Nungesser pushes for reduced gas royaltiesDec 28th, 2010 | By Terri Sercovich | Category: news
Plaquemines Parish President Billy Nungesser is leading an effort to boost drilling in Louisiana waters by reducing the state’s royalty percentage on gas drilling. Before the Deepwater Horizon oil spill, President Nungesser worked with GNO, Inc and the Plaquemines Association of Business & Industry on a plan to lower the Louisiana royalty rate on gas production from 22 percent to 12.5 percent, for all wells drilled deeper than 15,000 feet on the shallow shelf.
“The goal is simple, use incentives to attract new business,” said President Nungesser. “It doesn’t make sense for a company to pay 22 percent royalty there when they can go out three more miles into federal water and pay less, or get federal royalty relief. And with uncertainty continuing about when deep water drilling in the Gulf of Mexico will reach pre-moratorium levels, any increase in shallow-water deep gas activity created by the royalty reduction could salvage jobs.”
Now, Nungesser has built up support from other coastal parish presidents and business organizations who are encouraging Governor Bobby Jindal to implement the royalty reduction. Currently, less than 15 percent of Louisiana’s shallow waters are under lease.
“We’ve got to do everything we can to kick-start activity in these shallow waters. If the state government for some reason can’t act on this, I will work on something for local incentives here in Plaquemines,” said Nungesser. “We need to step up to the plate and nourish the gas industry. Some criticize me and say it makes no sense for these companies to ask for relief when we are in a recession. That’s why I am asking, so the companies don’t have to.”
Based on a 2006 LSU Study by the Center for Energy Studies, Plaquemines Parish accounts for an estimated 23 percent of Louisiana’s oil production, 10 percent of its natural gas production, and the parish brings in 25 percent of the state’s mineral revenues.
“We have 30 years of production down here and enormous fields, more than any other parish,” Nungesser continued. “We can’t forget, and shouldn’t forget, that the oil and gas industries are our bread and butter, that they contribute to our life style.”