Saturday, January 7, 2012

Advocate, LFT agree on "Haynesville Bust"

In a recent editorial, The Advocate in Baton Rouge pointed out that the state is losing hundreds of millions of dollars because a loophole in our tax law gives petroleum producers a tax break on the boom in natural gas drilling.

The newspaper called it"the great Haynesville bust" because most of the action is in North Louisiana's Haynesville play, where landowners have become millionaires and oil companies are reaping vast profits.

Left our of the bonanza is the State of Louisiana: "In the 1990s," said the editorial, "when horizontal drilling and hydraulic fracturing were new methods, the state passed at the behest of the powerful oil industry a 100 percent tax exemption for the cost of drilling wells."

In this letter to the editor, LFT President Steve Monaghan wrote of the practical impact of the loophole. "While education, health care, the transportation infrastructure and other vital public services starve," Monaghan wrote, "vast fortunes are being made by the energy corporations."

It was not unexpected, said Monaghan:

Nearly two years ago, the Louisiana Federation of Teachers and the
Louisiana Budget Project were partners in creating the Better Choices for a
Better Louisiana coalition. The coalition’s main goal was a balanced approach to
our budget crisis and to ensure that Louisiana had the resources required to
provide the services our people need and deserve.
Early on, Better Choices was critical of the state tax loophole granted for horizontal drilling. As new discoveries in the Tuscaloosa Trend come into play, Louisiana stands to lose even more millions.

The LFT President ended his letter by urging Gov. Jindal and the legislature "to examine and reconsider the tax breaks for horizontal drilling and each of the more than 400 tax breaks on the books."

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