A remarkable rebound for Gulf energy

06 13, 2014 by Lori Leblanc, BIC Magazine

The Gulf of Mexico has long been touted for its wealth of energy reserves and current and projected production activity reinforce the Gulf’s dominance as America’s energy powerhouse. Four years ago, however, this significant economic engine was in jeopardy as the federal government imposed a six-month moratorium on deepwater drilling following the Deepwater Horizon tragedy.

The offshore industry came to a standstill, sending offshore workers home and quickly crippling the oil and gas service companies located across coastal Louisiana. Fearing the drastic impacts on local residents and businesses, our local communities and industry groups worked to achieve a swift end to the moratorium — we advocated for the hundreds of thousands of American jobs dependent on offshore drilling and we pressed the federal government for an improved, efficient permitting and regulatory process that would safely get our men and women back to work in the Gulf.

This hard work paid off when the moratorium was lifted in October 2010. Now, more than ever before, we are realizing the economic and energy potential of America’s Gulf and the future is even more promising. The Gulf continues to be attractive for energy companies due to political stability, proximity to Gulf Coast refineries, and the strong pipeline and production infrastructure in the region. In fact, the Gulf Outer Continental Shelf produces approximately 23 percent of total U.S. crude oil production and 7 percent of total dry gas production.

Here are a few more staggering statistics that demonstrate the remarkable rebound of energy activity and the industry’s confidence in the Gulf:

• Between 2014 and 2019, output from the Gulf is expected to rise by about 26 percent from 1.5 million bpd to 1.9 million bpd.

• Ninety-one percent of recent oil discoveries in the Gulf have taken place in deepwater.

• There are more active drilling rigs in the Gulf of Mexico now than before Deepwater Horizon, with about 60 deepwater drilling rigs operating today.

• These deepwater rigs are expected to bring the large inventory of recent discoveries online, with the top 25 holding more than 5 billion barrels of oil equivalent.

All of this increased deepwater activity has been dependent on implementation of strict new safety and environmental standards, which industry and the federal government have cooperatively developed since the end of the moratorium, making operating in the Gulf safer than ever. Deepwater drilling and production is also dependent upon high-tech rigs and advanced technologies to reach the deepwater regions, which translates to jobs and tremendous economic impacts for small businesses across the country that design, build and service this new equipment.

And nowhere is impact of this rebirth of the Gulf of Mexico more noticeable than right here in Louisiana. Our businesses, residents and communities are on the front lines in serving the burgeoning offshore oil and gas industry, and our economies are some of the strongest in the nation as we fuel America. Communities along coastal Louisiana, for example, are experiencing some of the lowest unemployment in the nation — from 6.4 percent following the moratorium in January 2011 to an amazing 2. 8 percent in February . That’s an economic report that makes us the envy of metropolitan areas around the country.

Louisiana Mid-Continent Oil and Gas Association’s (LMOGA) Offshore Committee recognizes the tremendous value of Louisiana workers and businesses to the Gulf’s resurgence. Our members are focused on continuing industry’s proactive efforts with the federal government on regulatory and permitting improvements, and working with our industry partners to sustain and promote this increased activity in the Gulf. We also support state leaders as Louisiana moves forward on coastal restoration and protection plans and on economic and work force development strategies to ensure our communities and our residents are well equipped to continue to serve America’s energy needs.

The Gulf of Mexico has become and will remain a long-term energy powerhouse for our country. LMOGA and its member companies are proud to be a part of this renewed dedication to American energy in America’s Gulf.