2023 Louisiana Laws › Revised Statutes › Title 47 - Revenue and Taxation › §47:633.4. Tertiary recovery incentive

RS 47:633.4 - 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 Energy and Natural Resources 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 (CO2) 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 (CO2) 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.
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.