Letter: The looming financial crisis behind the increase in hunting and fishing licenses

Letter to the Editor - Published 10:10 am CT Jun. 17, 2021

As a lifelong hunter and fisherman, I’ve come to accept that license fees go up over time. 

I support the Department of Wildlife and Fisheries and value the department’s stewardship of our public lands and waters. I am fortunate to be able to afford the higher license fees and will continue to pay them as long as I am physically capable of experiencing the wonders of our Sportsman’s Paradise. 

Supporters of the LW&F, legislators and media, have blamed the need to raise license fees on the fact that oil prices have fallen, dropping roughly $60 million in less than a decade. As a mineral consultant, I have been aware of the declining state revenue from state oil and gas production for some time now and have become concerned that it is an issue that demands debate and action in the very near future. 

The price of a barrel of crude does indeed fluctuate over time and periodic lower prices do reduce revenue but Louisiana’s problem is not the price per barrel, it is the decline in production volume. 

In order to place the following data in perspective, I need to divide the oil and gas industry into “state oil,” produced from state lands, waters and the three miles of Gulf of Mexico that are state owned, from federal Gulf of Mexico oil and gas production. 

Louisiana does not receive direct revenue from Deep Water Gulf of Mexico federal oil and gas production. The federal government does allocate a percentage of royalty revenue back to coastal Gulf states through the GOMESA program but that revenue total is capped and the percentage allocated to each Gulf Coast state is mandated to be invested in coastal protection and restoration.

Over the last 26 years, state oil production has declined 82% from an annual reported volume of 125,354,215 barrels in 1995 to 34,908,400 barrels in 2020. The annual rate of decline over that period of time is 3,476,685 barrels. 

If the decline rate remains within the average, Louisiana state oil production will reach a theoretical zero in 10 years.  This is not only a state revenue problem, it is a state employment problem. 

In 1995, there were 1,713 oil companies reporting production to the state. In 2020, there were 887. A more granular breakdown of the 2020 numbers reveals that of those 887 companies, 14 reported a negative volume, 178 reported zero volume, 175 reported production of less than 1000 barrels and 292 reported production of less than 10,000 barrels.  Only 228 companies produced more than 10,000 barrels for the year or more than 27.4 barrels per day on average. This data is sourced from the state oil and gas database, SONRIS, and is of public record.

In my opinion, the failure to prove up new Louisiana oil fields utilizing the cutting-edge technological advancements of the last 20 years is not the fault of the industry as numerous efforts have been made: the Tuscaloosa Marine Shale in the Florida parishes, the Austin Chalk across central Louisiana and the Lower Smackover-Brown Dense in north Louisiana for example. 

The problem is a lack of economic unconventional oil basins such as those in Texas.  Lacking discovery of an economic unconventional oil play, state oil production will continue to decline. I think it is time for our state media to highlight this challenge and lead the public debate as to how to manage the end of state oil. The impact on state revenue and jobs will be significant. 

Skip Peel

Shreveport