Sitting through the local evening news may call for even the happiest Louisianian to reach for an anti-depressant. It seems that bad news is all around. Louisiana is reeling from years of budget deficits, politics grows more and more divided, and Louisiana’s oil and gas industry is being crippled by a get-rich mob of trial lawyers. While this barrage of negativity is frustrating, there are still some things breathing new life into the lungs of Louisiana’s oil and gas sector.
Say what you will about our Commander and Chief and his Twitter feed, but President Trump is everything President Obama was not for the oil and gas industry. 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. Independent oil and gas producers found it difficult to keep the lights on, let alone be profitable.
Shortly after the Trump train made its way into the White House, OPEC had come to a point where it was finding it difficult to operate in a flooded market. They made the decision to close the spigot, and boy, was that a mistake. The OPEC cartel gave the U.S. Shale producers an inch, and we took a mile. Due to our advancement in drilling, we responded with such force that the global price of oil saw a small bump but stayed relatively flat. The overseas producers simply underestimated the American spirit. It seems the same group that tried to push the United States out of the market is now crying “uncle!”
The U.S. Shale boom that we are entering has been a welcomed boost to Louisiana. North Louisiana is the epicenter of all oil and gas activity in the state. What was once thought to be a formation that had ran its course, has experienced a reawakening. Thanks to the pipeline infrastructure, the resurgence of the Haynesville is breathing life into our ports and has led to a long list of new LNG export facilities that are planned.
Between the oil and gas barren lands of south Louisiana and the epicenter of activity in north Louisiana, there is new life. It has been over 20 years since the Austin Chalk has seen any leasing activity, but that all has changed. It is estimated that over 400,000 acres are leased up in the hottest area of the Chalk.
So what is the Austin Chalk?
The Austin Chalk formation stretches from the Sabine River at the Louisiana Texas border, tracking south east across Louisiana and eventually to the Gulf. The chalk lies between 800 to 1,200 feet above the Tuscaloosa Marine Shale and mirrors a similar path as the shale formation. This layering of formations can provide a producer with a possible multilayer play.
In 1996, the Austin Chalk was a driver of economic, infrastructure development and a source of much drilling in Louisiana. It is too early to tell if this formation will be the hot Louisiana chalk play it once was, or will rival the great Eagle Ford Shale, but it seems that there is a reason for optimism for Louisiana’s future.To continue to recovery, we must stop these frivolous lawsuits, stabilize our tax environment, and erase our state’s anti-business sentiment. When the oil and gas industry succeeds, Louisiana follows.