The Importance of Energy Production and Infrastructure in Plaquemines Parish
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Center for Energy Studies The Importance of Energy Production and Infrastructure in Plaquemines Parish Prepared for the Office of the Parish President and Project Rebuild Plaquemines with Assistance from the Plaquemines Association of Business & Industry June 14, 2006 David E. Dismukes, Seth Cureington & Elizabeth Oleks Center for Energy Studies Center for Energy Studies Louisiana State University 1 © LSU Center for Energy Studies Acknowledgements Center for Energy Studies The Center for Energy Studies would like to thank Parish President Benny Rousselle and Leonard Mistich, Executive Director of the Plaquemines Association of Business and Industry, for their support and input on this project. Funding support for this study was provided by Project Rebuild Plaquemines. CES appreciates the support of the Louisiana Department of Natural Resources, particularly Secretary Scott Angelle, for support and assistance during the course of this research. DNR provided a host of materials from a similar study it was conducting prior to the CES initiative. Further, DNR was instrumental in providing the royalty revenue information used in this report. CES would also like to thank the Louisiana Department of Revenue for their assistance in providing important severance tax information for this project. The helpful comments of many regional business and industries in Plaquemines Parish are also appreciated. 2 © LSU Center for Energy Studies Report Outline Center for Energy Studies • Overview of Plaquemines Energy Production and Infrastructure • Overview of the Plaquemines Energy Economy • Katrina Impacts on Plaquemines Energy Economy • Ongoing Energy Production and Infrastructure Importance • Conclusions 3 © LSU Center for Energy Studies Executive Summary: Importance of Plaquemines Energy Center for Energy Studies Production and Infrastructure • Plaquemines energy economy is unique since it includes most ALL types of energy production, support and infrastructure. (Production, support, storage, transportation, refining, petrochemical) • Plaquemines is an energy “golden goose” for the state. It contributes the largest share of state production and mineral revenues – over $2.1 billion in total mineral revenues over the past decade. • There are close to 11,000 active producing oil and gas wells in the Parish. • Energy is estimated to be a $1.2 billion industry in Plaquemines and accounts for over 8,000 direct, indirect, and induced employment opportunities in the parish. • Failure to support production, storage, transportation, and processing infrastructure in the area can have important impacts on national energy markets during a critical period of industry constraints. • The region is also an important part of the Louisiana economy. Facilitating speedy recovery in the parish is an important part of Louisiana’s overall recovery. This recovery will pay dividends over time to the state and the nation in terms of ongoing and future energy production, processing, and deliverability. 4 © LSU Center for Energy Studies Center for Energy Studies Overview of Plaquemines Energy Production and Infrastructure 5 © LSU Center for Energy Studies Oil and Gas Production Facilities State and State Waters Center for Energy Studies There are a large number of active state-jurisdictional oil and gas wells onshore and offshore in Plaquemines 6 © LSU Center for Energy Studies Plaquemines Oil Production (Onshore and Offshore) Center for Energy Studies Oil production from the parish has been declining, but has remained stable and even increased as a share of total state production over the past several years (prior to Katrina). Prior to hurricane, Plaquemines was producing close to 18 million barrels per year. 5 25% ) % 5 ( n on i o t i 4 20% t c 4 uc ) odu od s r l Pr b 3 15% l P i l i b n 3 e O illio nes O at i 2 10% t m ( S em 2 of aqu l 1 5% ent P c r 1 e P 0 0% 4 0 0 4 6 0 2 6 9 0 0 8 8 8 9 9 98 02 88 92 84 - - - - - - - - - n n n n n n n n Ja Jan- Ja Jan- Ja Ja Ja Jan Ja Jan- Ja Jan- Ja Plaquemines Oil Production Percent of State Oil Production 7 Source: Louisiana Department of Natural Resources © LSU Center for Energy Studies Plaquemines Natural Gas Production (Onshore and Offshore) Center for Energy Studies Natural gas production from Plaquemines has been declining, however, as a percent of total state production, it has remained stable. Prior to the hurricanes, the Parish was producing over 105 billion cubic feet per year. 30 20% ) % ( n 18% o i on t 25 i t c 16% c odu 14% r 20 odu P 12% s s Pr ) a f a c 15 10% (b e G nes G 8% at i t 10 S em 6% 4% of aqu l 5 ent P c 2% r e 0 0% P 8 4 2 0 6 2 9 0 0 8 8 9 96 00 82 84 88 90 94 - - - - - - n n n n n n Jan- Ja Jan- Ja Ja Ja Jan- Jan- Ja Jan- Jan- Ja Jan- Plaquemines Gas Production Percent of State Gas Production 8 Source: Louisiana Department of Natural Resources © LSU Center for Energy Studies OCS Oil & Gas Platforms New Orleans District Center for Energy Studies There are a considerable number of highly prolific oil and gas production assets off the Plaquemines coast on the Outer Continental Shelf. There are some 1,102 active structures off the Parish coast. 