American Oil and Gas Reporter - April 2020 - 81

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ConventionCoverage: Louisiana Oil & Gas Association

Louisiana Oil & Gas Association President Gifford Briggs (left), and Tyler Gray, president
of the Louisiana Mid-Continent Oil & Gas Association, participate in a fireside chat to
close out the associations' joint meeting, held at the Golden Nugget Hotel & Casino.

is ineffective, pointing to the money and
power possessed by Louisiana's trial
lawyers. Waguespack said some also
argue the state's residents had become
too comfortable with the status quo.
"If we are ever going to write the book
in Louisiana, it is this moment, with this
legislature," Waguespack extolled. "We
cannot waste this opportunity. It has to be
real people weighing in saying 'let's do
this.' Legislators want to know if people
really care and will back them up."
Louisiana's oil and gas industry faces
a range of challenges, but Bryan Milton,
president of ExxonMobil Fuels & Lubricants Co., asserted the industry's employees were not an issue. "The workforce
is a shining light, and that is something
that you want to nurture, protect and
grow at all costs," he said. "From the
technical college systems to the universities, we have great talent, with great
capabilities."
Although the widespread litigation in
Louisiana makes it look as if business is
not welcome, the state's regulatory environment continues to have a positive impact
on industry activity, he praised, noting in
particular the Department of Environmental
Quality's permit processing. "We just need
to make sure that in the noise of social
media and everything else that we keep
our eyes on the smart decisions based on
science and the actual regulations, and
based on common sense, rather than noise
and activism," Milton urged.
"We are very proud of the opportunity
to work with you, and the LOGA and
LMOGA organizations together, to get
the strength and unity together to help
continue that dream," he said. "We have

investments now on the table that we are
thinking of, like many of you. We just
need to have that certainty to make those
decisions."
Mfon Usoro, an upstream research
analyst at Wood Mackenzie focused on
the deepwater Gulf of Mexico, analyzed
industry conditions for the offshore sector,
predicting Gulf drilling activity would
remain flat in the near term while production continued to increase because of
efficiency gains by operators. Her forecast
in early March called for annual investments to stabilize at $10 billion.
During the next five years, Usoro said
she expected operators to target more
complex, deeper subsalt finds, especially
Paleogene formations. The technology
to exploit high-pressure drilling in Lower
Tertiary plays and equipment able to handle bottom-hole pressures exceeding
20,000 psi now is available. She offered
a scenario where more than 2 billion barrels of oil equivalent could be produced.
Fireside Chat
During the 'fireside chat' that ended
the joint meeting, LMOGA President Tyler
Gray reported that, in addition to seeking
a legislative fix to the ongoing crush of
lawsuits attacking coastal permits, the two
associations were discussing self-reporting
infractions or violations with the Department of Environmental Quality.
HB 615, introduced by Representative
Stuart Bishop, R-Lafayette, would provide
a level of confidentiality when operators
self-report, Gray described. He noted
that under state law, if an agency was
evaluating an incident, it could include
evidence of other problems in its inves-

tigation, possibly increasing the ultimate
penalty. "Basically, you cannot use incidents such as mislabeled barrels or other
minor details that may have fallen through
the cracks but were self-reported in order
to be corrected," he said.
Orphan wells remain a problem in
Louisiana, acknowledged LOGA President
Gifford Briggs, adding that both associations were working toward a resolution.
He asserted a major concern was the
state's fiscal handling of its orphan well
program. Oil and gas operators contribute
more than $4 million annually for well
plugging, but the state now was taking
20% of those funds, terming those dollars
an "administrative cost."
Briggs said the associations were
studying how Oklahoma handled its well
abandonment program. He noted that the
effort there was led by the industry, with
the Oklahoma Energy Resources Board
using a voluntary assessment on oil and
gas paid by producers and royalty owners.
"That is something we want to bring
to Louisiana," Briggs said. "We are looking
at a two-year approach. In year one, we
want to put a board in place made up of
industry people: experts in site remediation,
and plugging and abandoning wells. It
will be responsible for developing a policy
needed for this to be successful and looking
at the challenges we must navigate. The
following year, we will move the resources
at the Louisiana Oilfield Site Restoration
Commission over to this board, so industry
can manage it and address the issues." r

The Louisiana Legislature must pass tort
reform, even though many in the state
believe trial lawyers have the money and
power to block any such efforts, warns
Stephen Waguespack, president and chief
executive officer at the Louisiana Association of Business & Industry.

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