TEXAS OIL REGULATOR CALLS FOR STATE TAX BREAKS

  Texas Railroad Commissioner James
  Nugent, saying that the ailing oilpatch cannot wait for
  Congress to act, today urged Texas state lawmakers to adopt
  incentives to find new oil reserves and to exempt severance
  taxes on oil produced from stripper wells.
      Nugent said in a speech to the Texas house of
  representatives that the state must take the initiative in
  molding U.S. energy policy and finding new ways to assist
  troubled oil producers.
      His proposal to revitalize Texas' oil industry would exempt
  stripper wells that produce 10 barrels of oil or less each day
  from the state's 4.6 pct severance tax. He said that the
  majority of Texas' oil wells fall within the stripper well
  category and a price swing of two to three dlrs a barrel can be
  crucial in determining if the well remains in production.
      Nugent also called for state lawmakers to exempt new
  wildcat wells from the state severance tax for up to five years
  as a financial incentive to explore for new oil reserves.
      Secondary and tertiary oil production, expensive methods of
  production that inject water or gas into the ground to recover
  oil, should also be exempted from the severance tax, Nugent
  said. His plan would exempt existing secondary and tertiary
  wells that produce at a rate of less than three barrels a day
  for three years, or until the price of oil reaches $25 a
  barrel.
      "We've been sitting back and waiting on two federal
  administrations to develop a coherent energy policy for the
  nation to follow. I say we have waited long enough," Nugent
  said. "In other words, let's tell Washington to either lead,
  follow, or get out of the way."
      Nugent said that the financial losses to the state treasury
  by exempting marginal oil production from state severance taxes
  would be more than made up by stimulating new business for the
  oil supply and service industry.
  

