American Oil and Gas Reporter - February 2017 - 96

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96 THE AMERICAN OIL & GAS REPORTER

regulations put in place by the Obama administration and get back to where it is advantageous and actually economic to conduct
offshore operations," he applauds.
One of the main difficulties of working
in the Gulf of Mexico is the long lead
times for projects, Briggs assesses. Unlike
most onshore counterparts, which require
six months to a year of lead time, offshore
rigs take several years to design and
build. So, he warns, the downturn of the
past couple years is likely to disrupt Gulf
projects for a while.
"I think companies will be watching
to see what happens with regulations,"
Briggs says. "The smaller operator is not
going to spend his money in the Gulf; he
may have this huge financial security
regulation put on top of him. I think
there is a lot of wait and see for what is
going to happen out there."
BOEM released its updated financial
assurance and risk management requirements for offshore leases in July. Its
notice to lessees and operators contains
new requirements for operators to prove
their ability to decommission Outer Continental Shelf facilities, and if necessary,
provide additional financial assurance
(AOGR, August 2016, pg. 16). However,
in January, BOEM announced it was
postponing the new requirements fox six
months (see story page 18).
"Those rules are just so unmanageable
for the smaller operators that you would
drive 50 percent or more of the companies
that work in the Gulf of Mexico out of
business. That is another issue LOGA is
hoping to see go the way of the Trump,"
Briggs says.
LNG
As the nation's liquefied natural gas
exports continue to flow to foreign customers, Hanks applauds the growing number of LNG projects operating or planned
for southern Louisiana. "There are four
LNG projects in the works down there.
That will be a great resource for the state
to grow, and for all the Haynesville Shale
gas to be able to focus on and send out
from there," he describes.
Two of those projects are being built
by Venture Global LNG, Hanks says. Its
10 million metric-ton-a-year Calcasieu
Pass facility is in Cameron Parish, while
the Plaquemines Parish site on the Mississippi River south of New Orleans has
a planned export capacity of 20 mmt/y.
Briggs points out that while U.S. LNG
exports hold significant potential for producers, it is too early to say whether shipments will lead to increased field activity.
"We have so much excess gas capacity
that we do not know what to do with the
gas we have," he says. "We will have to

see if operators begin bringing on all that
gas. The question is whether there is
enough export capacity, so that five years
from now the U.S. natural gas rig count
will have to double from where it is
today. And, as we produce more shale
oil, a lot of the gas produced in the United
States has been associated gas."
Many of those LNG export companies
are association members, Hanks says,
and LOGA is explaining the benefits of
membership to the others.
"To date, our LNG member companies
have been tremendous supporters of
LOGA," he praises. "They have a real
sense of community, and do a great job of
getting into the communities and participating not only at the local level, but also
on regional and statewide bases. The relationship is very positive. Given the tremendous amount of investments those companies make in LNG facilities, it is refreshing
to know they are at least sprinkling some
of those dollars to local communities."
ICR Survey
Before the United States can fully
capitalize on the promise of LNG exports,
Briggs says it first must reform its regulatory sector, including eliminating the
information collection request for methane
emissions imposed in the final months of
the Obama White House.
The U.S. Environmental Protection
Agency unveiled the plan in June as part
of its initiative to expand methane emission
regulations from new and modified sources
to existing oil and gas wells. The initial
phase of the program is collecting data
through the ICR survey (AOGR, September
2016, pg. 28).
"Obviously, that is affecting every operator in the country. Everybody is furious
with it," Briggs assesses. "I haven't yet
heard anything about the Trump administration doing something quick on that, but
I definitely can say there is plenty of effort
being put in to try to make that happen."
Many companies are asking EPA for
extensions to file their survey responses
because of the large amount of information
that must be compiled, he points out.
The best-case scenario is that the companies receive the extensions and then
the survey is shelved by the new administration.
"I have not had anyone put monetary
figures on this rule's impact, but I have a
lot of people who said they couldn't do
it," Briggs says. "The only endangered
species issue we have in Louisiana is the
oil exploration companies themselves."
Needed Prices
In addition to regulatory relief, Hanks
argues that companies also are looking

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American Oil and Gas Reporter - February 2017

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