Many people in Louisiana understand the basics of producing oil, but few know about the history and development of the industry. How did the oil industry begin in Louisiana? What role does oil production play in the development of Louisiana? What impact has oil production had on Louisiana’s environment and what can be done to reverse that impact? For almost 140 years, oil has been a big part of Louisiana’s history. Who would have thought Louisiana’s oil industry would have begun in such a small, backwoods town known as Jennings, LA and the impact it would have on the environment today.
The Beginning of Louisiana’s Oil Production
Louisiana’s oil industry dates back to September 1901, when the first successful oil well was drilled in a small town by the name of Jennings, Louisiana (“Louisiana Department of Natural Resources.” HIST: First Oil Well. N.p., n.d. Web. 14 Apr. 2014). The well was given the name “Heywood #1 Jules Clement Well,” named after W. Scott Heywood and Jules Clement. Heywood was a wildcatter from Beaumont, Texas, who became one of the organizers of the Jennings Oil Company, after being brought to Louisiana by businessmen looking to contract his services. Jules Clement was the landowner of the property that the Heywood well was drilled on.
At first the well appeared to be a fluke, producing no oil at 1,500 feet with no drill pipe left to drill deeper, causing many investors to bail out. However, W. Scott Heywood persisted to drill deeper and deeper. Finally on September 21, 1901, the well was tested and a 4-inch stream of oil shot 100 feet into the air. Sand and oil flowed from the well for approximately seven hours leaving a lake of oil on Jules Clement’s land. One article states that “washing, bailing and flushing continued for about 30 days.” However, “if the sand could have been controlled in that well, it would have produced over 7,000 barrels per day (Rob Burns, “Corporate Responsibility and the Louisiana Oil Industry,” Watershed-Based Integrated Field Semester, posted on May 1, 2005).
Even though this well was abandoned due to an overabundance of sand, the oil boom in Louisiana had begun. By the end of 1905, more than 6,000,000 bbls (barrels) of petroleum was produced from wells surrounding the northwestern region of the state (Mariano, J. B. & E. L. L. Rovere. Petroleum Engineering-Downstream. Environmental Impacts of the Oil Industry. Encyclopedia of Life Support Systems). The following year the first oil and gas conservation law for the state of Louisiana was passed. This law was passed at the time to prevent oil workers from letting fires burn which prevented the waste of natural gas.
In 1909, one of the largest oil refineries on the North American continent was built in Baton Rouge. In the same year, construction began on Louisiana’s first long-distance oil pipeline. Crude oil began being transported from Caddo Parish to the Baton Rouge refinery through this pipeline in 1910. Then history was made in Shreveport, Louisiana, when the first over-water drilling in America took place on Caddo Lake causing the focus to switch to offshore drilling. By the 1920s Louisiana began speculative drilling, also known as high-risk drilling, for oil. In the following years approaching World War II the government had begun to apply new technologies that would increase the production of oil in Louisiana.
By 1940, the oil and gas industry had moved to central Louisiana with the discovery of the Olla Field in LaSalle Parish. On November 14, 1947, the birth of the offshore oil and gas industry began when the first oil well was brought in by Kerr- McGee to the Gulf of Mexico about 45 miles south of Morgan City, this became a unique sign over of land rights for drilling. The advantage of offshore drilling yielded higher returns with longer lasting contracts than did onshore drilling.
Within a year of the Kerr-McGee well, statewide drilling for oil and offshore drilling in the Gulf of Mexico was taking place. As a result of this offshore drilling in addition to onshore drilling, by 1969 Louisiana reached its maximum production of oil yielding over 725 million barrels! After reaching this maximum production, oil production steadily declined due to higher severance taxes until 1996 when the idea of drilling in the Gulf of Mexico was revisited because of worldwide demand for oil. This idea of revisiting the Gulf of Mexico has brought us to where we are today in oil production in Louisiana.A new law was created in 1991 that levied for a two cent per barrel on all oil that would be transferred, established through the newly created oil spill response program. By 1996, after a decade of a recession-like era for the oil and gas industry, there was a revitalization of the once stagnant energy business. This new development was encouraged by a worldwide demand for oil which gave the Louisiana oil and gas industry greater prominence in new drilling activity in the Gulf of Mexico.
