The Louisiana Oil and Gas Industry Growth: Natural Gas

The Louisiana Oil and Gas Industry Growth: Natural Gas

Louisiana plays a major role in the US Natural Gas Industry. The state benefits from a number of distinct advantages both in terms of its natural resources and ecology as well as its highly developed infrastructure and considerable storage capacities. In fact Louisiana is booming in terms of its natural gas production. There are a few major aspects that have created this opportunity for Louisiana to achieve prominent natural gas stature…in turn creating a significant influence on the rest of the nation, especially in the energy and manufacturing sectors.

High Production, High Consumption

Louisiana is one of the highest natural gas producing states as well as one of the highest natural gas consuming states. In terms of production, Louisiana is the second highest producer in the nation. It is behind only Texas in terms of the amount of natural gas produced. The highest natural gas production areas in Louisiana are located in the northern and southern portions of the state; however, a considerable amount is also recovered from offshore sources. Apart from the inherent abundance of the natural gas itself within Louisiana, the amount that is being recovered has risen sharply as a result of advances in drilling technology, such as hydraulic fracturing. These new methods have enabled wells to recover natural gas from harder to reach areas that weren’t previously possible.

In addition to being a major natural gas producer, Louisiana also has a very high rate of natural gas consumption. The reason for this is that Louisiana has a very high concentration of chemical plants and refineries, which utilize a large portion of the natural gas being produced. This can be seen as positive, however, since in turn it results in more valuable fuels and products. Louisiana’s manufacturing section also requires natural gas as its fuel source, and many residential homes in Louisiana use natural gas as their primary heating source.

A Pipeline Hub

Louisiana has a vast network of interstate pipelines in place to receive, store, and ship a huge amount of natural gas. A good example of Louisiana’s excellent pipeline infrastructure is the Tiger Pipeline completed in 2011. This pipeline stretches 195 miles long and connects with seven interstate pipelines. It originates in Carthage, Texas, and extends to Delhi, Louisiana. This is just one major example of the type of pipeline network that Louisiana utilizes.

Because of the overall infrastructure including ports, refineries, chemical plants, and other manufacturing and industrial resources, Louisiana has become a major hub in the natural gas industry itself. It has four natural gas marketing centers: The Egan Hub, The Henry Hub, The Nautilus Hub, and The Perryville Center. Of these four hubs, the Henry Hub is the primary one and the most important. In fact the Henry Hub is the most active and most publicized natural gas market center in all of North America. It provides access to markets in the Midwest, Northeast, Southeast, and it also connects with nine interstate and four intrastate pipelines.

Storage

Another major factor setting Louisiana apart from other states in terms of its natural gas prominence, is its storage capacity. Louisiana has 18 natural gas storage facilities. This gives it the highest storage capacity in the country. Part of the reason it has such good storage facilities is due to the fact that many of the storage locations consist of depleted fields and salt caverns. These are very effective locations for the storage of natural gas. Natural gas storage is very important because typically Louisiana will do most of its storing during the summer months when demand is low, and then remove some of the gas from storage in the winter months when demand is high. This has enabled Louisiana to help meet the energy demands of the greater US.

Liquid Natural Gas (LNG)

Liquid Natural Gas (LNG) is a very important part of Louisiana’s overall natural gas situation. That is because due to the high demand for natural gas in Louisiana, in order to offset any potential deficits between production and consumption, Louisiana imports some natural gas from overseas. The natural gas that is imported is typically in the form of Liquid Natural Gas (LNG) because this form of the substance is much easier to efficiently store and transport. In order to facilitate this importation Louisiana has one offshore LNG import terminal and three onshore LNG import terminals, more than any other state in the US. Louisiana’s onshore LNG terminals are located at: Lake Charles, Cameron Parish, and Hackberry.

The many natural gas resources and capabilities that Louisiana has makes it unique in the United States and allows it to fill a very crucial role in the US energy sector. As technologies continue to improve, so too will the demand for natural gas. This obviously has positive effects on Louisiana’s economy, but it will also almost certainly be of major benefit to the overall US economy and quality of life.


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