§ 47:633.4 — Tertiary recovery incentive

Louisiana § 47:633.4

• Jurisdiction: Louisiana
• Title 47: Revenue and Taxation

Text

§633.4. Tertiary recovery incentive
A. It is recognized as essential to the continued growth and development of the
mineral resources of the state and to the continued prosperity and welfare of the people of
the state that tertiary recovery operations be encouraged. It is also recognized that tertiary
recovery methods are experimental and more costly than traditional enchanced recovery
operations, thus preventing recovery of oil in many fields because it is not economically
feasible. It is the purpose of this Section to provide an economic incentive to producers to
allow them to invest in tertiary recovery projects to enhance Louisiana's crude oil production
to the ultimate benefit of the state.
B.(1) In order to accomplish the purposes set forth in Subsection A of this Section,
no severance tax shall be due in regard to production from a qualified tertiary recovery
project approved by the assistant secretary of the office of conservation of the Department
of Conservation and Energy until such project has reached payout from total production of:
(a) Investment costs;
(b) Expenses peculiar to the tertiary recovery project, not to include charges
attributable to primary and secondary operations on that reservoir; and
(c) Interest at commercial rates.
(2) Payout shall be determined at a public hearing held before the assistant secretary
of the office of conservation. Once payout has been achieved severance tax shall be due in
regard to all future production within the qualified tertiary recovery project as provided by
law, with the exception of production within a carbon dioxide (CO 2 ) tertiary recovery project
which is permitted on or after July 1, 2009. For all taxable periods beginning on and after
July 1, 2010, the severance tax on future production within a carbon dioxide (CO 2 ) tertiary
recovery project using anthropogenic carbon dioxide which is permitted after July 1, 2009,
shall be reduced by fifty percent of the tax that otherwise would be due.
(3) The assistant secretary of the office of conservation is hereby authorized to adopt
rules, regulations, and orders for the proper administration of this Section.
C. For purposes of this Section a qualified "tertiary recovery project" is defined as
an enhanced crude oil recovery project conducted in accordance with sound engineering
principles as used in the industry, subject to the approval of the commissioner and employing
one of the following methods:
(1) Miscible gas floods involving the injection of hydrocarbons, carbon dioxide, and
nitrogen.
(2) Near-miscible fluid floods involving the injection of alkaline, surfactant,
hydrocarbons, carbon dioxide, or nitrogen.
(3) Immiscible floods involving the injection of carbon dioxide.
D. This Section shall apply to tertiary recovery activities on any reservoir that is no
longer capable of producing by methods other than tertiary. It shall also apply to reservoirs
which are still capable of producing by primary and secondary methods after an amount of
production has been recovered during a tertiary recovery project equal to that which would
have been recovered by utilizing primary and secondary methods, which amount shall be
determined by the assistant secretary of the office of conservation at the hearing required
under Subsection B of this Section.
E. This Section shall not apply to reservoirs on which tertiary recovery operations
are being conducted prior to the effective date of this Section.
F. Repealed by Acts 1986, No. 321, §2.

Legislative History

Added by Acts 1983, No. 643, §1. Acts 1984, No. 562, §1, eff. July 12, 1984; Acts 1986, No. 321, §2; Acts 2009, No. 450, §1, eff. July 1, 2009; Acts 2023, No. 150, §18, eff. Jan. 10, 2024.