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Louisiana Legislative Action on Energy Praised

Louisiana Department of Natural Resources (DNR) Secretary Scott Angelle applauded the recent work of state lawmakers on energy and economic development in the Pelican State.

Lawmakers during their most recent legislative session, which adjourned June 4, passed "a compromise plan for dealing with issues arising in remediation disputes involving oil and natural gas production sites," Angelle said, referring to the so-called legacy lawsuit issue (see Daily GPI, May 29). "Going forward, we have provided transparency in the process, accelerated clean-up of environmental problems and protection for innocent parties from punitive damages," Angelle said.

The legislature also created a law to govern the state commissioner of conservation's regulation of ultra-deep oil and natural gas wells drilled to tap into reservoirs at 22,000 feet or more below surface.

"Even as we have seen the rapid growth of exploration of shale plays in Louisiana and other parts of the nation, the energy industry has begun investing in the potential of oil and natural gas production at greater depths in areas of South Louisiana thought to have been too mature for new major projects -- including Chevron's drilling of the two deepest wells in the history of the state in Cameron Parish," Angelle said. "The new law dealing with ultra-deep' drilling units will give oil and natural gas exploration companies confidence in their ability to get a return on their investments..."

Additionally last session, legislation codified into law the state's existing fluid disclosure requirements imposed on operators performing hydraulic fracturing well stimulation. The regulations were issued last year by the state's Office of Conservation. While Louisiana was among the first states to create administrative rules requiring operators to publicly fluid contents, "putting those requirements into law sends a strong message that Louisiana is a leader in the nation in ensuring responsible development of oil and natural gas resources," Angelle said.

Lawmakers also addressed the monitoring and coordination responsibilities of the state's Ground Water Resources Commission in conjunction with the Office of Conservation, to include both surface and ground water as the Water Resources Commission. "As chairman of the Ground Water Resources Commission, I was proud to be able to present the legislature with the commission's study on ground and surface water issues and recommendations – addressing ground and surface water for the first time in our state in a comprehensive approach," Angelle said. "Now we have the opportunity to develop a comprehensive planning and management process with the changes made in the mission and membership of the Water Resources Commission."

In a recent editorial, Don Briggs, president of the Louisiana Oil & Gas Association, argued that the state and federal governments as well as Louisiana's parish governments need to work together in regulating oil and gas activity. Too much regulation at the local level, he warned, will stifle development, particularly in the emerging oil- and gas-rich Tuscaloosa Marine Shale (TMS) in the central portion of the state.

"With the increase in drilling in central and South Louisiana due to the TMS, many parishes that have not experienced much drilling are now seeing action," Briggs said. "As the rigs and the workers show up in the parishes, so do the parish ordinances. While the parishes typically have good intentions of protecting their water, roads and land by enacting new parish ordinances, in some cases, they are simply stifling economic development. With over 20 different shale plays in the United States, companies can be more selective as to which play fits their exact needs."

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