Louisiana Offshore Oil and Gas Activity
Eighteen percent of U.S. oil production originates in, is transported through, or is processed in Louisiana coastal wetlands with a value of $6.3 billion a year. Almost 24 percent of U.S. natural gas production originates in or is processed in Louisiana’s coastal wetlands with a value of $10.3 billion a year.
Louisiana’s OCS (outer continental shelf) territory is the most extensively developed and matured OCS territory in the United States. It has produced 88.8 percent of the crude oil and condensate and 83.2 percent of the natural gas extracted from all federal OCS territories from the beginning of oil and gas exploration and development in the U.S. through the end of 1996.
As of December 1998, Louisiana offshore leases totaled 5,363, with more than 27 million acres under lease, 130 active drilling rigs, 4,489 producing oil wells and 3,813 producing gas wells.
Our latest annual production data for 1997 shows that 353,846,995 barrels of oil and 3,881,352,353 MCF (thousand cubic feet) of natural gas were produced. Between January and July 1998, oil production was at 227,282,332 barrels, with gas at 2,281,832,468 MCF.
As of October 1998, there were 3,439 platforms in the Gulf off Louisiana’s coast.
In 1997, oil and gas production was valued at a combined total of $18.6 billion, with federal royalties totaling $2.9 billion.
Recently, the oil and gas industry has rebounded from a downturn in the 1980s. The main reasons are the discovery of oil and gas in deepwater fields of the central Gulf of Mexico, deepwater royalty tax relief, and new and improved technology used to extract oil from the deepwater Gulf.
Industry leaders are expressing a new optimism, and the frantic pace of drilling is breaking old records. The deepwater Gulf of Mexico has emerged as the country’s most significant oil and gas province, and some estimates say within the next four to five years as much as 30 percent of the country’s total domestic output will originate from the Gulf of Mexico.
Market analysts predict this intense level of exploration could last 10 years. The success of Louisiana’s oil and gas industry contributes billions to the state and national economies every year. Offshore companies paid about $2.4 billion to vendors and contractors in 165 Louisiana communities in 1992 alone. Nearly 4,000 vendors serve offshore operations and employ 55,000 people, and more than 30,000 are employed offshore.
Louisiana’s oil and gas industry has made multi-billion dollar investments in oil exploration throughout the coastal wetlands.
What’s Causing the Problem?
Several factors contribute to Louisiana’s burgeoning wetlands problem.
Some of the most prominent are explained briefly below.
Levees
Levees confine the Mississippi River to its current path, preventing the
annual spring flooding that deposited invaluable sediment and nutrients to
wetlands.
Channeling
Over the last 200 years, industry and residents alike have cut numerous
channels and canals through the wetlands for transportation and oil
exploration. These channels provide a ready pathway for tidal exchange and
the movement of unnatural water patterns, ultimately increasing erosion and
wetlands demise.
Rising Sea Level
A world-wide rise in sea level has been occurring for the last several
decades. While this is a natural planetary process, the problem is
exacerbated by the heavy amount of channeling in coastal Louisiana. With more
channels, salt water has more avenues for invasion.
Saltwater Intrusion
The result of rising sea level and channeling is saltwater intrusion.
Freshwater and brackish coastal wetlands are very complicated ecosystems. The
intrusion of foreign substances, like too much salt water, can offset the
balance and rapidly destroy wetlands.
Subsidence
Subsidence is a natural process of ground settling. In wetlands systems,
subsidence is typically offset by the accumulation of new sediments during
spring floodings. But because spring flooding no longer occurs, new sediments
don’t accumulate, and subsidence gains the advantage.
Barrier Island Loss
Louisiana’s barrier islands are the first line of defense against
hurricanes and tropical storms. As they have degraded over time, their
protective nature has grown weaker. Additionally, the islands are key habitat
for several wildlife species.
Port Fourchon is the geographic and economic center of offshore drilling efforts along the Louisiana Gulf Coast. More than $700 million in public and private investments have been made in the complex, and the port will provide support to 75 percent of the deep-water drilling prospects in the Gulf. Its tonnage has increased 275 percent in the last five years, and it is anticipated to double again within two years. It handled more than 30 million tons of cargo in 1996.
More than 6,000 people currently depend on the port as an avenue to and from offshore facilities, and more than 13,000 people depend on it for jobs, supplies, facilities and as a hurricane evacuation hub to safer locations north of the coast. Most of the major and independent oil and gas companies operating in the Gulf have a presence at Port Fourchon. On any given day, more than 1,000 trucks are unloaded and loaded there, and pipe yards, shipyards, platform construction facilities, service bases and barge terminals within the immediate service area of the port are working at or near capacity.
Less than 20 miles southeast of Port Fourchon is the Louisiana Offshore Oil Port (LOOP), built by a group of major oil and pipeline companies. It serves as the central unloading and distribution port for all incoming supertankers to the Gulf region. The supertankers offload crude oil into LOOP’s offshore pipeline continuously. The oil is then piped north to Lafourche Parish where it is stored and piped to markets all over the country.