Letter: Master Plan, not new tax, best thing for oil and gas

10 27, 2014 by The Advocate

The Oct. 7 odd-couple column co-authored by Quin Hillyer and John Barry promoting a multibillion dollar processing tax on the state’s oil and gas industry under the guise of a “Coastal Wetlands Environmental Levy” proves the adage, “Those who cannot remember the past are condemned to repeat it.” Variations on a new tax on the movement of oil and natural gas in Louisiana have been around for decades. However, a processing tax has not been imposed for one important reason: It is a profoundly bad idea.

Over the years, the processing tax — and its supposed billions in new tax revenues — has been promoted as the panacea to cure whatever issue has the fancy of various interest groups or politicians: increased teacher pay, decreased individual taxes, building better or more roads and, yes, even improving the environment.

Fortunately, Louisiana residents and policymakers are a lot smarter than to fall for this fool’s gold illusion. Why? Because they know the following: A new tax on the oil and gas industry will not be a positive thing for the state economy or those dependent on it for employment, taxes or portions of taxes have a way of getting passed on to ultimate consumers and, lastly, there is very little confidence that the billions raised can be or will be spent in the most effective manner or for the intended purpose, in this case: coastal restoration.

To address the intended purpose of coastal restoration, we look to the Coastal Protection and Restoration Authority’s “State Master Plan.”

This historic collaboration between all stakeholders paves the way for instructing the state in its efforts. This plan utilizes the best science and engineering to focus on flood risk reduction and the ability to rebuild lands.

There are a variety of funding sources that will help the Master Plan in its mission, most notably funds from the Gulf of Mexico Security Act and the RESTORE Act. The Master Plan recognizes the synergy between short-term needs and long-term investments. In other words, the Master Plan has carefully laid out the best path forward and is required by law to review and revise the plan every five years to address the dynamic needs of the coast.

The state Master Plan is the best hope for the coast’s future. The Master Plan is not only supported by our partners in the industry but it has also widely been praised by numerous NGOs and environmental organizations. Enacting another attempt to tax the industry with a “processing tax” reduces the effectiveness of existing funding streams, which could slow the success of the Master Plan and hamper the oil and gas industry that drives the Louisiana economy forward.

Chris John

Mid-Continent Oil and Gas Association

Baton Rouge