May 19th, 2009 Gas field gives north La. big lift
haynesville economic impact Saturday, May 16, 2009

By Jen DeGregorio
Business writer
Last year’s discovery of an underground natural gas field near Shreveport has softened the blow of a national recession in north Louisiana, according to a study commissioned by the state Department of Natural Resources.

A swarm of energy companies has descended upon the state to tap the natural gas trapped inside the sprawling Haynesville Shale, creating hundreds of jobs to operate equipment and perform other tasks. While national unemployment rose last year, employment grew during every month of 2008 in the region around the shale, according to the study by Loren Scott, an economist who runs a Baton Rouge consulting firm.

The growth occurred despite problems in north Louisiana’s manufacturing sector. The study pointed to buyouts and a shift reduction at a General Motors plant and the closure of plants by Beaird Industries and Georgia Pacific, a plywood company.

Spending in Caddo Parish has skyrocketed, said Randy Lucky, the parish’s assistant administrator. Sales-tax revenue is projected to reach $13 million by the end of the year, more than double what the parish usually earns from the sales tax, he said.

“There are a lot of folks who are making real good money on these rigs that weren’t before,” Lucky said.

At a time when drilling activity has retracted nationwide as energy companies deal with slipping commodity prices, exploration and production has continued in the Haynesville Shale. There were 75 rigs operating in north Louisiana last week, an increase of about 31 percent since early last year, according to data from DNR.

State officials expect activity to grow further as the economy begins to recover.

“The Haynesville Shale is very young in its development,” said James Welsh, Louisiana’s conservation commissioner.

But the influx of industry also has caused problems. Extracting natural gas from the shale is an energy-intensive process, called fracturing, which requires large blasts of water. Companies initially were using an underground aquifer called the Carrizo-Wilcox. But with so much activity in the area, the aquifer was becoming depleted, causing problems for farmers and others who use the aquifer for domestic purposes.

“We were getting just tons of complaints,” Welsh said.

DNR has since asked companies to use groundwater from a different underground aquifer. The shift has taken the burden off of the Carrizo-Wilcox, according to Welsh.

The department also is trying to address concerns about noise and pollution near areas with dense populations. A proposed order by DNR would require natural gas producers in the Haynvesville Shale to keep wells a certain distance from dwellings and businesses, abide by pollution standards and to treat urban areas with special consideration.

Sen. Robert Adley, R-Benton, wants the state to compensate parishes in the Haynesville Shale for the negative effects of natural gas development. Senate Bill 306, which Adley filed this session, would take a portion of the revenue the state collects from Haynvesville production and dedicate the money to infrastructure improvements in affected parishes.