310Lect13
First American discoveries
were in Pennsylvania and were of limited use (demand wise)
Jennings, LA was the first
site where oil was discovered in LA
Most of the early
exploration was associated with Salt Domes, because that’s where several early
discoveries were made, even though it didn’t make a great deal of sense
geologically to drill on the top of them.
North Louisiana was better
developed early on (1904) near Caddo Lake.
Most of the early
development and the best sources were on the Sabine uplift.
South Louisiana’s oil and
gas industry does not develop until the depression era.
Off-shore drilling begins
in the mid-1930s, but only in shallow water.
Any further than 3 miles
off the shore is federal. Although LA
cannot tax this production, there are considerable multipliers associated with
this offshore production.
Recently, greater
exploration has returned to North LA.
Partly this is a response to new geologic evidence, but also a response
to the vast expense associated with off-shore exploration.
Smaller fields in the
north.
5.7 billion barrels believed
to still be available, making LA 4th to CA, AK and TX.
Baton Rouge, although it
does not have any natural gas or oil has become a major refining center because
of its advantageous location as the nearest port to the production fields.
Lake Charles has also
become an important refining area.
Louisiana has a transport
advantage over Texas, which is the other large refining and petrochemical and
has better reserves of both oil and natural gas.
Plastics, chemicals and
solvents of many sorts
Dozens of other linkages
that are small, but an important source of employment include:
Transportation, geology
work, research, legal work, ship building, dock working, pipeline construction,
housing etc.
Morgan City is a major
drilling rig construction zone, with considerable export potential.
Already have lost some
10,000 jobs to depletion of resources.
Could have a situation where many more shut down. Many companies have reinvested in LA, making
the short-term prospects good, especially since the transportation costs of petroleum
are low.
Petroleum extraction may
contribute to subsidence
Coastal and marsh
destruction aided by the exploration and drilling processes in the coastal and
near coastal areas. The construction of
canals is particularly damaging.
From $36/bbl down to
$10/bbl in 1987 from a peak in 1982.
165,000 directly employed…50K
lost in the bust.
New Orleans, 1/4th
of the workers involved in petrol industries.
During the early 1980s,
Louisiana had moved up to 34th in per cap income, but fell back to
47th in the late 1980s. It
was 39th in 1995.
Severance Tax is what the
natural resources tax is called.
The large percentage of the
state budget that is contributed oil taxes has historically kept income taxes
etc. very low.
In 1983, severance taxes
contributed nearly 1/3 of the state's revenue, in 1996 it was only 7.3 %
The majority of the
difference has been made up in sales taxes and income tax.
Gambling has helped some,
but cuts have been made elsewhere.
Reserves are known to be
about 31 trillion cu/ft, and most of it is offshore.
Natural Gas was not used
effectively and openly wasted or burnt off during the early years.
In 1916 gas was better used
and a field was struck near Monroe. (6
trillion cu/ft so far)
The off-shore gas fields
are impressive. More than half of the
potential production down there is in gas.
Bateman Lake and Bayou Sale
both have impressive reserves (3 trillion cu/ft so far)