The Louisiana Oil and Gas Industry Growth: An Overview
June 17, 2013
In recent years Louisiana has been seeing a major growth in its oil & gas industry thanks to a confluence of favorable events. Furthermore, Louisiana is poised for an even larger growth in development and production and this high growth trend shows no signs of slowing down anytime soon. This means for the foreseeable future Louisiana will have a major impact on the US Oil & Gas Industry and in turn will also have a significant hand in shaping the energy sector as a whole. These events also play a large role in positively affecting the economy on a national level making Louisiana a major player in the overall petrochemical landscape.
The development of new technologies in drilling and offshore capabilities have had a strong positive effect on Louisiana's oil and gas receipts for consumption and refinement. As these new technologies become available they enable companies to greatly increase the efficiency of their operations, both in terms of yield and cost, making wells that were previously considered unprofitable...once again lucrative. These new technological advances have also allowed previously unrecoverable oil and gas pockets to now be within reach. A good example is hydraulic fracking and horizontal drilling. We will cover these two drilling methods in more depth in upcoming articles.
A big part of the costs associated with the Oil & Gas Industry are the initial expenses, time, and labor that go into it establishing a viable network of pipelines. In Louisiana’s case this is not a problem at all, because Louisiana already has a very strong pipeline network. In fact Louisiana is a major hub and is well connected to other parts of the country. The U.S. Department of Energy even chose two sites in Louisiana as storage facilities for the Strategic Petroleum Reserve. This is a huge vote of confidence for Louisiana’s infrastructure given that there are only four such sites nationwide.
In addition to this Louisiana has a very high capacity for storage. It has 18 natural gas storage facilities which make it among the highest storage capacity in the country. Many of these storage sites are depleted fields and salt caverns which are another ecological advantage of Louisiana from the perspective of the Oil & Gas Industry. Additionally, the Louisiana Offshore Oil Port or LOOP as it is often known, is the only port in the United States which is capable of accommodating deep-draft tankers. This makes Louisiana an important international hub for crude oil import from around the world.
Advanced Refining Capabilities with More To Come
Louisiana already has a very impressive set of sophisticated refineries and industrial plants which make it the destination of many varieties of crude oil, including lower value oil which many other refineries in the nation are unable to use. The advanced distillation that many Louisiana refineries are capable of performing can make this otherwise unusable resource tenable. Louisiana also has one of the largest petrochemical industries in the United states.
Of considerable note is the fact that there are plans underway to create more refineries and chemical plants and to even further bolster Louisiana's oil & gas growth. For example the company Sasol has plans underway to build a Gas-to-Liquid (GTL) and Ethane Cracker Complex in Lake Charles. Additionally the company Virtual Engineering Operations (VEOPS) is working on a 100 million dollar refinery to be located in Oakdale. This new refinery will make a considerable boost to the number of barrels per day that Louisiana is able to produce. Estimates place the figure at 20,000 barrels a day during phase one development and then an additional 20,000 after that.
It is easy to see why Louisiana is not only currently experiencing a major growth in oil and gas but will continue to do so for quite some time. This is very exciting for the energy sector as a whole and could have far reaching rippling effects throughout the economy. Now is certainly the time for the petroleum industry to keep one eye firmly focused on Louisiana for future developments.