American Oil and Gas Reporter - January 2016 - 108

ConventionSection: Louisiana Oil & Gas Association
it to the Gulf and selling it to the heavy
crude market."
This commodity price collapse may
prove as crippling as the 1986 bust, D.
Briggs predicts. In December 1986, 115
rigs were running in Louisiana, he notes,
while there are 60 running today. "Although
it was a different time, we still have far
fewer rigs working in Louisiana than ever.
And we have far fewer drilling permits,"

he says.
LOGA's member companies are reacting to the market by cutting staff, D.
Briggs says. He predicts there will be
more layoffs in 2016.
State Issues
Louisiana's oil and gas industry has
enjoyed a very good relationship with
state regulators under Governor Bobby

Jindal and earlier administrations, Hanks
says. Considering the strong support Governor-elect John Bel Edwards has received
from those supporting the legacy lawsuits
that have burdened oil and gas development
for years, the major worry under the new
governor is who will run Louisiana's regulatory agencies, Hanks adds.
"It is not only from a Democratic
versus Republican standpoint, but there
is the nature of the support behind this
Democratic governor, with the trial lawyers
and the influence they will try to project,"
Hanks says. "LOGA is fearful that it
may get into a situation similar to when
Buddy Roemer was governor. He made
appointments that took many years to
get over. He really hurt the industry with
some of his appointments, under the name
of environmental protection."
In conversations with companies operating in Louisiana, legacy lawsuit concerns remain one constant theme, Hanks
says. Once the new governor is in place,
the industry and its allies fear a cottage
industry of trial lawyers will feel empowered to unleash a new wave of lawsuits
seeking payment for decades-old environmental damages, he indicates.
"The association is bracing for an onslaught of legacy lawsuits from individuals,
and parish and state entities such as levee
boards," Hanks says. "That probably could
be the single biggest blow to industry, and
one that would send companies an even a
bigger red flag to avoid Louisiana."
For offshore operators, Hanks warns
that proposed changes to financial assurance levels represent another challenge.
In August, the Bureau of Ocean Energy
Management proposed revisions to a host
of its risk management programs and
bonding regulations for operations on the
Outer Continental Shelf. BOEM says its
20-year-old regulations have not kept pace
with offshore infrastructure developments.
"I am hearing a great deal of concern
about further limitations on the ability to
participate offshore," Hanks says. "It will
be a real challenge for operators, particularly those on the Shelf who don't have
ultradeep production, to offset these new
expenses. It already was a challenging
environment, and this will further that
immensely. It probably will chase a lot
of people from the Gulf of Mexico." ❒

Coming In February
Special Report:
Gulf of Mexico
108 THE AMERICAN OIL & GAS REPORTER

American Oil and Gas Reporter - January 2016

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