It has been over one hundred days since Trump took office and in that time, we have seen the Dakota Access and Keystone XL pipeline projects jump started, many regulations from the Obama-era rolled back, as well as a rejuvenation of leasing programs and streamlining processes for permitting on federal land and water. The American people and the oil and gas industry alike have greatly benefitted from Trump’s America Energy First plan.
The optimism that was once sensed has not only been realized by energy producers but has since grown in strength. The proof is in the pudding. In May of 2016, the United State was struggling with only 404 rigs, but as of last week, the rig count has grown to nearly 900 rigs nationwide. Louisiana went from 21 land rigs last year to nearly 42 rigs currently running today.
At first glance, the increase in rigs in Louisiana looks promising, but upon further review, of the nearly 900 rigs in the United States, over 50% of the rigs are in Texas; the Permian Basin alone makes upon 40% of our nation’s total rig count. Louisiana, with our 42 land rigs, accounts for less than 5% of all oil rigs running in the United States. Of the 42 rigs, a dismal 2 rigs are running in South Louisiana. While the United States experiences record growth, we continue to be inflicted by historic lows.
If there is one thing that Louisiana should excel in, it should be in oil and gas. So what’s standing in the way?
Well on May 2nd, numerous representatives of oil and gas companies from all across Louisiana descended upon the Louisiana State Capitol for the 2017 Oil and Natural Gas Industry Day in Baton Rouge. There, oil and gas professionals, executives, as well as legislators were able to discuss recent activity as well the lack of growth in Louisiana.
One executive commented that when traveling into Midland, Texas, nearly a third of the license plates he saw were from the great state of Louisiana. Another local oil company executive said that Louisiana is losing the battle when it comes to retaining an oil and gas workforce and that states like Texas and Colorado are stealing our talented laborers. It was shared among all at the event that while companies look to invest, Louisiana is more often than not scratched off the list due to current litigation against oil and gas companies.
Presently, there are over 400 Legacy Lawsuits, and as of recent, 6 coastal parishes filing suit against oil and gas companies. These lawsuits are detouring future oil and gas investment and forcing the hardworking men and women of the oil and gas industry to seek jobs elsewhere. The opportunity to fix our budget issues and stop the ongoing trend of unemployment is sitting right in front of us.
The federal issues that once plagued the oil and gas industry seem to be on their way out under the Trump administration. The stage is set for Louisiana to drive down the road to recovery, but first we must take the car out of park.