& INDUSTRY LEADERS ARE HAPPY ABOUT IT
President Donald Trump swept the southern United States in the 2016 election – winning Texas, Louisiana, Mississippi, Alabama, Georgia and Florida en route to his lopsided win over Hillary Clinton.
Now in office for 15 months, folks in the oil and gas industry say that President Trump is paying back those votes with reasonable oil and gas policies that are going to help the economies of the South.
Oil leaders applaud Trump’s willingness to work with oil companies, touting that his policies are going to breathe life into an industry that was hurt both by a worldwide supply glut in the past five years and also stiff regulations created by President Barack Obama’s office.
Now, a lot of those regulations are gone and the global supply has been cut. Leaders think it’s almost showtime – a period where the industry can start to see an upward kick.
“Say what you will about our Commander and Chief and his Twitter feed,” said Don Briggs, the President Emeritus of the Louisiana Oil and Gas Association (LOGA). “But President Trump is everything President Obama was not for the oil and gas industry.”
The reason for Briggs’ comments have to do with regulations.
After the BP Oil Spill, the U.S. Government hammered oil and gas – piling regulations onto the industry that were designed to avoid another spill, but which industry leaders say were overkill. Those regulations, industry leaders say, crippled progress as the industry recovered – all at a time that global supply increased, as well. This created a perfect storm where global prices were low and the cost to drill was high, which in many cases, made it almost impossible to be profitable doing business in the Gulf. The results are what we’ve seen locally for the better part of three years – lost jobs, revenues slashed and a Gulf of Mexico that sits as quiet as it has since the last great dip in the 1980s.
Chett Chiasson, the Executive Director of Port Fourchon, said no one wants the oil and gas industry to be safe more than the companies within it. But Chiasson said some of the regulations were not well thought out and that people in the industry were not always consulted.
“It’s overkill in a lot of ways,” Chiasson said during an interview in 2015. “I don’t think the communication is always what it should be and I am not sure that some of the ideas were as well thought as we’d have liked them to be.”
Briggs agreed and said the regulations were like a poison pill that made the industry unsustainable.
“Under the Obama Administration, we experienced an eruption of policies and rules by his cabinet that placed an unnecessary regulatory burden on the way we manage our industry,” Briggs said. “Independent oil and gas producers found it difficult to keep the lights on, let alone be profitable.”
But now, things are heading back in the other direction.
Since taking office, President Trump has slashed regulations on several industries – oil and gas included. President Trump has also explored drilling in more waters, which could create opportunities for business in the future. The decrease in government regulation came at a time when international politics started to reverse, as well.
OPEC has agreed to limit its supply in an effort to stabilize the global price of oil per barrel. As soon as that happened, United States exploration picked up and the country’s market got rolling again.
“They gave us an inch and we took a mile,” Briggs said.
At press-time in mid-March, the price of oil is stable. It’s hovered just north of $60 now for the past several weeks. Forecasts vary, but the consensus is that a gradual upswing will take place over the next 24-48 months. This, of course, would be good locally and is the scenario that many are rooting for.
“We think we are in a better place now than we’ve been in quite some time,” said Mike McCauley, general operations manager of Arena Offshore in Houston at a recent meeting in the area. “We don’t plan to go away anytime soon.”
“When the oil and gas industry succeeds, Louisiana follows,” Briggs added. •