Take a second to look around you. I know you are reading this on some sort of electronic device (we have not hit the printers yet). I assume you are wearing shoes, and probably enjoying a drink in a plastic or printed metal receptacle. Even if you were in the middle of the woods with clothes that you made from scratch with grass or wool, you would still be using three objects which were made in some part from oil or the use of oil in a manufacturing process. Knowing that most objects you use on a daily basis are byproducts from oil, is there any reason why people in this day and age should look towards a new materialistic and energy-producing resource?
Yes and no. Let’s start with the “yes.” From a monetary aspect, the oil and gas industry is a benevolent part of financing all the wonderful aspects of our state. The state government as well as local governments see extra money coming in in large part from taxes collected from different parts of the oil and gas industry. According to a report published by Dr. Loren C. Scott for the Grow Louisiana Coalition in 2018, state taxes collected from the energy industry reached $688.7 million in FY17. Keep in mind this is after the oil and gas decline which started in 2014. Now that the state has their share, one can take a look at the local governments. Local governments collected a total of $382,801,128 in property taxes which were “Energy-Related.” The list goes on and on, and this writer would like to commend Dr. Scott for the detail in the report.
The next facet is looking at how set for success Louisiana is as far as letting this industry become such a provider. As far as total energy production, the U.S. Energy Information Administration lists Louisiana as the 8th most productive state (per 2017 data). In a day and age where Louisiana is number 1 in our hearts but seems to be last in everything else, breaking the top 10 in some category is usually nice. Usually. But the processes that make up that high ranking is partly due to the crude oil (9th place) and natural gas (4th) production. And as great as it is having this abundant natural resource, planning ahead is an integral step that cannot be missed.
If the saying that “Failure to plan is a plan to fail,” is true, then common sense would be to begin planning. Comprehensive plans should be built around actual action items instead of just ideas. For every voice declaring the “need” of weening off of oil as an energy or economic factor, the same voice should also be announcing plans for replacements in terms of the side-effects that a strong oil industry provides. There are other natural resources and industries which can be grown in Louisiana. Having a good plan for one or more of these industries to supplement the financial loss from losing oil and gas is truly necessary to making sense of the change. When the time comes, and with a good plan in place, a switch from oil and gas to these replacements would not inherently be a bad thing.
Lastly, the timeline for this to happen needs to be looked at realistically. We should be able to stretch the oil and gas industry to the end of its economic viability. That does not need to happen in the next leadership change in our state. Or the one after. A well thought plan at the right time can transition Louisiana to another good or better place. Until that happens, we should be pushing on oil and gas to try and keep that cash cow. We should be encouraging and helping the oil and gas industry thrive, especially given our location as a major corridor to offshore plays. Let’s keep drilling, producing, and refining until the fat lady sings.
Sources:
Bayou Observant 