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03 21, 2014 by Renita D. Young, NOLA.com | The Times Picayune
A lack of appreciation and respect for the industry within the state, says Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, is a significant challenge. "It's the attitude and complacency of people saying: 'It really doesn't matter how we treat oil and gas. They're not going anywhere.' That could not be further from the truth."
Briggs and John, along with other experts who attended the Grow Louisiana Coalition's "Energy Outlook 2035" forum, held at the LSU Center for Energy Studies, suggest state and industry officials stay competitive in the economic, regulatory and legal environments to continue statewide industry growth.
While a shale gas boom is poised to make the United States a net exporter of natural gas in the near future, industry leaders said Louisiana must remain committed to a petrochemical industry that financially fuels much of the state.
Mark Finley, BP's General Manager of global energy markets and U.S. economics, said shale gas production will make the U.S. a top exporter of natural gas in 2018, projecting exports will grow to 10.6 billion cubic feet per day by 2035. That's an average of 4.3 percent annual growth between 2012 and 2035, when overall U.S. gas production is expected to be some 45 percent. No doubt, Louisiana will play a significant role in national energy production, responsible for roughly 30 percent of domestic energy production, but the state is increasingly competing with North Dakota, Texas, West Virginia, Pennsylvania, New York, Arkansas, Mississippi and other energy-producing states.
"The days of, 'it's just Louisiana and we have great resources and people are going to come here to drill,' that's not a reality anymore," said Gifford Briggs, vice president of the Louisiana Oil and Gas Association. A lack of appreciation and respect for the industry within the state, says Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, is a significant challenge. "It's the attitude and complacency of people saying: 'It really doesn't matter how we treat oil and gas. They're not going anywhere.' That could not be further from the truth."
Briggs and John, along with other experts who attended the Grow Louisiana Coalition's "Energy Outlook 2035" forum, held at the LSU Center for Energy Studies, suggest state and industry officials stay competitive in the economic, regulatory and legal environments to continue statewide industry growth. The pro-oil-and-gas industry alliance was formed to promote what it says are the positive impacts of the energy industry on the state and its citizens. To that end, the coalition is organizing a series of talks across the state to push its message.
Oil and gas industry critics have been concerned with the environmental impact of the industry on the ecosystem, its impact on the communities it resides in, and how it contributes to the vanishing coastline among other issues. Anne Rolfes, founding director of the Louisiana Bucket Brigade, a New Orleans-based environmental advocacy group said in addition to environmental concerns, "I think one thing the oil (and gas) industry needs to do is take a serious look at its accident rate. That is a real problem for its profitability and operations going forward."
Briggs said officials should first identify the state's key resources and leverage those assets to their advantage. Among those advantages: the Haynesville Shale, Tuscaloosa Marine Shale, Brown Dense Shale, and access to the Gulf of Mexico. "We're competitive because we're going to have the resource," said LSU economist James Richardson, director of the Public Administration Institute. That said, Richardson agrees on a more proactive, competitive approach, adding the trade-off is more costly energy. An economic development advantage for the state is its access to low-cost energy, but Richardson warns "it may be more costly because a few more requirements will be replaced on it."
Industry experts suggest current monitoring requirements and the state's regulatory environment are keys to holding those companies that drill in Louisiana accountable. An advantage to doing business in the state, they said, is essentially a one-stop-shop for permitting and other mandatory requirement, making relocation costs less expensive than in states with both local and state hurdles that must be cleared. On the concern side, is Louisiana's legal environment. Briggs said investment in the state could be hindered by a legal environment that's made the state less desirable for drilling compared with other areas. Recent oil and gas cleanup suits, he adds, have discouraged what could possibly have been more of a plentiful investment in Louisiana.
"I think we need to continue to push Congress," added John, a former congressman who represented Louisiana's 7th Congressional District from 1997 to 2005. "The political fight is going to shape the walls of how we go about producing oil and gas." From a political standpoint, it comes down to a "numbers game," said John. Of the 435 members of Congress, there are about 54 members from states that support and understand oil and gas. By comparison, California, a state John says is not especially friendly to the industry, has 53 members.
"We have to talk about the oil and gas industry as a driver of the economy, jobs and increasing the quality of life to citizens," John said. However John and David Dismukes, associate executive director and professor for LSU's Center for Energy Studies, say a qualified workforce remains the largest need in Louisiana heading into the next few years. Several area groups, including the Baton Rouge Area Chamber and LSU have made it a top priority by offering specialized training, and partnering with other organizations to recruit more out-of-town talent to the Bayou State. "It's everything and how we're going to get everybody to meet these requirements, it's going to be a paradox of riches for us," Dismukes said.
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