Provides for oilfield site restoration fees (EG SEE FISC NOTE SD RV See Note)

HB 637 amends Louisiana Revised Statutes 30:87(F)(2) to establish fixed oilfield site restoration fee rates for reduced rate production wells, replacing the prior methodology that calculated these fees proportionally based on reduced severance tax rates. The bill creates four specific fee categories with fixed percentage reductions from full rate production fees: oil from certified incapable wells at fifty percent, oil from stripper wells at twenty-five percent, gas from low pressure oil wells at forty percent, and gas from incapable gas wells at seventeen and one-half percent. These percentages apply to the respective full rate production fees established elsewhere in the statute, and the statutory amendments cross-reference the well definitions contained in the severance tax statute, R.S. 47:633.

Oil and gas operators producing from reduced rate wells will experience changes in their oilfield site restoration fee obligations depending on well category. Operators of incapable oil wells and stripper oil wells will see their oil restoration fees reduced to fifty and twenty-five percent of full rate fees respectively. Operators extracting gas from low pressure oil wells and incapable gas wells will pay restoration fees at forty and seventeen and one-half percent of full rate gas fees respectively. The magnitude of actual fee changes will depend on the difference between these fixed percentages and the proportional calculations previously applied under the old method, which tied fee reductions directly to severance tax rate reductions for each well category.

The oilfield site restoration fee program operates under R.S. 30:87 as part of Louisiana's regulatory framework for environmental remediation and site cleanup in the oil and gas industry. The definitions of certified incapable wells, stripper wells, low pressure oil wells, and incapable gas wells are drawn from the severance tax statutes in R.S. 47:633, creating interdependence between the tax and restoration fee regimes. The amendment becomes effective July 1, 2026, providing operators with advance notice before the new fee structure takes effect.