Nathan Wilson | Reporter
A federal court ruling issued Jan. 27 revoked the sale of offshore oil and gas drilling leases in the Gulf of Mexico because of climate concerns raised by environmental activists.
The Biden administration had initially issued an executive action banning additional drilling in coastal waters, but it reversed course after a federal judge from the Western District of Louisiana issued a June 2021 injunction in Louisiana v. Biden, reasoning that the ban harmed states that rely on revenue generated by oil and gas.
The administration then expedited the lease process, arguing that the injunction forced their hand. The auction, completed Nov. 2021, authorized leasing in an area of the gulf larger than Louisiana and Mississippi combined. While only a fraction of the territory was leased, it is the largest lease auction ever conducted in the Gulf of Mexico. Lead by Earth Justice, a coalition of environmental activists brought a new suit arguing that the sale was based on an incomplete assessment of the environmental consequences of further offshore drilling, and their victory in court revoked the leases before they could be developed.
Beyond the effect of reduced investment in oil and gas production on prices, lost employment strikes communities like Natchitoches hard. Natchitoches Parish lies on the periphery of the Haynesville shale, with dozens of its active wells clustered around Black Lake and its northern communities. The employment provided by oil and gas production bolsters small communities that offer limited opportunities.
A 2017 study conducted by economist Loren C. Scott, PHD, placed the number of Natchitoches residents employed in oil and gas production and support activities at 68 with aggregate wages of more than $4.4 million. The analysis updated a 2014 study and reflected a statewide decline in jobs, however Natchitoches saw employment grow over the period. The report notes that the number of workers is an undercount because of the omission of contractors, yet in addition to gauging industry wages of $4.3 billion across Louisiana it estimates the effects on other industries such as manufacturing ($3 billion), real estate ($1.9 billion) and professional and scientific services ($1.3 billion).
A survey of state oil and gas wells conducted by the Louisiana Department of Natural Resources and compiled by LSU identified 94 active wells in Natchitoches Parish, but concern is growing as aging and abandoned wells incur costs while industry employment declines overall. In December, Louisiana applied for federal funds from the 2021 Infrastructure Investment and Jobs Act to cap more than 4,600 abandoned wells across the state at an estimated cost of $401.7 million.
In requesting the funds, the grant application identified 12,256 oil and gas industry jobs lost across Louisiana from Mar. 1, 2020-Nov. 15 2021. As older wells become depleted, awarding new leases in the Gulf could offset job losses on land. To proceed with leasing the 1.7 million acres would require the Interior Department to conduct a new study that includes environmental projections, an unlikely scenario given the Biden administration’s stance on new drilling activity.
Participate in a survey on the Natchitoches Times Facebook page to provide data for an updated count of jobs related to the oil and gas industry in the region. The results will be published in a future edition.
Nathan Wilson | Reporter