Louisiana Wants To Boost Industry

'Hassles' Targeted

Whether deserved or not, the mere mention of Louisiana often conjures up images of Party-Central, along with corrupt politicos ruling via the stereotypical style of good-ol'-boy wheeling 'n' dealing.

But by golly, the powers-that-be are out to dispel this bad rap once and for all.

They intend to accomplish this feat via a master plan for economic development first implemented in 1997 by the Louisiana Economic Development Council.

Dubbed Vision 2020, the initiative is described as a living strategic plan containing a series of benchmarks for education, information technology and industry-specific initiatives to make Louisiana one of the top 10 states to live, work, visit and conduct business by the year 2020.

The recently announced initial five-year update of the master plan is focused on maximizing Louisiana's current strength in oil and gas exploration and production.

"Louisiana is the number two domestic natural gas producer — and number one in oil if you include the OCS," said Bill Fenstermaker, chairman of the Louisiana Independent Oil and Gas Association.

Image Caption

Louisiana Gulf of Mexico Natural Gas Production
Data courtesy of the Louisiana Mid-Continent Oil and Gas Association

Please log in to read the full article

Whether deserved or not, the mere mention of Louisiana often conjures up images of Party-Central, along with corrupt politicos ruling via the stereotypical style of good-ol'-boy wheeling 'n' dealing.

But by golly, the powers-that-be are out to dispel this bad rap once and for all.

They intend to accomplish this feat via a master plan for economic development first implemented in 1997 by the Louisiana Economic Development Council.

Dubbed Vision 2020, the initiative is described as a living strategic plan containing a series of benchmarks for education, information technology and industry-specific initiatives to make Louisiana one of the top 10 states to live, work, visit and conduct business by the year 2020.

The recently announced initial five-year update of the master plan is focused on maximizing Louisiana's current strength in oil and gas exploration and production.

"Louisiana is the number two domestic natural gas producer — and number one in oil if you include the OCS," said Bill Fenstermaker, chairman of the Louisiana Independent Oil and Gas Association.

"You can plot the Louisiana economy on a graph and plot the price of oil and gas, and they correlate," Fenstermaker noted. "Oil and gas is Louisiana, but most people don't recognize it."

The vital role the industry plays in the state's economy was highlighted in a study commissioned by the Louisiana Mid-Continent Oil & Gas Association, which showed the industry generated an economic impact of $93 billion in 2001. The study, conducted by Louisiana State University economist Loren Scott, also revealed oil and gas activity supports 341,519 direct and indirect jobs in Louisiana and is responsible for more than $12.2 billion in household earnings.

Were it not for the onerous restrictions, rules, environmental issues and challenging, costly permitting requirements lobbed at the industry, these numbers conceivably could be much higher. Some oil finders have elected to drill elsewhere rather than become mired in the pricey, complex regulatory maze.

"There's no reason why we shouldn't be pre-eminent in the development of energy resources for the country," Fenstermaker said. "But Louisiana's role has long been ignored by the governmental side who should recognize it as a major strength and do what they can to nourish it and make it stronger."

Vision 2020 has the potential to lead to a vastly improved business environment for the industry, according to Fenstermaker, who has burned considerable midnight oil helping to craft the recent update of the initiative.

He outlined a series of action items approved by Gov. Mike Foster and the LAEDC as part of the Vision 2020 strategic plan:

  • Develop a continuous process for streamlining the permitting process for seismic, drilling, production and pipeline activities, while assisting Louisiana to capitalize on its natural resources. This would help to make the permitting process less onerous and time consuming.

  • Develop an annual report examining barriers to development of energy infrastructure with proposals for eliminating the ongoing barriers.

    To accomplish this, the LAEDC has deployed a member of its team of cluster professionals to recruit oil and gas companies and service companies to the state and encourage them to discuss the barriers that cause Louisiana to be less-competitive. A summary of the impediments will be filed in a report for study.

  • Design a blueprint and funding mechanism for priorities in energy/oil and gas-related technology research. Fenstermaker noted that the state's geographic proximity to deepwater drilling, along with the often-complex deep drilling closer in make it only natural for the universities to play a part in being a research group for industry.

    He said this could address not only oil and gas but alternative fuels as well, including the LNG facilities that have been permitted along the coast.

  • Attempt to control or cap class-action litigation by addressing some type of tort reform in Louisiana as it relates to the scope of environmental and class-action litigation.

  • Promote tax reform for a fair and balanced corporate and business tax structure to promote and provide incentives for capital investment and eliminate duplicative taxes. This is consistent with other parts of Vision 2020 that speak of specific tax reform relative to other industries.

    "Vision 2020 can be effective because it has accountability associated with it," Fenstermaker said. "There are accountability benchmarks in place to measure how the state is progressing on an annual basis in achieving the entire plan by 2020.

    "It also transcends administrations," he added, "so a new government wouldn't start from scratch but would continue with the same plan."

This is particularly noteworthy, given that a gubernatorial election is on tap for this October, heralding the end of Gov. Foster's eight-consecutive-year reign, the maximum allowed.

Even though drilling currently is in a slump in all the producing states, there's hope that Vision 2020 will position Louisiana to reap maximum benefits from the much-hoped-for turnaround.

"When drilling does happen, people have choices, like offshore, international or other states," Fenstermaker said. "Because these choices exist, we must compete and be a viable alternative.

"Louisiana is still a mecca for oil and gas," he said, "but we need to have our house in order so when the people come to do business they can be successful."

You may also be interested in ...