Oil and gas companies in Michigan could soon get a tax break for better utilizing wells, and the proposed measure is causing a split among environmental groups in the state.
A state House panel held its first hearing Tuesday on a bill meant to encourage companies not to abandon oil and gas wells once they’re no longer profitable. Supporters of the legislation say it is meant to encourage an extraction method that pumps carbon dioxide into older or low-producing wells to get relatively small amounts of oil out.
“Instead of saying, ‘Oh, there’s 15% of the resources left there – we’re just going to cap it and walk away and find somewhere else,’ where they’re going to into a new pristine area and start drilling again, I’d rather make sure that they get every drop they can out of the places they are developing,” said James Clift, policy director for the Michigan Environmental Council.
Clift says the Environmental Council agrees with the idea behind the bill, but needs to see some technical changes before the group can endorse it.
But in a statement Monday, the Michigan chapter of the Sierra Club said that the measure would be a “handout” to the oil and gas industry, and that it would encourage unsafe drilling practices.