On June 24, 2025, Louisiana Governor Jeff Landry announced the signing of energy bills into law and an executive order that will “unleash Louisiana’s coastal energy production.” The executive order establishes a plan to reduce royalties on oil and gas from state lands.
House Bill 600 (HB600), authored by House Representative Brett Geymann, was signed into law by Governor Landry on June 11, 2025, becoming Act No. 295. This law implements several amendments to R.S. 47:633, the Louisiana statute setting the tax rate on “natural resources severed from the soil or water,” including “minerals such as oil, gas, natural gasoline, distillate, condensate, casinghead gasoline,” and many other natural resources. Specifically, the law amends the severance tax rate on oil resources. These amendments will apply to taxable periods beginning on and after July 1, 2025. The statute had previously set the severance tax rate for all oil production (except for oil produced from a narrow group of uncommon wells) at 12.5% of the oil’s value at the time and place of severance. The statute now provides that oil produced from a well completed on or after July 1, 2025 shall be taxed at a rate of 6.5% of its value at the time and place of severance. However, oil produced from a well completed before July 1, 2025, will continue to be taxed at a rate of 12.5%. The new law does not change the methods outlined in the statue for determining the value of produced oil. By reducing the tax rate on oil produced from these new wells by nearly half, these amendments create significant incentive for drilling new oil wells on state lands.
In addition, Senate Bill 244 (SB244), a 227-page tome authored by Senator Bob Hensgens, was signed by the Governor on June 24th, becoming Act No. 458. The new law implements an overhaul of the state agency that regulates oil and gas and related operations. The act will go into effect in part on August 1, 2025 and in part on the Governor’s signature on June 24, 2025. Previously, regulatory authority was split between the Secretary of the Department of Energy and Natural Resources and the Commissioner of Conservation, who was also the Department’s Assistant Secretary. The new act changes the Department’s name to the Department of Conservation and Energy and transfers to the authority of the former Commissioner to the Secretary of the newly named Department. Besides this structural change, the act also makes several substantive changes.
- It creates a new Natural Resources Financial Security Fund, to be administered by the Natural Resources Trust Authority in consultant with the Mineral and Energy Board, and tweaks parameters for the Oilfield Site Restoration Fund.
- It contains provisions for developing and implementing a comprehensive water resource plan.
- It also modernizes the definitions of intrastate pipeline and intrastate natural gas, which the Commissioner of Conservation had regulated for over fifty years under the Natural Resources and Energy Act of 1973.
- It tightens the requirements for expropriation under the Louisiana Geologic Sequestration of Carbon Dioxide Act for pipelines for transporting carbon dioxide. Now, to exercise expropriation under that Act, a pipeline must show “there exists a reasonable probability that the pipeline will serve the public by transporting carbon dioxide for storage for one or more third parties.” But that has long been the main purpose for most all carbon sequestration projects. Also, this new act did not amend the general expropriate statute, La. R.S. 19:2, which separately authorized expropriate for CO2 pipelines. So this change might not be as big as it might seem at first blush.
- It expands the notice requirements for applications for Class V and VI injection and storage wells for carbon sequestration. With the EPA having approved in late 2023 Louisiana’s request for primacy in regulating such wells in Louisiana, and with the Fifth Circuit’s May 21st decision in Deep South Center for Environmental Justice v. EPA rejecting efforts to overturn the EPA’s decision, the Secretary may now face more scrutiny over carbon sequestration decisions.
- Section 2 of the act takes a stab in curbing the poker-game nature that “legacy litigation” in the state has too often become since the Corbello watershed over twenty years ago now. In 2006, in the wake of Corbello and its early progeny where it became apparent that many landowners and their lawyers were pursuing claims for alleged environmental damage not with the goal of cleaning up any property but instead to line their pockets with moneys that would never been spent on oilfield remediation (and, frequently, after having been paid millions of dollars in royalties from the prior oil and gas production on their property), the Legislature enacted La. R.S. 30:29 to require remediation plans be developed with oversight from the Commissioner of Conservation. But this effort proved almost toothless: the initial legislation was rife with loopholes that any half-awake attorney could drive a Mack truck through. This new law sews up many of those loopholes with an aim to disincentivizing the abuses that had become all too apparent and were squelching investment in Louisiana.
