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Barrels of Money, oil on canvas painting by Victor Dubreuil, c. 1897 (private collection) [Public domain], via Wikimedia Commons

Louisiana brings in $12 million from every $1 increase in oil price

Zachary Toliver | Shale Plays Media

Who could possibly hope for higher oil prices? The state of Louisiana actually. Thanks to severance taxes from oil and gas exploration and extraction coupled with royalties, rentals, bonuses and mineral interest, the state brings in around $12 million a year extra every time the barrel price of oil increases by $1 and stays there for a fiscal year. According to a recent article by Shreveport Times contributor, Mike Hasten, if the price of oil lingers at the current $104 per barrel, the state would receive an extra $96 million in revenue. Although, several analysts believe this stagnant high price is unlikely to hold for the current fiscal year.

The article quotes Patrick Courreges of the Department of Natural Resources who claimed that oil production in Louisiana has decreased yearly since the 1960s when about 650 million barrels of oil were produced each year compared to the 70 million today. However, for the past three years, the amount of oil and gas produced in the state has increased.

Read more about Louisiana’s saving grace in Mike Hasten’s article, “High oil prices: bad for motorists, good for state.”

Related: EDITORIAL: Stop tax proceeds for those who choose to ban fracking

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