Sept. 14–The phrase used over a generation about Louisiana drilling on shore was “played out,” which was striking for a state with early and big oil exploration ventures going back to the earliest years of the 20th Century.
What a difference American brainpower has made.
The U.S. Energy Information Agency estimates that the United States has likely surpassed Russia and Saudi Arabia to become the world’s largest crude oil producer.
The government agency said that in February, U.S. crude production exceeded that of Saudi Arabia for the first time in more than two decades. In June and August, the United States surpassed Russia in crude production for the first time since February 1999.
This turnabout comes from not only the offshore platforms in the Gulf of Mexico but the onshore wells that have been spurred by development of hydraulic fracturing and horizontal drilling techniques.
For investors, and particularly for oilfield service companies in Louisiana, it’s still been a rocky ride. The oil price fall of mid-2014 cost Louisiana much wealth and many jobs; in recent job statistics, for example, the Lafayette area lost employment over the year from last July, the only region of the state to do so.
And for those who owned natural gas wells, low prices have been an accompaniment to vast new reserves of natural gas available onshore. Now, America is an energy exporter, with giant facilities on the Gulf Coast exporting energy to Asia.
Nor have refiners entirely benefited from the new era: Many engineered their facilities for heavier crudes, feeling that the light sweet crudes of the past were played out. Now, they’re back, as since 2011 the rising production has been in that type of product.
The EIA numbers are estimates from Saudi and Russian sources, so perhaps they are not perfect down to the barrel. But in Louisiana, a vital hub in America’s energy infrastructure, the reality of the turnabout in oil production is still a staggering change from the experience of the last generation or so.
Louisiana’s state budget is not so heavily dependent on energy as it was — once, 41 percent of the state general fund, in the early 1980s. Gambling, or officially gaming, is a bigger contributor to the general fund now, but oil and gas revenues remain a significant source of revenue for schools and colleges and other vital services.
In Louisiana, the Haynesville shale drilling contributed to this boom, particularly in natural gas, but there are other shale plays now being explored by energy interests, including plays near Baton Rouge.
What a difference a technology-driven energy revolution has made.
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