Gov. John Bel Edwards vetoed a tax break for the oil and gas industry that would have cost the state over $38 million over the next five years. The Louisiana legislature approved the bill, but Edwards said he doubted whether it would actually produce the jobs promised by oil lobbyists.
“During a legislative session wrought with limited access for the public to meaningfully comment on bills, proponents of this new exemption averred that the exemption would increase oil production and create jobs. Yet no legitimate evidence or testimony supports this assertion, other than the testimony of those with a vested interest through enactment of a new exemption,” Edwards wrote in his letter explaining the veto.
Unlike other industry tax exemptions, this bill did not have a requirement that the companies benefiting from the exemption employ Louisiana residents. In addition, lobbyists backing the bill never produced any evidence proving that the exemption would increase production and create new jobs.
Edwards also expressed his frustration with the fact that the legislature passed the bill during a special session that was supposed to have been dedicated to the COVID-19 pandemic and hurricane recovery.
“There will be a fiscal session of the Legislature in the Spring of 2021, where this plan and other tax measures can be fully debated and considered,” Edwards said.
The veto comes days after Edwards announced a new renewable energy initiative that will harness the state’s offshore energy production experience for the development of wind power in the Gulf of Mexico. Offshore wind energy is one of many strategies pursued by the Climate Initiatives Task Force Edwards created earlier this year.
“This is not some ‘pie in the sky’ promise of economic opportunity,” Edwards said. “We already have an emerging offshore wind energy industry, and Louisiana’s offshore oil and gas industry has played a key role in the early development of U.S. offshore wind energy in the Atlantic Ocean.”
According to the U.S. Department of Energy’s National Renewable Energy Laboratory, the construction of a single 600-megawatt wind farm in the Gulf would produce around 4,400 jobs and $445 million in economic output. Continuing operations would create 150 new permanent jobs and $14 million in annual spending.
“Renewable energy like offshore wind can help the state cut its emissions and do its part in avoiding the worst impacts of climate change,” said Deputy Director Harry Vorhoff of the Governor’s Office of Coastal Activities. “I applaud Governor Edwards for opening the door, so we can take a hard look at how and where renewable energy is deployed in the federal waters off Louisiana’s coast.”