2011 Louisiana Laws
Revised Statutes
TITLE 47 — Revenue and taxation
RS 47:633.5 — Produced water injection incentive

§633.5. Produced water injection incentive

A. The office of water resources of the Department of Environmental Quality was directed by R.S. 30:2074(C) to act in conjunction with the Department of Natural Resources to conduct a risk analysis of the discharge of produced waters, excluding cavern leach waters, from oil and gas activities onto the ground and into the surface waters in the coastal wetlands of the state, and to examine the environmental risks and the economic impact on the oil and gas industry if the discharge was to be prohibited. The risk analysis was not properly conducted as directed, however, and the Department of Environmental Quality did in fact prohibit the discharge of produced water into the surface waters of the state by rules promulgated and which became effective on March 20, 1991.

B. In order to help accomplish the objective of reducing the discharge of produced water, and to help ease the tremendous financial burden placed upon the oil and gas industry, it is the purpose of this Section to provide an economic incentive to producers of oil and gas by allowing them to realize a severance tax savings if they inject produced water into an oil and gas reservoir, from the same reservoir and field, for the purpose of increasing the recovery of hydrocarbons therefrom.

C. In order to accomplish the purpose set forth in this Section, the severance tax otherwise due on oil and gas shall be reduced as follows:

(1) On the recovery of oil, when produced water is injected into an oil reservoir for the purpose of increasing recovery, the severance tax on one barrel of oil incrementally produced therefrom shall be reduced by twenty percent of the tax that otherwise would be due.

(2) On the recovery of gas, when produced water is injected into a gas reservoir for the purpose of increasing recovery, the severance tax on one thousand cubic feet of gas incrementally produced therefrom shall be reduced by twenty percent of the tax that otherwise would be due.

D. The assistant secretary of the office of conservation and the secretary of the Department of Revenue shall jointly adopt rules, regulations, and orders for the proper administration of this Section.

E. In no event shall the reduction of severance tax apply to or reduce that portion of severance taxes attributable to and dedicated to the parishes in accordance with Article VII, Section 4 (B) and (D) of the Constitution of Louisiana.

Acts 1991, No. 625, §1, eff. July 17, 1991; Acts 1998, No. 67, §1.