits available each fiscal year, concerns over equity for smaller producers versus larger operators may arise, leading to debates on how these credits are allocated and claimed.