For oil industry, good news by the spoonful

Oct 26, 2017 / News

Much of the good news from the Louisiana Gulf Coast Oil Exposition arrived by the spoonful this week. If you can’t get good news by the bucket, take it a little at a time:

Some energy professionals suggested a slow but steady commodity price increase.

Maybe. Randal Luthti quipped that industry mantras like “Lean and mean in ‘16” might be replaced with “Plenty in ‘20” when in comes to prices.

Some, like Ryan Malone at BP, touted new offshore production efforts that are driving down that company’s expenses, making producers more competitive. Who would have dreamed three years ago that deep-water operations could break even under $40 a barrel?

Overheard at a LAGCOE lunch table: Talos has a great discovery in Mexico’s Gulf. Mexican energy officials have been visiting Lafayette since the price downturn of 2014, but locals here have been hesitant to test those waters. Mexico, which nationalized U.S. oil operations in the 1930s, wants private investment in their flagging state-run energy company, but around here, eight decades may be too soon to forget. Can Lafayette companies profit there?

Bureau of Safety and Environmental Enforcement Director Scott Angelle talked about a presidential administration that’s not hostile to developing natural resources like fossil fuels. Let’s be partners, he suggested to private producers.

Some of the best news at LAGCOE might have been delivered 1,200 miles away. Interior Secretary Ryan Zinke, an industry favorite, suggested that the March 2018 oil and gas lease sale in the Gulf of Mexico might be the largest ever: 76,967,935 acres in federal waters. The department said that’s about the size of the state of New Mexico, and it includes “all available unleased areas."

That announcement came Tuesday; Angelle, who was headed to Lafayette to speak when it was made, had not heard that good news before it came out. But he said that’s where the good news starts, with leases made available for exploration and production.

“In today’s low-price energy environment, providing the offshore industry access to the maximum amount of opportunities possible is part of our strategy to spur local and regional economic dynamism and job creation and a pillar of President Trump’s plan to make the United States energy dominant,” Zinke said.

Most pleasing, though, was not to see how that attitude is affecting major corporations or top elected and appointed officials. It was more satisfying to hear optimism reflected in the vendors who attended LAGCOE, marketing new products with new hope. There is a bright future for energy, they seemed to say.

By the numbers, LAGCOE ‘17 won’t meet the attendance or revenue benchmarks set at huge shows in 2013 and 2015. But programs were excellent and the mood seemed at least cautiously optimistic. It was a chance to recharge, to regain some mojo, to appreciate that after three grueling years, lots of energy companies and professionals are bloodied but not beaten.

Dominance? Maybe someday. For now, it’s great to see some enthusiasm.

Angelle, speaking at LAGCOE, touched upon that theme of U.S. energy dominance but he said much the same at an appearance at a recent Louisiana Oil & Gas Association meeting in Lafayette. This administration and its supporters speak with one voice on energy, and what they say encourages folks like those at LAGCOE.

Luthti said as much Wednesday with light-hearted but genuine reference to changing attitudes in Washington. Where the Obama administration was hostile to the interests of U.S. energy producers, the Trump administration has taken the opposite tack.

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