How about a mental visual: Where there were once 17 rigs drilling in north Louisiana in 1997, there are now 60. Meanwhile in the swampy south, 81 rigs have become 53 over the past decade.
The flow of business is easy to track: Land rigs in the south are being relocated to the north, where prospects are bright, and Gulf outfits have been slowly closing up shop in the face of increased costs. "There has obviously been a significant shift of drilling resources in the state," says Mike French, DNR's technology assessment director. "We're seeing everything move out of the Gulf and further north. We also see a 67 percent increase, mostly from natural gas, in the northern part of the state, a region that is the oldest and most drilled up already."
"It's really another state boom up there," he adds.
French describes the scenario as unique to Louisiana, since most other states are "experiencing significant drilling everywhere." Largely, high prices are driving the explosion of activity in north Louisiana, he says, while a slow recovery from the 2005 hurricane season is plaguing coastal parishes.
Don Briggs, president of the Louisiana Oil and Gas Association, a trade and advocacy group, says Louisiana's newfound obsession with natural gas parallels national statistics. According to Baker Hughes, of the 1,781 rigs operating in the U.S., 1,483 are seeking gas over oil. "There's a whole new gas play in north Louisiana," Briggs says, "and while the region has a long history, it's not all drilled up. The drilling is going deeper than ever before: 8,000 to 12,000 feet. Because of high prices, it has become economical to do business up there. If prices stay up, this trend could continue."
As for the Gulf's drilling depression, Briggs argues it has very little to do with hurricanes. He said the number of Gulf rigs has been steadily decreasing because there are "greener pastures out there" and the gulf has become "the number one most expensive place to drill in the world." But it won't last forever. "You're going to see all of that change here before long," he says. "The independents and huge majors are finding deepwater drilling in other parts of the world to be unfriendly, as far as the geopolitics. The Gulf of Mexico is politically stable," as compared to the unpredictable nature of foreign locales like Venezuela, where oil fields were recently nationalized.
Additionally, Briggs predicts the eastern Gulf will soon be opening up and the drilling response could be unprecedented.
These are strange times for Louisiana's energy sector. During a time when state officials are asking for billions of dollars to implement coastal restoration, hurricane protection and flood control projects, the state fiscal numbers are looking better than ever. A money committee recently found another $1 billion surplus, and an increase in royalty sharing with the feds will soon start providing millions on an annual basis.
To add to the heap, the state Mineral Board recently reported that the state's income from oil and gas royalties was $522.5 million, an all-time high, and that the state's total income from bonus, leaseholder, and interest payments was $600.1 million, the highest since 1982. "These figures coupled with severance tax income (not yet completed), and increases in drilling activity, all suggest that times of growth and prosperity are upon us," says Department of Natural Resources Secretary Scott Angelle.
Not everyone is jumping for joy. Many, including Republican state Treasurer John Kennedy, believe Louisiana is partly enjoying a false economy, and the bubble will eventually burst. It's just a matter of time, as oil and gas prices won't stay in the air forever.
David Dismukes, a professor at the LSU Center for Energy Studies, says record royalty income has been driven not only by just high prices, but by increased production as well. The fact that lease sales are generating record income indicates that the industry views Louisiana in a more attractive light today for future energy investments. "These numbers certainly support the conclusion that Louisiana's proactive resource policies, which have streamlined permitting, eliminated waste, and reduced legal and regulatory uncertainty are paying big dividends," he says.
We will be offering our recommendations on the constitutional amendments tomorrow.
The justices did not comment in leaving in place lower court rulings that dismissed the lawsuits against BP and other companies involved in the worst U.S. offshore oil spill.
White registration is down by 7,700 voters while black registration has shot up by 7,100 voters.
Even though it had been rumored for months, U.S. Sen. Mary Landrieu finally pulled the trigger recently on a major campaign shakeup that moved control over to a few Big Easy insiders.
Louisiana's health department says it will seek law changes to stop billing sexual assault victims for exams and tests.
It wasn’t the historic slashes to higher ed funding or the ensuing tuition spikes that recently had LSU’s student body and faculty riled up in collective outrage.
Urgent Care clinics unprepared for Ebola; Nazis collected Social Security; Hawaii dodges a bullet and more national and international news for Monday, October 20, 2014.
Monday's Blogs from the Bog!
Will $400 be enough for the re-election campaign of LPSB's Hunter Beasley to overcome two years of holding our school system hostage and hurting the education of our children all because of a personal dislike of the superintendent?
Saints tight end Jimmy Graham said Friday he expects his playing status in Detroit to be decided by coach Sean Payton on Sunday, shortly before the game.
Lawmakers have sidestepped a decision on whether they accept claims from Gov. Bobby Jindal's administration that the state closed last year's books with a nearly $179 million surplus.
Coming off the high of a fourth quarter comeback against Tampa Bay and a helpful bye week, linebacker Junior Galette sees a real turnaround coming for New Orleans' struggling defense.
Former President Bill Clinton, the Democratic Party's most popular surrogate this fall, is heading to Louisiana early next week for a campaign rally with U.S. Sen. Mary Landrieu.
Time and again you hear people say DA Mike Harson is unbeatable because he's doled out political favors over the past 20 years. But a new lawsuit could end that speculation.
After the season's signature win (so far), here are some helpful tips for Cajun Nation during the conference stretch.
Did the state close last year's books with a surplus or a deficit?
Practicing without limitations on Wednesday, running back Mark Ingram looked ready to return to a New Orleans offense that once again ranks among the NFL's best when the Saints play at Detroit on Sunday.
It’s been decided: Superintendents of Louisiana’s public school system will retain the controversial powers granted by Act 1 of the 2012 session.
Louisiana Treasurer John Kennedy has a bone to pick with the Jindal administration, which recently — surprise! — announced that the state ended the most recent budget year with a $178.5 million dollar surplus.
The messaging battle, however, isn't tied to individual campaign accounts. Third-party groups have poured millions of dollars into advertising.
With her political future in jeopardy, Sen. Mary Landrieu is turning to a natural constituent base in her re-election bid.
Terrance Broadway threw for a touchdown and rushed for 113 yards to lead Louisiana-Lafayette to a 34-10 victory over Texas State on Tuesday night.
Aligned with the party of an unpopular president, U.S. Sen. Mary Landrieu sought to keep her distance from the Obama administration, against claims from her chief Republican challenger Bill Cassidy that a vote to re-elect the Democratic incumbent was a vote for Barack Obama.
Seven people in Louisiana and two others in Mississippi have been arrested in connection with an international online sales scam.
Despite the hype and potential misinformation to have spread in the wake of Mark Cockerham’s recent departure from the LPSB, his candidacy for reelection is still on — now with the backing of the Chamber's Empower PAC.