The offshore oil industry has a large presence in Louisiana. The state is one of only six that allow coastal drilling. Only one state, Texas, plays host to more oil rigs than Louisiana does. A number of companies take advantage of the state's plentiful resources, creating a $70 billion industry.
Offshore drilling has been allowed in Louisiana since 1947. Today, about 172 oil rigs can be seen off the state's coast in the Gulf of Mexico. In 2006, geologists estimated that an area 175 miles from the state's shore could hold between 3 billion and 15 billion barrels of oil, according to "USA Today."
Numerous companies own offshore real estate in Louisiana to reap the benefits of the state's oil reserves. Some of the key contenders include Diamond Offshore Drilling, Cubic Energy, Transocean, McDermott, Chesapeake Energy Corp., Petrohawk and Magnum Hunter Resources. After the recent discovery of the oil-rich Haynesville shale, even more companies rushed to buy drilling credits.
Offshore oil drilling has had a significant impact on Louisiana's economy. The state receives about $1.5 billion a year from oil and gas revenue and will receive even more after a 2017 law goes into effect, giving the state rights to a portion of oil companies' royalty payments. The industry provides jobs for more than 320,000 of the state's residents.
The effects of offshore oil drilling can be seen in the 10,000 miles of canals dug by companies to transport the oil they recover. Chris John, of the Louisiana Mid-Continent Oil and Gas Association, says that drilling can now be done without hurting the environment. However, environmentalist Richard Charter, of Defenders of Wildlife, blames the companies' canals for destruction of wetlands and erosion of the coasts. The transport of oil from offshore rigs also carries the risk of spills, like one in 2008 that released 420,000 gallons of fuel.
Whether offshore oil drilling will remain popular is up for debate. Much of the recoverable oil lies in very deep water, where it is more expensive for companies to drill. Combine that with the clamor for more "clean" forms of energy, and oil drilling's future has yet to be seen.
