Issue: The onslaught of government-sponsored lawsuits creates a damaging precedent of regulation through litigation.
LABI Position: Oppose efforts by governmental entities to use litigation to harass businesses when engaged in lawful activities.
Reasoning: All civil law enforcement statutes are jeopardized when the state uses regulations to extort money rather than ensure compliance. This act undermines the public’s confidence that any regulatory program will be applied in an even-handed, neutral, and impartial manner by financially disinterested persons.
Issue: The Legislature continues to amend Louisiana laws to address judicial interpretations of statutes and regulatory protocols that encourage lawsuits against the oil and gas industry. The business community must legislatively address these inconsistent interpretations.
LABI Position: Support any appropriate modifications to existing laws concerning oil and gas legacy lawsuits, coastal lawsuits, and environmental lawsuits along with proposed changes to mineral lease obligations that bring fairness to industry and the public alike, and promote rather than quash, industry growth, employment, and long-term tax revenues without compromising reasonable protection of human health and the environment. Strongly defend any legislative advances made to existing law.
Reasoning: The continual onslaught of legal action against the oil and gas industry will drive away investment in new facilities along with re-investment in existing wells. To the degree that Louisiana’s legal climate remains hostile towards exploration and production in our state, the industry’s prospects for funding of capital intensive projects here declines.
Energy Taxation: Oppose suspension of exemptions from taxes which are granted to producers and consumers of energy products and sources. Oppose increased or new taxes or fees on oil, natural gas and other hydrocarbons, such as: a processing, transportation, or refinery tax; a sales tax on business utilities; a change in the calculation of the natural gas or other energy franchise taxes which would increase the cost. An increased severance tax or suspension of severance tax exemptions; a sales tax on natural gas transportation, a coastal wetlands environmental levy, a "first use" tax; or a property tax on minerals in place or a reservoir tax. Lastly, a change in the industrial tax exemption program (ITEP), which reduces its benefit.
Special Funds: Legislatively Dedicated Self-Imposed Fees: Oppose raiding of legislatively dedicated funds that were created and funded by industry fees paid to accomplish specific regulatory purposes.
Water Policy: Support a fair, flexible, and scientifically based statewide water use policy that considers the needs of all water users. Monitor the development of state and federal water conservation programs to ensure that all water users – industrial, residential and commercial – are assured adequate access to useable water sources. Oppose new or increased taxes or fees imposed by government on the use, extraction or consumption of water.
Contingency Fees: Oppose legislation that would authorize state or local government to enter into contingency fee contracts or to employ outside counsel to be paid by the defendants or the state from the proceeds of awards and/or settlements. Support additional legislative oversight. Support efforts to stem the tide of state and local government-sponsored and government-authorized litigation.
Subsequent Purchaser: Oppose legislation which would create a right of action to assert claims for environmental damages that were caused or sustained prior to acquisition by a purchaser of the property.
Definition of Energy Sources: Support legislation which will clarify the definition of “energy sources” to assure that all are excluded from state sales and use tax.
Oil and Gas Development: Support legislation that will continue to offer incentives and a regulatory climate which would stimulate oil and gas exploration and production in Louisiana. Support streamlining of exploration, production and transportation permitting and reduction of regulatory burdens. Support primacy of state regulation over the siting, zoning, permitting, regulation of hydraulic fracturing, and other aspects of oil and natural gas operations. Oppose legislation and/or regulations that would impose additional restrictions on mineral leasing, drilling permit acquisition, or other onerous requirements that act as a disincentive to exploration, production and transportation of natural gas and oil unless and until valid, scientific studies document significant adverse impacts on the environment and risk assessments are attached.
Local Energy Taxation: Oppose legislation which would eliminate the constitutional ban on local taxation of all motor fuels.
Renewable Energy Standards: Oppose mandates which would impose renewable fuels portfolio standards that would require electricity providers to obtain a minimum percentage of their power from renewable energy resources by a date certain.
Refining Capacity: Encourage expansion of Louisiana’s oil refining capacity by removing any state-imposed barriers to construction of new and expanded refining facilities.
Fuel Diversity: Encourage fuel-use diversity, whenever economically feasible, in order to reduce Louisiana’s dependence on a single fuel for electricity generation.
