The oil and gas industry in Louisiana and the Gulf Coast is pressing on to provide for the nation, and the world’s, supply of desperately needed energy.
One of the counterproductive decisions from President Joe Biden is a “pause,” which may be longer than that word applies, on lease sales in the Gulf of Mexico.
It makes no sense because the economy of the nation, and that of the world, is poised for a big recovery after vaccinations blunt some of the harsh impacts of the coronavirus pandemic.
The Broadway song said that money makes the world go round.
Our reality, despite the promise of renewable energy sources, is that oil makes the world economy go round.
And in the Gulf, oil can be produced in a more environmentally responsible fashion: Production offshore is less carbon-intensive because there are more restrictions around flaring and venting gases, and the giant drilling platforms run on natural gas as opposed to diesel generators.
One of the most knowledgeable veterans of Gulf drilling is Rick Tallant, of Royal Dutch Shell. He said that in today’s economic recovery, the impact of President Joe Biden’s “pause” in Gulf leasing is not immediate, because of prior leases held by Shell.
"We still think that we'll be here for decades to come," Tallant said in an interview. "There's still a lot of running room in the Gulf of Mexico, the margins are very good for our investors and the greenhouse gas intensity is arguably the best in the industry."
Like just about every big energy company, Shell is concerned about the long term and making the foreseeable transition to other sources than oil and gas. But we see this transition as a long-term prospect, indeed, far beyond the length of any “pause” in lease sales this year under the new administration.
The transition has vast implications for Louisiana’s economy in particular. Our state is the launching pad for energy for the nation and the world, the last in particular now prominent as exports of liquefied natural gas go to countries across the globe.
It is a complex web of suppliers and workers. It can be dangerous. We just marked the 11th anniversary of the Macondo well explosion. A lift boat recently capsized off our coast with lives lost.
Ultimately, the targeting of offshore oil by the administration can be a serious drag on Louisiana’s economy, as some small businesses pointed out in this newspaper. That is a worry, but far beyond our boundaries the policymakers should worry that energy supply might be crimped just as the world economy gets back on its feet.
Louisiana’s energy producers can fuel recovery, if they are allowed to.