9 © LSU Center for Energy Studies OCS Oil Production New Orleans District Center for Energy Studies OCS oil production located offshore of Plaquemines, has been increasing significantly, as has its share of total federal OCS production. Prior to the hurricane, the offshore area accounted for half of the total oil production in the Gulf. 300 60% ) ) s 250 50% l b % ( b S n 200 40% C illio O l m a ( 150 30% t on i To of 100 20% oduct ent r c r P e l i P O 50 10% 0 0% 0 2 8 4 98 04 84 92 96 02 90 19 19 200 20 20 1980 198 19 1986 198 19 19 199 New Orleans District Federal OCS Oil Production New Orleans District Production as a Percent of Total GOM 10 Source: Minerals Management Services, US Department of the Interior © LSU Center for Energy Studies OCS Natural Gas Production New Orleans District Center for Energy Studies OCS natural gas production offshore of Plaquemines has been increasing significantly, as has its share of total federal OCS production. Prior to the hurricane, the offshore area accounted for one-third of the total natural production in the Gulf. 1,400 35% 1,200 30% ) % ) ( cf 1,000 25% S b C ( n O o l i 800 20% a t duct To o r 600 15% of P s ent a 400 10% c r G e P 200 5% 0 0% 0 0 0 04 84 88 94 998 982 992 1996 1 200 2002 20 198 1 19 1986 19 199 1 19 New Orleans District Federal OCS Gas Production New Orleans District Production as a Percent of Total GOM 11 Source: Minerals Management Services, US Department of the Interior © LSU Center for Energy Studies Plaquemines Parish Refining Capacity Center for Energy Studies ConocoPhillips Alliance Refinery • Located in Belle Chasse, Louisiana, on the Mississippi River, about 25 miles south of New Orleans and 63 miles north of the Gulf of Mexico. • Began operations in 1971, one of the last grassroots refineries built in the US. • Crude oil processing capacity of 247,000 barrels per day. • Receives domestic crude oil by pipeline and international crude oil via the Louisiana Offshore Oil Port (“LOOP”). • Most refined products are distributed to customers through the Colonial and Plantation pipeline systems. • Facilities include a coking unit, which upgrades bottom of the barrel products into light oils and high-value anode petroleum coke. 12 © LSU Center for Energy Studies Plaquemines Parish Chemical Capacity Center for Energy Studies Chevron Oronite Oak Point Plant • Located in Belle Chasse, Louisiana, on the Mississippi River. • The plant occupies 100 acres in the parish and has more than 410 employees. • One of the largest and most advanced producers of high-quality blended fuel and lubricant additives in the world. • Manufactures more than 30 unique additive components and intermediates, and blends more than 300 packages to specific customer requirements. 13 © LSU Center for Energy Studies Plaquemines Parish Gas Processing Capacity Center for Energy Studies Venice Gas Processing • Located in Venice, Louisiana. • Owned by a number of partners including Chevron, Targa Resources, Enterprise Product Partners and Oneok. • Gas processing capacity of 1.3 bcf of natural gas per day. • Receives natural gas by from offshore pipelines: Mississippi Canyon, Texas Eastern, Venice Gathering System. • • Delivers natural gas to onshore pipelines: Texas Eastern, Columbia Gulf, Gulf South 14 © LSU Center for Energy Studies Plaquemines Parish Petroleum Storage Center for Energy Studies Empire Petroleum Storage • Located in Buras, Louisiana. • Primary delivery point for Heavy Louisiana Sweet Crude produced in the GOM. • Handles 400,000 - 500,000 barrels per day. • Receives crude produced in Gulf from pipelines: Cypress, Breton Sound, MP 69, Delta System and Grand Bay. • Crude is delivered via outbound pipelines to Chalmette refinery, St. James Terminal, and Mars Blend tanks at LOOP. 15 © LSU Center for Energy Studies Center for Energy Studies Overview of the Plaquemines Energy Economy 16 © LSU Center for Energy Studies Sou Center for Energy Studies Center forEnergy r ce : Louis i ana Depar Severance Tax Collected from Plaquemines (million $) 10 12 14 16 18 0 2 4 6 8 tmen revenues tot Jul-93 Ove t of Re r thepast14y ve Jul-94 nue Oi h e state.Priorto l Jul-95 e Jul-96 a r s, Plaquemineshas Jul-97 Katrina,th state’s severancerevenues.