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By Dave Levinthal and Anna Palmer

GROUPS LOBBY OBAMA ON GULF: Nearly 20 groups wrote to President Barack Obama asking him to include Gulf of Mexico drilling as a jobs creator in his speech before Congress tonight.

CEO signatories include: Jim Adams of Offshore Marine Service Association, Luke Bellsnyder of Texas Association of Manufacturers, Barny Bishop of the Associated Industries of Florida and Don Briggs of the Louisiana Oil & Gas Association. Paul Cicio of the Industrial Energy Consumers of America, David Curtiss of the American Association of Petroleum, David Holt of Consumer Energy Alliance and Lee Hunter of the International Association of Drilling, also co-signed the missive sent Wednesday.

“We urge you to make responsible and effective exploration and development of energy resources in the Gulf of Mexico and elsewhere a centerpiece of your jobs agenda,” the association heads wrote. “Getting back to work in the Gulf of Mexico creates jobs all across the United States.”

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Wildfires raging in east Texas prompted Louisiana officials to issue a fire threat advisory for oil and gas operators in the state as the blazes potentially threaten the largest producing natural gas field in the US, reports said Wednesday.

Reuters reported the advisory, issued on Tuesday, calls for all operators covered by state regulators to keep aware of the location of fires and to take “all appropriate steps to prevent fires from coming into contact with active wells, flowlines, gathering lines, pipelines or storage tanks.”

The head of the Louisiana Department of Natural Resources Office of Conservation cautioned energy operators against allowing combustible vegetation, trash and debris within 100 feet of wellheads, production equipment and storage tanks.

The Haynesville natural gas shale bed sits under the northwestern part of Louisiana and spreads into east Texas.

In March, the US Energy Information Administration said the Haynesville was the highest producing shale play in the country, with some 5.5 billion cubic feet per day of natural gas production.

That is roughly 8% of US daily consumption.

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By Robert Ross on September 7, 2011 7:33 am

An increase in revenues and a rise in natural gas prices could bring big money to Louisiana

NEW ORLEANS, La. – Louisiana and other states rich with offshore oil and natural gas are fighting to keep more revenues destined for federal coffers.

As new shale gas plays continue to be discovered in Louisiana, the federal government is seeking to take its slice of revenues in order to help plug its $14 trillion budget deficit.

A proposal, backed by Senator Mary Landrieu (D-LA) and Lisa Murkowski (R-AK), would allow Louisiana and other producing states to keep a 37.5 percent share of oil and gas revenues that would otherwise fall into federal coffers.

At the moment, nearly all royalties and revenues from energy production in federal waters – about $5 billion to $10 billion annually – goes to the U.S. Treasury Department.

However, according to a 2006 law, Louisiana already retains 37.5 percent of severance tax revenues, but wont see any of the money until 2017. Landrieu feels that if other states were given the same economic incentive, they may be more attracted to offshore drilling.

Federal opposition to the revenue sharing plan is palpable, as Senate Energy and Natural Resource chairman Jeff Bingaman (D-NM) staunchly opposes the proposition.

Bill Wicker, a spokesman for Bingaman, claims that directing money to only a few states “doesn’t make sense,” and that the Treasury cannot withstand additional pressure on its finances.

“With the government at risk of default, how could anyone seriously consider blasting an enormous new hole in the Treasury, to the tune of many, many, many billions of dollars.”

Don Briggs, president of the Louisiana Oil & Gas Association, says he would be in favor of severance tax revenue sharing as it would incentivize states to drill off of their coasts. However, Briggs contends that states would be heavily dependent on Louisiana’s pipeline transportation and infrastructure, thus, “Louisiana should still retain a larger portion of those tax dollars, given our risk position in the Gulf.”

An alternate plan, proposed by Texas oil and gas billionaire T. Boone Pickens, attempts to start a new natural gas program whereby commercial trucks, certain auto fleets and vans are converted from diesel fuel or gasoline to natural gas.

In addition, the plan calls for a $1 trillion investment in wind turbine farms to offset the use of natural gas for power generation.

Pickens claims the conversion would enrich natural gas producers, in addition to diminishing the nation’s dependence on imported oil to the tune of $300 billion per year.

Briggs says as long as Pickens’ plan does not include “unsustainable and uneconomical wind power projects” and instead revolves around cost effective and proven technologies like natural gas, he would endorse the plan.

Unconventional drilling methods, such as hydraulic fracturing and horizontal drilling, have drastically increased production, which is expected to quadruple by 2040 according to a recent Baker Institute for Public Policy study.

The increased supply of natural gas has reduced prices, after a period of volatility during 2006 and 2008. Natural gas had traded between $4 and $5 per thousand cubic feet (MCF) on the New York Mercantile Exchange in 2011.

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PennEnergy

By Don Briggs, President of the Louisiana Oil & Gas Association

This Labor Day weekend we welcome the end of summer, and most importantly, we celebrate the social and economic achievements of the American workforce. At LOGA, we focus our thanks and gratitude toward the hardworking men and women that make up the oil and gas industry throughout our state and nation. Through their daily sacrifice and commitment, we are provided access to an abundance of affordable energy that fuels our vehicles, powers our homes, and keeps our nation moving forward into the 21st century.

In Louisiana, we have been blessed with a plethora of energy resources. From ongoing developments in the Gulf of Mexico to the boom of the Haynesville Shale, business and job growth throughout the state has drawn heavily from the energy sector. Recent news of the potentialTuscaloosa Marine Shale and “Brown Dense” formations could mean even further growth and opportunity within the industry for years to come. Louisiana’s economy and employment rates have remained strong in the midst of a significant economic downturn nationwide because of the support and substantial job growth created by the development of these natural resources.

As citizens of this great state, it is our duty to ensure that Louisiana remains a great place to work and grow our families. This is only achievable if our people have access to good paying jobs and our businesses are provided with a level playing field. A healthy job market is dependent on an environment that encourages business growth and development.

Job creation can flourish and we can incentivize businesses to take risks in a system of low tax structure and limited burdensome regulations. Furthermore, an equally important factor in a stable job market is the assurance of a sound legal climate. Unfortunately in Louisiana, our legal climate is deteriorating by the day, continues to discourage investment, and stagnates economic growth throughout the state.

For the oil and gas industry, “legacy lawsuits” hinder energy exploration, production, and expansion. The considerable rise in these lawsuits has lead to job loss, rig decline and exodus, the revocation of insurance, and in worst cases, the bankruptcy of long-standing businesses in our communities.

Frivolous lawsuits plague all sectors of our state’s economy, not just the oil and gas sector. Medical malpractice suits, personal injury claims, and other civil suits are rampant and at an all time high in Louisiana. In a recent article, the Louisiana Lawsuit Abuse Watch claimed, “According to the most recent data from the state Supreme Court, civil filings in city and parish courts shot up from fewer than 73,000 to nearly 90,000 between 2006 and 2009. That’s a 24 percent increase in statewide civil filings over the period—a disturbing trend that we must address.”

Over a decade ago, the state of Texas found itself victim to a deteriorating legal environment where frivolous lawsuits stifled job creation and business investment. Over the last several years, Texas has made tort reform its top priority and instituted a number of laws to curb the influence of predatory lawsuits. The end result has placed Texas on the top of the chart in terms of job creation and economic development. We should learn from their lessons. By revamping our legal system in Louisiana, we can revitalize our energy sector and allow businesses to flourish throughout our economy.

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