With a new presidential administration on the horizon, Louisiana Oil and Gas Association President Gifford Briggs is confident it will only help an industry that has seen its fair share of challenges.
“Obviously, Donald Trump is going to be positive for the oil and gas industry, even if he does nothing,” Briggs told The Louisiana Record.
Under the Obama administration, the Federal Bureau of Ocean Energy Management guidelines have been set that have been detrimental to oil and gas companies in the Gulf of Mexico.
“These rules have prevented companies from growing and bring on a loss of jobs in the oil and gas sector,” Briggs said. “Financial assurance to independent oil and gas operators has also been affected under the Obama administration.”
Briggs said that financial assurance is a necessity to get an offshore-drilling lease. As the financial-assurance guidelines stand now, operators must put up large bonds, preventing them from hiring and exploration, because the practice is so expensive.
To obtain a federal lease for offshore drilling, financial assurance is required. Independent oil and gas operators are responsible for putting up collateral to decommission a well.
Because independent operators do not have the money that large oil and gas companies have, providing financial assurance might not be possible for them. This could cause more bankruptcy in an industry that already has too many. It may also cause job loss.
A legal reform that Briggs would like to see is the end to suing oil and gas operators in the Gulf of Mexico over coastal damage.
“One of the biggest overriding issues is coastal and legacy lawsuits that continue to draw business out of state,” Briggs said.
Currently, Briggs said, five parishes in Louisiana have filed lawsuits against the oil and gas industry.
“The governor himself has told parishes if they do not sue, then they will do it for the parishes,” he said. “Louisiana has a sort of sue-first mentality, and it’s hurting the oil and gas industry greatly.”
The lawsuits filed against oil and gas companies have become a major concern in Louisiana. Every parish has been affected by the oil and gas industry in some manner, not just the coastal parishes. Many of the coastal parishes that have not sued are opposed to the lawsuits since they hurt their economies due to the oil and gas industry’s economic footprint. Lawsuits have also cause independent oil and gas operators to go bankrupt.
Critics have said jobs become harder to create when lawsuits are so prevalent that they have a dampening effect on the oil and gas sector.
Briggs hopes these lawsuits will not continue under the Trump administration.
“These lawsuits not only hurt the industry, but they hurt parish economies, as well and many parishes do not want to sue,” he said.
One way to help the oil and gas industry would be to overturn the BOEM’s financial-assurance rule, which Briggs believes deters jobs from being increased in the industry. But he has faith that the new administration will recognize the unfairness of the financial-assurance rule and will overturn it.
“The industry is depending on solutions such as this,” Briggs said. “Families and jobs are depending on it.”