Shale play under Central Louisiana has potential, energy advocate says

12 12, 2012 by The Town Talk

The Tuscaloosa Marine Shale will not replicate the frenzy surrounding the Haynesville Shale, an oil and gas executive told the Alexandria Rotary Club Tuesday, but it could eventually prove more valuable.

The Tuscaloosa Shale formation runs under Central Louisiana -- covering most or all of Rapides, Avoyelles and Vernon parishes -- and Southwest Mississippi. It's still in early exploratory phases, but it could yield significant oil discoveries.

The Haynesville Shale contains large natural gas deposits and sits partially beneath Northwest Louisiana. It has been a top-producing shale play, accessed by hydraulic fracturing, or "fracking," and has generated big payments to landowners for mineral leasing rights.

"I think [the Tuscaloosa play] is going to be a big deal," said Chris John, president of the Louisiana Mid-Continent Oil and Gas Association and a former congressman from Louisiana. "It's not going to be quite the heyday Haynesville was, because that was boomtown stuff. People see what happened there and say, 'when is that going to happen here?' That's a bad thing to compare. It's not going to happen here. The economics and environment of the oil and gas industry has changed a lot since then.

"The difference, I think, is Tuscaloosa is going to be more steady. It's going to be slower growth, but with a more sustained period of activity."

TMS has an advantage in that it is expected to contain significant oil deposits, a commodity that fetches a higher price than natural gas. Several companies have pulled their rigs out of the Haynesville Shale as the price of gas dropped.

At the same time, the Eagle Ford Shale in East Texas -- which is considered of a similar age and composition as TMS -- has seen increased activity. John expects some of the activity to eventually shift towards TMS.

John called TMS, the Haynesville Shale and the Gulf of Mexico "Louisiana's trifecta."

"Louisiana is blessed to have the kind of resources we have right now," he said. "We have to take advantage of that."

The Louisiana Mid-Continent Oil and Gas Association is a trade organization representing the oil and gas industry in Louisiana and the Gulf of Mexico. For that industry to flourish, John said, America has to develop a consistent energy policy.

"Every president back to Richard Nixon has talked about it," John said. "Frankly, it's been 40 years and we still don't have a policy that helps us grow and makes us strong. One day it's going to happen, because it's too important."

Setting policy, John said, means recognizing certain realities. Namely, that fossil fuels will continue to be the main source of energy in coming years because the infrastructure exists to tap them, that America consumes over three times as much oil as it produces and that the oil we import often comes from countries that are either unstable or unfriendly.

"We may not like it, but that's reality," John said.

Despite that, John said, "I'm an optimist. I really believe the future in the Gulf of Mexico and the energy future in Louisiana is very bright."

John, who is from Crowley, represented southwestern Louisiana's 7th Congressional District from 1997 to 2005 and served on the U.S. House Energy and Commerce Committee. The Democrat is a former member of the Louisiana House of Representatives, serving from 1987 to 1995, where his committee assignments included the Natural Resources Committee.

John was named president of the Louisiana Mid-Continent Oil and Gas Association in August 2007. Before that he was managing director of Ogilvy Government Relations in Washington, D.C., as a lobbyist for energy interests.