Haynesville shale natural gas a 'game changer' for New Orleans region

05 22, 2013 by WWL-TV

Billions of dollars in capital investment and thousands of jobs are now in the pipeline for the region between Baton Rouge and New Orleans.
It's a direct result of what's happening on the opposite end of the state in northwest Louisiana where the most lucrative crop rotations now rotate around a natural gas well.This is the Haynesville Shale, one of the richest gas discoveries in the world.

"Right now it's producing gas. That's being sold across this country. It's a very good well," said Tommy Craig pointing to the wells on his family land in Desoto Parish.

Craig's family owns several of the more than 2400 wells that have been drilled in the Haynesville since 2008.

The most active areas include the parishes of Desoto, Caddo, Bienville, Bossier, Webster and Red River where crews recently built a production rig on Maxie Almond's land.

"All these years I cultivated this land, I worked it and always had in the back of my mind for timberland," said Almond. "But, then the gas came, so it wasn't any use worrying about the timber anymore. The gas was a big deal."

What's driving the natural gas boom in north Louisiana are advances in hydraulic fracturing or fracking. It's a process where by millions of gallons of water, sand and chemicals are blasted deep underground, forcing cracks in the shale, freeing natural gas for collection.

"Naturally, none of us want anything to happen," said Craig. "I would hope that Chesapeake and the other companies that are doing the fracking have studied this out and have done their due diligence on it and know what their doing, so anything won't happen, but nothing's fool-proof."

Serious concerns have been raised by environmental groups about the potential impact of fracking on drinking water and human health.

An industry spokesman says two studies by the EPA were inconclusive. "These studies are not showing any earthquakes directly related to hydraulic fracturing or contamination in the water sources," said Ragan Dickens from the Louisiana Oil and Gas Association.
William Dorrah is president of Community Bank. It has branches throughout the Haynesville Shale territory.
He says despite some environmental concerns, there is generally a peaceful coexistence with gas producers.

"Certainly, the truck traffic and the wells and the occasional accident, the occasional spill that you see here goes with the territory," said Dorrah.

High risk...high reward

Assets in Dorrah's bank have doubled from $165 million before to drilling rush to $330 million today. Land owners and small towns such as Mansfield about 40 miles south of Shreveport have also reaped the benefits of fracking.

In just the past four years, three new hotels have been built there, along with several new restaurants and new school facilities.

"What you're really seeing is a result of private capital and private industry driving the job market and not just the people that are servicing the wells and drilling the wells," said Dorrah. "But, also people living off of the trickle down effect."

The trickle down effect doesn't stop in north Louisiana.

"A new report by the LSU Center for Energy Studies indicates that recent natural gas studies in northwest Louisiana could inject approximately $62.3 billion in capital investment across the state. It's what's fueling a manufacturing renaissance on the river between Baton Rouge and New Orleans.

Dozens of new plants and plant expansions are in the pipeline in the southern Louisiana because of the availability and low price of natural gas.

"That's certainly been a game changer here to make this area more competitive across the world," said Methanex Plant Manager Glynn Fontenot.

The projects include the sprawling Nucor iron and steel mill now rising from a cane field in St. James Parish, South Louisiana Methanol across the river from Nucor, Lockheed Martin with plans to build liquified natural gas tanks in eastern new orleans, Dyno Nobel in West Jefferson and BAFS and Methonex in Geismar.

Fontenot says Methonex is so bullish on the area, it's moving two facilities from South America to Louisiana.

"The change in the competitiveness here in this region is definitely due to the whole shale production technology that's been created and brought into play here."

Back in north Louisiana, land owners say increased demand for natural gas is beneficial for everyone.

"It takes two," said Tommy Craig. "You've got to have a producer and you've got to have someone to buy or someone to use it and the more they can sell down there, the more we'll produce up here."

According to the LSU study, the natural gas discoveries in north Louisiana and the new manufacturing facilities in the state are expected to generate more than 214,000 new jobs over the next nine years.