Solution Mining and Hydrocarbon Storage: In an effort to stabilize market prices of natural gas and other hydrocarbons for all consumers and to encourage the storage of CO2, support legislation to encourage development of salt domes and other storage facilities in the state of Louisiana. Support reasonable regulations for the safe permitting and operation of solution mining wells and hydrocarbon storage.
Electricity Transmission: Encourage the Louisiana Public Service Commission to require that all repairs to the electricity transmission and distribution system, to the greatest extent possible, incorporate upgrades sufficient to meet federal goals of re-tooling the nation’s transmission system. Support legislation that would grant tax incentives for upgrading the state’s electric transmission and distribution grid. Promote improved transmission, evaluate cost-effective storm hardening, and seek access to lower cost generation for all consumers.
Competition: Support a fair and fully competitive retail electricity market that allows all consumers the right to choose their supplier of electricity.
The move to competition should:
• Provide for the transition to competition for all consumers;
• Require the continued regulation of the transmission and distribution of electricity;
• Provide incentives that will encourage the expansion and upgrade of electricity transmission facilities;
• Promote reliability of electric service for all consumers;
• Require the equitable sharing of net verifiable stranded costs that cannot be mitigated;
• Protect consumers from unwarranted shifts in tax burdens; and
• Provide for the prompt amendment or repeal of statutory constraints to open access.
Lease Use/Plant-Use Gas: Support legislation affirming the historical treatment of natural gas used at the lease and at gas processing plants as not being subject to sales or use taxes.
Competition: Support a fair and fully competitive retail natural gas, liquefied natural gas, and liquefied petroleum gas market that allows all consumers the right to choose their supplier of natural gas.
Liquefied Natural Gas: Support legislation and/or regulations that will promote the development of LNG terminals both onshore and offshore Louisiana.
Cost of Service: Oppose legislation that would shift the cost of electricity service from one class of consumer to another. Oppose legislation or regulations that would force consumers to absorb the costs of providing service to customers of another utility company in another service territory. Oppose imposition of taxes or fees to subsidize energy assistance programs within the Public Service Commission.
Consumer Advocacy: Oppose legislation that would establish new programs within new or existing agencies or departments that require public funding for representation or intervention in regulatory proceedings.
Alternative Energy and Feedstock Development: Support legislation that will promote use of alternative energy sources but does not unduly favor one energy form over another.
Fuel Mandates: Oppose legislation that will mandate the use or supply of any specific fuel for gasoline, diesel or electricity generation.
Injection Wells: Support the retention of the responsibility for Class I and Class II injection wells related to oil and gas exploration and production within the Department of Natural Resources.
Intrastate and Interstate Pipelines: Participate actively with governmental entities and leaders to ensure the viability and integrity of the state’s intrastate pipeline systems and those interstate pipeline systems that operate and serve customers in Louisiana.
Utility Exemption from Louisiana Monopoly Law: Support legislation to exempt from the provisions regulating monopolies the electric and gas utility companies which are subject to the jurisdiction of the LPSC, the City Council of the City of New Orleans, the Federal Energy Regulatory Commission, or any other public utility regulatory body with ratemaking or other general regulatory authority over an electric or gas utility company.
Abrogation of Contracts: Oppose legislation which would abrogate existing contracts between parties.
By-Products: Maintain the non-taxable status of by-products and intermediate materials.
Mineral Taxes: Support legislation and/or regulations that will establish the fair market value for oil, natural gas, and oil and natural gas equipment for taxation purposes.
Assessment Practices/Electric Utilities: Oppose redistribution of tax proceeds to parishes other than the parish where the electric utility plant is located.
Assessment Practices/Pipelines: Support equitable assessment practices for pipelines classified as public service properties.
Oilfield Wastes: Support the current jurisdiction of the Department of Natural Resources and the Department of Environmental Quality and oppose changing the jurisdiction thereof to the Attorney General or to any other department or agency.
Expropriation: Support the existing Louisiana statutes and constitutional guarantees for the orderly expropriation of property and for the compensation for those properties expropriated for energy-related transmission or product transportation.
Lauren Chauvin serves as Director of the Energy Council. In this capacity, her responsibilities include all issues impacting Louisiana’s energy producing and consuming industries.
Director, Energy Council, LABI
Chair, Energy Council
Beta Land Services, LLC