The energy transition will happen offshore, but not without drilling
Written by Owner and CEO Paul Danos, you can view the original column in The Advocate.
The offshore oil and natural gas industry is the lifeblood of coastal Louisiana’s economy. The oil and gas industry has a $73 billion impact on our state, supports nearly 250,000 jobs, and pays $4.5 billion in state and local taxes. These benefits are a product of Louisiana’s vibrant ecosystem of small- and medium-sized businesses and contractors who provide goods and services for energy development in the Gulf of Mexico.
That’s why poor policy decisions have had – and will continue to have - a negative effect on our state. Over the past two years, the global pandemic reduced demand, causing oil and gas companies to slow production plans. Then President Biden stopped lease sales for oil and natural gas in the Gulf of Mexico. The federal lease ban has created even more uncertainty around the future of U.S. domestic energy production. Unless President Biden brings back offshore lease sales in the Gulf and ensures timely access, coastal communities will face significant impacts.
Danos has supported the offshore energy industry for all 75 years of its existence. We employ nearly 2,500 people in South Louisiana. Ending or reducing lease sales in the Gulf of Mexico will directly impact the future of South Louisiana and the families who work in the oil and gas industry. These decisions will affect the entire country as well by increasing carbon emissions through the outsourcing of production, sending jobs overseas, raising the cost of energy for Americans, and removing the largest source of funding to restore and protect our Louisiana coast.
Like many of the businesses that service the oil and gas industry, Danos is excited for the future of domestic energy production because offshore oil and gas service companies are also leading America’s energy transition. Our country’s success on the path forward towards climate progress depends on the Gulf of Mexico’s ability to continue to produce low carbon oil and gas and to lend our expertise to emerging energy segments. Danos is already involved in renewable energy development across our nation, and we are ready to do more.
The strategic deployment of innovative technologies across the energy sector is being built, in part, by Louisianians. The same companies that built the offshore oil and gas industry are taking their expertise and building projects in other energy segments, such as offshore wind and offshore carbon capture and storage. Not to mention, companies like Danos are also leading the way in our state’s coastal restoration and wetland protection. Louisiana has the infrastructure, workforce, and capital to become a model for the low carbon energy transition. But the economic truth is we need to continue our offshore leasing program to get there.
The industries that support our domestic production need oil and gas work to have the capital to solve, scale, and deploy solutions for the low-carbon transition. These companies won’t survive a continued ban on offshore leasing. With these companies weakened, we will lose high paying careers and our ability to produce a stable supply of lower carbon oil and gas needed to ensure our country is not dependent on other nations for our energy needs. It is an economic matter and a matter of national security.
There are currently no plans in place for the federal government to hold a lease sale in the Gulf of Mexico. It could be years before there is a lease sale in the Gulf of Mexico. Delays in the five-year offshore leasing plan could cost our state 14,000 jobs. Louisiana’s economy could lose an estimated $1.3 billion from these decisions. And over the next two decades, our country could lose 20% of our oil production, raising prices for everyone and weakening the United States on the global stage.
Louisiana’s coastal communities are made of hard-working people trying to live the American Dream. Uncertainty in the energy markets is threatening to hurt them and their small businesses. We need President Bident to resume Gulf of Mexico oil and gas leases, so Louisiana can continue to be a leader for energy production in the U.S. for decades to come.