Environmental Impact of Louisiana Oil Production
The oil industry has always had a vast impact on our society and has intertwined its way into the cultural aspect and history of Louisiana. However, it has also grievously affected the environment as well. The oil industry presents many hazards to the Louisiana region and the Gulf Coast that have been addressed in the past and with time have been improved with regulations and engineering advancements. So what are these hazards that have impacted the environment? These hazards include pollutants, greenhouse effects, and destruction of native habitats (Mariano, J. B. & E. L. L. Rovere. Petroleum Engineering-Downstream. Environmental Impacts of the Oil Industry. Encyclopedia of Life Support Systems). But how, specifically, does the oil industry cause these environmental hazards? Pollutants are everywhere, in every industry, and in every time of human history, so it is no surprise that the oil industry has its own set of problems with it. These pollutants come from the various stages within the oil and gas processes and production from beginning to end. They can be industrial waste from drilling, gas emissions, chemical transportation, wastewater, and in the refining process (EPA in Louisiana. http://www2.epa.gov/aboutepa/epa-louisiana. March 10, 2014. Environmental Protection Agency. August 1, 2013).
With all of these issues and little efforts to create a recycling or clean disposal plan to counteract the pollutions, Congress had to put regulatory laws into action to keep these pollutions under control. In 1974, Congress passed the Safe Drinking Water Act, or the SDWA, which requires the Environmental Protection Agency (EPA) to develop minimum federal requirements for Underground Injection Control, or UIC. These monitoring programs and other safeguards protect public health by preventing injection wells from contaminating underground sources of drinking water (EPA in Louisiana. http://www2.epa.gov/aboutepa/epa-louisiana. March 10, 2014. Environmental Protection Agency. August 1, 2013). On October 21, 1976, Congress also passed the Resources Conservation and Recovery Act, or the RCRA, which developed regulations governing the identification and management of hazardous waste (2012 Greenhouse Gas Emissions from Large Facilities. http://ghgdata.epa.gov/ghgp/main.do#/facilityDetail/?q=Find a Facility or Location. March 10, 2014. Environmental Protection Agency. September 1, 2013).
Greenhouse effects are another big issue that the oil industry receives criticism for. Depending on the refinery, these emissions can be a significant issue in air pollution. For example, a refinery in Louisiana or Louisiana’s Gulf of Mexico can produce anywhere from 10,000 metric tons of CO2 to 518,000 metric tons of CO2 that is emitted into the air every year (EPA in Louisiana). Realizing this, the EPA passed new regulations on February 6, 1998 called the National Emission Standards for Hazardous Air Pollutants: Oil and Natural Gas Production and Natural Gas Transmission and Storage. This new regulation was to be implemented to collect data on the amount of emissions yearly and to reduce CO2 emissions from the oil and gas refineries (Mariano, J. B. & E. L. L. Rovere). Due to this new regulation, some of the things that have been implemented to reduce emissions are the use of equipment such as cyclones, bag filters, electrostatic precipitators, and scrubbers, among others (Bustler, Via. Reclaiming Oil Rigs as Oceanic Eco-Resorts. inhabitat.com/oil-rig-eco-resort-by-morris-architects/. February, 2009. Morris Architects. Inhabitat Design Will Save the World. Houston, Texas. March 31, 2014).
Future Impacts
One recent idea to reverse the carbon footprint the oil industry leaves in the Gulf of Mexico is the proposal to change decommissioned offshore rigs into an offshore vacation. The Morris Architect Firm deals with the largest question in the oil industry: what to do with leftover oil rigs in the Gulf of Mexico? Traditionally, once these rigs have been decommissioned, the company that owned that rig will bring it back to port for renovations. These renovations usually include bringing the old rigs up to par with the new international standards of health and safety regulations for offshore rigs, giving the rigs better equipment, tools, technology and new framework. Then, these revitalized rigs are then shipped back out to sea for the next company to use it. However, this is not the case for all rigs. Sometimes companies will leave the rig out in the Gulf of Mexico until it is of use in the future or they will sell it for possible reuse and relocation.