- The new law fixes firm timelines for submitting remediation plans to the Department of Conservation and Energy. After a party who admits liability or has been found by a judge or court to be liable for environmental damage has submitted a proposed remediation plan to the Department, plaintiffs and others have a fixed 30-day period (which may be extended only for good cause shown) to submit competing plans or comments.
- The trial court no longer has the discretion to adopt any plan that anyone may propose at any time with or without input from the Department. The new law creates a presumption that the plan adopted by the Department is the most feasible, and it increases the burden of proof—from a preponderance of the evidence to clear and convincing evidence—for a plaintiff or other party to show that the plan approved by the Department is not the most feasible; similarly, it limits other plans that a court may consider solely to those timely submitted to the Department. No more unvetted, last minute plans from plaintiff attorneys and their cadre of experts.
- The new law requires that any trial on the merits be stayed from the filing of a limited admission until the court adopts the most feasible plan.
- The new law limits the venue for appeals from a trial court’s judgment adopting a plan solely to the First Circuit Court of Appeal.
- The new law provides that, unless the parties have an express contract provision to the contrary, a party’s legal responsibility is satisfied by meeting the standards set forth in applicable regulatory standards. So the new law puts the kibosh on the ability of plaintiff attorneys to urge trial courts to adopt remediation plans with novel, wildly expensive and expensive remediation standards in an effort to ratchet up the price of poker to force all the but the deepest-pocket defendants to acquiesce in unreasonable and inflated settlement demands.
- The new law gives a party who admits liability or is found liable the option to conduct the adopted remediation plan itself by posting a bond instead of depositing funds for the remediation plan into the registry of the court.
- The new law cuts off a defendant’s exposure for ongoing future costs and fees. Once a trial court has adopted a remediation plan, the responsible party shall not be responsible for any further attorney, expert, environmental evaluation, monitoring, investigation, testing or similar fees or costs.
- The new law imposes real consequences for plaintiffs who pursue baseless claims. If a defendant is found not to have caused the alleged environmental damages, then it may recover from the plaintiff these same fees and costs it previously incurred.
- The new law limits nonremediation damages (other than for economic loss damages proven by a preponderance of the evidence) to no more than three times the value of the surface of the property as if it had no environmental damage.
But don’t count your chickens yet. Under Section 15(A) of the new law, these changes to La. R.S. 30:29 will not apply to any lawsuit filed before September 1, 2027 for damages from activities conducted before June 24, 2025.
- Section 4 adds numerous provisions on how the Department may be organized and how the Secretary’s functions may be delegated—with a goal to “provide flexibility to the department to respond to changing conditions, and ensure the continuity of effective administration.”
- It add a new section 600 for “a voluntary administrative process to provide an alternative means of resolving disputes arising from activities under the jurisdiction of the Department.”
- Presumably a result of lobbying efforts by Rosefield Fourchon Operating and other terminal operators after the LPSC’s recent rulings against Rosefield’s attempt to use its market power to jack up tariff rates for piping oil a couple hundred feet across its terminal facility at a bottleneck location for offshore production, Section 6 amends some ancient statutes giving the Louisiana Public Service Commission (LPSC) broad regulatory authority over the prices and terms of service that oil pipelines in the State can charge their shipper customers. More specifically, it narrows the definition of “pipe line” in La. R.S. 45:251 to exclude certain pipes used solely within terminal facilities and provides the ability for the Secretary of Conservation and Energy to weigh in whether a pipe should be classified as a common carrier. Because the LPSC’s authority over common carriers derives from the Louisiana Constitution rather than by statute and because, with the Louisiana Supreme Court’s blessing, the LPSC has successfully pushed back on prior legislative efforts to curb the scope of its authority, it is definitely an open question whether the LPSC will bow to these legislative changes here. More specifically, it remains an open issue whether the LPSC may consider a particular pipe within a particular terminal facility to constitute a common carrier subject to its jurisdiction over rates and service, even if the pipe falls outside this new statutory definition.
Only time will tell whether the act will result in easing or instead throttling the regulatory requirements and environment for oil and gas producers, pipeline and storage companies and other energy industry participants in Louisiana and ultimately whether it may incentivize or disincentivize development in Louisiana.