Deep horizontal drilling for oil and gas is enormously expensive. The fracking process to release oil and gas from the shale reached by those deep wells is enormously controversial. But when one of those wells comes in, it’s enormously profitable.
“I know for a fact that companies absolutely want to drill those wells because we have that incentive,” Louisiana Oil and Gas Association president Don Briggs says of Louisiana’s severance tax exemption for deep horizontal wells. Passed by the legislature in 1994, it seemed like a good idea at the time, as it was encouraging new technology.