Louisiana has some of the nation's richest oil and gas reserves and has
developed the capability to refine and deliver these minerals to the
nation.
Since 1901 Louisiana has been producing oil and gas.
In 1933 production starting moving offshore and now comes predominately
from deep water facilities on the federally controlled Outer Continental
Shelf (OCS). Counting
the OCS, Louisiana is currently the nation's #1 crude
oil producer and #2 natural gas producer.
Louisiana ranks #2 among the US states in refining capacity, with
17 refineries. The LOOP deep water oil port
allows supertankers to deliver 12% of all US oil imports to the pipelines. Similar offshore facilities are
being built for Liquefied Natural Gas. Lake Charles already operates a conventional LNG port. Oil and gas storage in
underground salt domes has made Louisiana a valuable contributor to the
nation's Strategic Petroleum Reserve. Linking the production,
import,
storage, and refining is a network of 40,000 miles of pipelines capable of delivering this energy resource to the nation.
Development and operation of this capacity has taken its environmental toll,
primarily on the wetlands along the southern coast of Louisiana. Production including the OCS:
-
Production Oil - 2005 474 million barrels (42 gallons/bbl) worth $28 billion @$60/bbl
-
Production Gas - 2005 4.4 trillion cubic feet at STP @$12 per Mcf worth $53 billion
- LOOP
Oil - 2005 365 million barrels worth $22 billion @$60 per barrel
(3,200 million barrels total imports from all sources to the US)
- SPR Storage - can hold 281 million barrels in La, 380 million more in Texas ($40 billion)
So Louisiana's oil and gas fields including OCS are producing $80
billion per year of oil and gas and importing $22 billion more at
2006 prices. This dwarfs all the other industries in the New Orleans area.
For the damage caused by hosting such a huge industry, Louisiana receives about $800 million per year (less than 1%) in royalties and lease payments. This is far short of the $4-6 billion that Louisiana would receive it it was treated the same as other energy producing states. The Federal Government has been taking $8-12 billion per year in royalties and lease payments from Louisiana production since the 1950's.
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Environmental Damage
: Oil industry environmental damage comes in many forms. Some topics that deserve a look include:
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Exploration and Production
: Onshore and offshore resources have been developed in Louisiana since
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LOOP
: The Louisiana Offshore Oil Port, Inc. (LOOP) is America's first and only deepwater port providing tanker offloading and temporary storage services for crude oil
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MPEH - Main Pass Energy Hub
: Freeport McMoran project to convert their underutilized Main Pass Sulphur mining
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OCS - America's Energy Coast
: Since offshore drilling began in the 1940's , energy production has
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Pipelines
: 40,000 miles of pipelines
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Refineries
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Louisiana's oil and gas production and delivery capability has been
developed since offshore drilling started in 1938. Most current production
now comes from offshore platforms on federal leases more than 3 miles
offshore This is the so called outer continental shelf or OCS region. Over
the years a
network of canals and pipelines has crisscrossed the gulf and the
coastal
wetlands delivering oil and gas to the refineries and interstate
pipeline network.
In 1980 Louisiana added the Louisiana Offshore Oil
Port (LOOP), "the Superport" to its inventory of capabilities. LOOP
allows supertankers to deliver their cargo to Louisiana's pipeline
network without having to enter the river.
In the mid-80 low oil prices coupled with declining production caused
the collapse of Louisiana's oil economy. As this "bubble" burst
fortunes disappeared and major oil companies moved their headquarters
out of state. Most oil production currently comes from the federal
offshore lands more than three miles offshore. Deep water exploration
continues to move bigger rigs farther offshore. Drilling beneath water
measuring 10,000 feet deep is currently underway.
Deep drilling technology, below 15,000 feet uncovered extraordinary
natural gas reserves in the 1975 along a geographical feature called
the Tuscaloosa Trend.
The ability of Louisiana to recapture the cost it incurs in supporting
the oil and gas industry with infrastructure and to repair the
environmental damage caused by exploration and production is the
function of a severance tax and was dealt with in a series of lawsuits
called the Tidelands Cases and several Acts of Congress. As it stands now Louisiana has received and
will receive nothing for OCS oil and gas.
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