Oil & Gas

DNR Secretary stresses importance of energy industry at Police Jury convention

Louisiana Department of Natural Resources (DNR) Secretary Scott Angelle on Thursday told a gathering of local governmental officials from around the state the Louisiana’s oil and natural gas industry is still a vital and growing part of the state and national economy.

Angelle, addressing the 86th Annual Police Jury Association of Louisiana convention, held at L’Auberge du lac Hotel in Lake Charles, told the audience that Louisiana’s oil and natural gas exploration industry is setting the pace for the nation.

“Our great state has always been a leader in energy production,” he said. “That industry has been an economic mainstay for our state as our nation has dealt with an economic downturn in the past 18 months.”

While the overall rig count in the U.S. has been recovering from a sharp drop in late 2008 and early 2009, it is still only 4 percent higher currently that it was at the same time last year, up from 1,300 rigs to 1,345.

Louisiana’s current rig count is 27 percent higher than it was at the same time last year, up 56 rigs to a total of 207.

The state’s rig count on Louisiana land and water is 170 – a level of activity not seen since early 1986.

“We appreciate the efforts Secretary Angelle and his staff continue to make to reach out to local government to help us deal with the new issues that have arisen with the renewed successes in our oil and natural gas industry, and to understand where we fit in the state and national energy economy,” said Roland Dartez, executive director of the Police Jury Association.

Angelle said a primary driver of the oil and natural gas economy has been the activity in the Haynesville Shale natural gas formation in northwest Louisiana.

Rig counts in the Haynesville Shale area account for about two-thirds of drilling in the state of Louisiana.

“There is oil and gas to be found in many places in this country, but we see that exploration companies have been choosing to do work in the state of Louisiana,” Angelle said. “While we will obviously never sacrifice our stewardship responsibilities to our environment and our people, we work hard every day to ensure that we encourage responsible development of our natural resources.”

The benefit, Angelle noted, has been realized strongly at the local level in north Louisiana – where the Haynesville Shale- area parishes have seen marked increases in property tax collections tied to natural gas exploration activity.

A review of the total taxable amounts of oil and natural gas-related infrastructure in Haynesville Shale parishes shows that Bossier Parish rose 60 percent from 2007 to 2008, Caddo rose 86 percent, DeSoto rose 81 percent, Red River rose 187 percent and Sabine rose 66 percent.

Parishes have also seen their sales tax collections rise due to the exploration activity, such as DeSoto Parish, where a six-month stretch of sales tax collections matched the entire previous year.

Angelle pointed out that the state Legislature’s top economist, Greg Albrecht, had recently reported to the state’s Revenue Estimating Conference that “Mineral revenue has been the primary bright spot in Fiscal Year 2010.”

“The continued responsible development of Louisiana’s mineral resources is not only a benefit to government and business, but means continued potential growth for job opportunities for the people of the state,” Angelle said.

A  Haynesville Shale economic study by economist Loren Scott included the job impact of the Haynesville Shale in northwest Louisiana – covering the last six months of 2008 through February 2009 – and showed that the Haynesville exploration activity shielded the northwest Louisiana job market from some of the worst effects of the 2008 economic slowdown.

Historically, because of the economic makeup of the area, the Shreveport-Bossier area has tended to closely track national economic downturns, often falling off harder for a longer period of time than the nation overall. From January 2008 to February 2009, the national employment had fallen 3.2 percent, while the Shreveport-Bossier area fell by only 0.6 percent.

“A robust energy exploration industry means demand not only for jobs on drilling rigs and with exploration service companies, but for the people who help provide food, fuel, homes, clothing and services to those who work in the industry,” Angelle said.