A recent design competition in Houston, Texas in 2009, revealed some possible solutions to decommissioned rigs to turn them into a luxurious eco-resorts and spas. Morris Architects proposed a design that would change an old oil rig into a unique and luxurious resort with an eco-friendly spin as it would include self-sustaining power. After winning the design competition, Morris Architects stated, “We love how the inspired renovation takes an iconic source and converts it to an eco-haven that generates all of its power from renewable sources”. Some of the energy-producing resources proposed would be a large wind turbine, wave energy generators, solar panels, and geothermal heat pumps. The geothermal heat pumps would take advantage of the consistent water temperatures at lower sea levels that rigs in the Gulf of Mexico are stationed at and aid with heating and cooling of the interior rooms (Via Bustler. Oilrig Hotel. February, 2009. Morris Architects. In-habitat Design Will Save the World. Houston, Texas).
These floating re-purposed decommissioned oil rigs would be called, “The Rig Hotel” and it would include diving, snorkeling, boating, and other water sports. The Rig Hotels would also provide the possibility of becoming a cruise ship stop en route to other vacation locations (“Louisiana Mid-Continent Oil and Gas Association.” Economic Impact Issues & Initiatives . N.p., n.d. Web. 11 Mar. 2014). As marketed by the Morris Architect Firm, these Rig Hotels would be a great place for business meetings and conferences for the offshore oil industry and other meetings that could help further develop transformative oil rig designs. With shows at night by Cirque du Soliel and with most of the floors made of glass for unparalleled views of the Gulf of Mexico, one can see how this environmentally-friendly resort can make a big impact on future uses of decommissioned rigs. Something that was once looked at by many outsiders as a “dirty energy,” or an energy source that left nothing but a carbon footprint, would be converted into something that is clean and luxurious — a truly futuristic endeavor.
How Far We’ve Come
Since the initial drilling of the first well in Louisiana, over 220,000 wells have been drilled in Louisiana. Not only has the oil industry drilled hundreds of thousands of wells in Louisiana, but it has also been an economic giant bringing in revenue, jobs, and state taxes (“2012 Employment and Wages – Louisiana Workforce Commission.” 2012 Employment and Wages – Louisiana Workforce Commission. N.p., n.d. Web. 11 Mar. 2014). The oil industry has also impacted other industries and companies by creating new jobs by opening up new fields of work. As a result, it has allowed other energy-related industries to ride on the coat tail of success of the oil industry.
Currently, the oil industry supplies approximately 80 billion dollars a year to the Louisiana economy. (“Louisiana Mid-Continent Oil and Gas Association.” Economic Impact Issues & Initiatives . N.p., n.d. Web. 11 Mar. 2014). The state taxes alone on advertisements and company marketing alone produced $300 million for the state. Ibid. According to the Louisiana Mid-Continent Oil and Gas Association, or LMOGA, this impact has created a “multiplier effect” in the Louisiana economy. This means that the processes in extracting, refining, and pipeline work has created other companies just to make the products or the transport products, is all from this multiplier effect, or ripple effect. For example, many of the offshore oil companies will order their parts from Louisiana companies inland, where they will be made, bought, packed, and then transported out to the rigs for installment and drilling use. All of this costs money, which brings in the revenue for Louisiana companies and energy related industries.
In terms of the effect of the oil industry on everyday Louisianans, oil industry workers account for over 300,000 jobs in Louisiana and $16.1 billion in household earnings (“Louisiana Mid-Continent Oil and Gas Association”). Similarly, the state of Louisiana collected over $1.3 billion in taxes, licenses, and fees and another $1.1 billion directly and indirectly from households of oil industry workers.
Overall, it is amazing to see how the oil industry has grown from the little town of Jennings, LA, to a multi-billion dollar a year industry surpassing all other industries and trades within the state. It has both environmentally, economically, and culturally taken over the state to the point that it has become the bloodline of Louisiana. Although there have been many revisions and regulations put into place, there is still much to be done to ensure the environmental safety of Louisiana. It is easy see how the industry has been here for almost 140 years and, with its improvements in environmental protection and oil extraction efficiency, it will easily be here another 140 years (Shelia Esthay. “First Oil Well in Louisiana.” Department of Natural Resources. “Gas and Oil In Louisiana.” Gas and Oil In Louisiana).
