December 2014

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The last six to seven months have seen an approximate 70 percent drop in crude oil prices, from $115 per barrel in June to just $45 as of January 14. There are multiple factors contributing to the significant drop in price, one of which is the United States’ new status as the world’s largest oil producer, increasing its oil production by 95 percent in the last six years through the use of horizontal drilling and hydraulic fracturing. Because the country now imports significantly less oil than it had previously, it has created an excess supply. Other oil-producing countries are not willing to reduce their own production to reduce the supply and increase the demand, thus restoring the fallen price. The consequences of falling oil prices are as legion as the causes, including the cancellation of oil and natural gas projects, the layoff of oilfield workers, a decline in the number of oil rigs and serious economic disruption in countries like Russia and Iran. (more…)

The Town of Abita Springs filed a suit on December 1, 2014, seeking a declaratory judgment to block the drilling of an oil and gas well about 40 miles north of New Orleans into the Tuscaloosa Marine Shale. Earlier this year, Helis Oil & Gas Company, LLC requested and obtained a unitization order from the Louisiana Office of Conservation. In September 2014, Helis applied for a permit to drill, and the Office of Conservation held a public hearing in November but has not yet issued the permit. The new suit contends that the construction of a well pad and related structures, along with the well itself, will violate local zoning ordinances as the site has been zoned for residential use. Moreover, the suit contends that the drilling activities will cause detrimental impacts to the surrounding residential areas and a high school located near the proposed site. Finally, the town alleges that the well may pose a “risk of contamination” to an aquifer that serves as a source of drinking water for the town. (more…)