Fourchon’s fate rests on OCS legislation, deepwater growth
David Paganie
Estimated $13 billion to Louisiana over next 30 years
Port Fourchon is up and running at full speed. More land is being offered for lease. New tenants are moving in. Tonnage throughput increased by 75% in 2006 to 38 million tons of cargo (over 95% is oil and gas related). And the port’s leader and visionary, Ted Falgout, will remain at the helm as director for another three years. The 28-year veteran’s contract was renewed by the board of commissioners through Dec. 31, 2009.
The port commission is undertaking a number of projects to enhance the facility’s infrastructure and security. These include the creation of a new slip, C, which will add 300 acres to the port; improvements to its recently acquired airport; continued support of the LA1 coalition; and lobbying for additional OCS revenues for coastal restoration and protection.
The port’s central location on the Gulf Coast with its close proximity to open waters, and deepwater growth, are the main drivers behind getting support for these projects.
One of Falgout’s objectives over the next few years will be to continue to educate the industry on the importance of Port Fourchon and its adjoining highway, LA1, in supplying the US with energy; 15-18% of the nation’s oil supply to be exact.
As a result of Falgout and the port commissioner’s lobbying efforts over the past decade, new OCS legislation made it through to the president’s desk. On Dec. 20, 2006, President George W. Bush signed into law the Gulf of Mexico Energy Security Act.
The new law opens 8.3 million acres in the eastern Gulf of Mexico, much of which likely will be supported by Fourchon, and shares 37.5% of royalties paid on new leases with Louisiana, Texas, Mississippi, and Alabama.
“Although very little money will be flowing to Louisiana in the short-term, these next few years will be critical in shaping this program (OCS revenue sharing),” says Falgout. “The fate of our port, transportation, hurricane protection, and community as a whole, will lie in the details of how this program unfolds.”
According to Louisiana senator Landrieu’s office, the bill could provide Louisiana with an estimated $13 billion over the next 30 years; close to $1 billon/year starting in 2017.
Deepwater
Tenants continue to move into Port Fourchon because of its ideal location on the Gulf Coast to support the growing deepwater drilling and production market.
Currently, over 70% of GoM oil and 40% of OCS gas comes from deepwater. This percentage has been increasing since 1990, and with an estimated 50 Bboe left to be discovered in deepwater, this upward trend will continue for the foreseeable future.
Port Fourchon currently supports almost 70% of the Gulf’s deepwater projects, and is projected to service at least half of the pending developments.
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Volume 67 Issue 3
March 2007
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