Long known as a great source of energy for heating our homes and cooking our food, natural gas is increasingly being called upon these days to fuel something entirely different: our nation’s economy.
From the president’s recent statement that the “potential for natural gas is enormous” to the reintroduction of legislation in Congress promoting the use of natural gas vehicles, policymakers are starting to recognize the value in developing a resource that’s clean, abundant, reliable and a powerful engine for economic growth. Not that folks in Louisiana needed a reminder. Thanks in large part to the Haynesville shale, onshore natural gas development from deep shale formations increased by a factor of 20 from 2008 to 2009. This year, the Haynesville shale took over the top spot as the most prolific shale field in the country. The challenge now, for all of us, is to keep it there.
Unfortunately, some folks in Baton Rouge appear to be eyeing new taxes that could have a tremendously negative effect on the Louisiana economy. One plan making its way around town would abolish incentives promoting advanced horizontal drilling technology, which more than anything else has made the Haynesville play a reality. Some believe that eliminating this benefit will bring in new tax revenue, but any gains would be short-lived.
A recent study by Louisiana economist Loren Scott reports that for “every dollar the state gave up via the horizontal well severance tax investment incentive it gained $2.94 in revenues.” In addition, Scott finds exploration companies spent roughly $11.5 billion over the 2008-2009 time frame and generated more than $642 million for the state in revenue. His research also suggests that without this industry, 57,000 more jobs would have been lost in 2009.
Earlier this week, Consumer Energy Alliance hosted a screening of the documentary film “Haynesville,” a movie that explores many of the pertinent issues around the development of natural gas in Louisiana. Lots of folks turned up for the event, and not just because admission happened to be free. Based in Houston and with offices in Washington, D.C., and Chicago, CEA is committed to spreading the word about the need for affordable energy supplies in the United States, particularly in the form of American natural gas. This is especially true in Louisiana, where natural gas is helping put the state — and the country — back on a sustainable economic path.
Andrew Browning, vice president
Consumer Energy Alliance
Chicago
