Zachary Fitzgerald
Despite challenges for the oil and gas industry, a Donald Trump presidency is giving the industry hope of rebounding with the help of an executive branch that’s friendlier to business, an industry marketing director says.
Ben Broussard, the Louisiana Oil & Gas Association’s director of marketing and membership development, spoke April 26 during the St. Mary Chamber of Commerce business luncheon at the Petroleum Club of Morgan City.
Donald Trump’s election as president “has been a spark of hope among the industry as well, especially those that operate in federal waters, in federal land or have any kind of regulation by the EPA,” he said.
Many in the industry were excited about the belief that Trump would “take a businessman’s approach” and “cut through a lot of the red tape,” Broussard said.
Trump picked cabinet members who should work well with the oil and gas industry, Broussard said.
“This is either the energy dream team or the Green Party’s night-mare,” Broussard said.
His secretary of state, Rex Tillerson, as the former CEO of Exxon, can provide “sound advice” about the industry to Trump having been the head of “a highly successful worldwide oil and gas company,” he said.
Rick Perry, the secretary of energy, was instrumental during his time as Texas governor in passing tort reform legislation “and really doing away with any of the legal issues there that we are currently dealing with here,” Broussard said.
EPA Administrator Scott Pruitt gained notoriety for suing the EPA while he was Oklahoma’s attorney general.
“Now he is regulating the EPA,” Broussard said.
Ryan Zinke, a former Montana congressman, is the secretary of the Department of the Interior, which regulates federal lands.
During the same month American voters elected Trump, OPEC finally cut 1.2 million barrels per day of production, which brought the world’s “supply and demand curves back to more of an equilibrium,” Broussard said.
Markets responded to that action, and the price of oil reached $55 per barrel, and natural gas prices rose slightly, too.
Hope and optimism increased, and Louisiana started putting rigs back into operation and even more so in Texas, Broussard said.
South Louisiana’s production is struggling due partly to lack of “stability” and a negative “legal climate” that has plagued the industry for about 15 years, he said.
Landowners filed lawsuits against oil and gas companies for alleged environmental damages that occurred years ago for processes that were permitted at the time.
Plaintiffs that own certain lands filed lawsuits against “every single operator” who’s ever used the land in hopes of getting “a big jury award,” Broussard said.
In 2003, a $70 million judgment was awarded for a piece of property that wasn’t worth more than $200,000, he said. Since then, different entities filed 400 similar lawsuits, and many lawsuits are still pending.
“That sends a message to potential investors that Louisiana is not open for business,” Broussard said.
Job losses in the oil-field have been high, especially in Houma and Lafayette.
Gov. John Bel Edwards took office in January 2016 with the state facing major budget issues, and the Legislature raised taxes “almost across the board” during 2016, Broussard said.
Rhetoric coming out of the state Capitol “saying that business is not paying their fair share” has caused big concerns for companies along with tax increases that accompanied that rhetoric, he said.
Even with tax increases, the state “still had a budget crunch,” Broussard said.
Broussard encouraged business owners to tell legislators how new taxes would affect their businesses. He called the deferment of the commercial activity tax proposal Tuesday “a major victory for business and industry.”