Using insight to craft foresight

11 05, 2012 by Daily Advertiser

A day after America votes for its commander in chief, the head of the National Ocean Industries Association will be in Lafayette to speak about the state of the Gulf of Mexico oil and gas industry — and specifically how the result of Tuesday's election will affect it in coming years.

"We'll see if we have election results," NOIA President Randall Luthi said, referring to the closely contested presidential election. "I think certainly everybody in the industry will want to work together if Obama was reelected. I think there would be far more positive support under a Romney administration. It appears the next four years will be the same as the last four years under another Obama administration."

Luthi will speak at The State of the Gulf of Mexico Oil & Gas Industry, part of the Greater Lafayette Chamber of Commerce's "Food For Thought" Series, at 11 a.m. Wednesday. The Daily Advertiser is the exclusive media sponsor for the event.

NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation's outer continental shelf. Luthi became the association's president in March, 2010.

Since then, Luthi has criticized President Obama for the late adoption of a routine five-year plan for offshore exploration development that failed to open up new areas for exploration.

"Through much of the last 25 years, the east and the west coast was covered with a moratorium against exploration. Both those moratoriums were lifted in 2008," Luthi said. "So this was the first five-year plan that actually had the opportunity to take advantage of lifting those moratoriums and greatly increase the areas."

But that did not happen. Instead, the industry only has access to about 15 percent of the continental shell, Luthi said. That could change under a Romney administration.

"The indication is that President Romney would initiate a new give-year plan within the early, early days in his administration which would at least assume a lengthy comment process through the states," Luthi said. "They're going to look at the federal regulations that come out of the EPA, and want to make sure that those are sensible and not overly burdensome."

In addition, a Romney administration would review the tax structure for the industry and examine some tax exemptions, Luthi said.

Although oil production is up, the increase is because of an increase on state and private land, while federal production is down, Luthi said and a U.S. Energy Information Administration report confirmed. Still, U.S. oil production was the highest since 2003 in 2011, according to EIA.

Under the Obama administration, the industry has been required to pay for federal inspections and has undergone changes in the permitting process in the wake of the Deepwater Horizon spill. The permitting process now has 100 pages of background material, up from 20, and can stretch into a year because of new safety regulations, Luthi said.

Despite issues with the Obama administration, Luthi described the oil and gas industry as "getting better" after two very difficult years, feeling both the effects of the economic downturn in 2009 and the fallout from the Deepwater Horizon oil spill in 2010.

Since then, the industry has been recovering.

"It appears that it is headed in the right direction. There's more drilling rigs set to return to the Gulf permitting various activities, whether it be approval of drilling or exploration plans. That pace appears to tick up. I think everyone is cautiously optimistic that everything is looking good," Luthi said. "The years of 2006 and 2007 were very good years in the Gulf of Mexico. Congress allowed certain incentives for companies to look in the deep waters in the Gulf of Mexico and those discoveries are starting to pay off. We haven't reached the 2007 level but there is the potential to do so."

Before becoming NOIA president, Luthi served as the director of the Minerals Management Service from July 2007 through January 2009 under the Bush Administration. Immediately before directing MMS, Luthi served as the deputy director of the department's fish and wildlife service.

An attorney and rancher from Freedom, Wyo., Luthi has held various positions ranging from Wyoming Speaker of the House, to director of a federal agency, to legislative assistant in the U.S. Senate, to an attorney at both the Department of the Interior and the NOIA, where he worked on natural resource damages following the Exxon Valdez accident.

Luthi's career in the Wyoming House of Representatives began in 1995 with his name being drawn from a cowboy hat by Governor Mike Sullivan to declare him the victor in a tie vote. He served as Speaker of the House in 2005 and 2006.