January 26, 2024
The Energy, Chemical, and Maritime (ECM) Transition Council
About the Council
The Energy, Chemical, and Maritime (ECM) Transition Council was established at the request of Governor Jeff Landry to identify the most pressing challenges facing industry and to discuss and propose solutions to not only make government more efficient but also reduce barriers hindering economic growth. This Council was led by Gray Stream and included voices from across the political and policy spectrum. Following deliberation among members and multiple meetings with relevant agencies, the Council made the following recommendations:
Permitting Reform to Promote Regulatory Certainty and New Investment
Although primarily driven in recent years by onerous policies from the Biden Administration,
regulatory uncertainty has badly hurt Louisiana’s ability to compete. The current state
permitting process for new energy projects and industrial expansion has become decidedly protracted; costing Louisiana high-paying jobs and commensurate tax revenue.
1. Implement efficient and transparent permitting process reform through a “One App”
methodology which helps ensure that both our natural resources and our citizens are
protected while new investment and economic growth are not hindered.
2. and transparently define performance metrics to accurately assess efficiency. These
should include clear timelines for regulatory review.
3. Effectuate user-friendly online application systems to simplify the permit submission
process, giving regulators and public users clear direction on regulatory requirements
and real-time tracking of application statuses.
4. Evaluate how the agencies currently coordinate technology updates and upgrades
through the Office of Technology Services and how this process can be improved.
5. Invest in adequate capacity so permitting agencies can efficiently handle a growing
number of applications. This includes a review of compensation levels to ensure agencies
can recruit competitively.
6. Set clear guidelines for public participation to ensure that appropriate stakeholders can
express concerns without unduly delaying projects.
Create an Attractive Business Climate for Energy and Industry
Over the last two decades, Louisiana’s ECM industries have been pummeled not only by endless federal rules and regulations but also by out-of-state NGO activists who have clogged state agencies with permitting opposition. Aggressive plaintiff lawyers have usurped regulators, driving costs higher and forcing Louisiana ECM businesses to move their capital and jobs to states with friendlier business climates.
1. Enact comprehensive tort reform to shed the “Judicial Hellhole” label bestowed on
2. Issue a “Day One” executive order to recognize the importance of the ECM industries to Louisiana, sending a loud message that our State believes in energy independence and is “open for business.”
3. Standardize and streamline the approval process for the Industrial Tax Exemption
Program (ITEP) to help create more predictability for businesses considering capital
investment in Louisiana.
4. Work with the Attorney General to oppose burdensome, expensive, and unlawful federal mandates.
5. Continue fighting the radical Environmental, Social, and Governance political agenda
and ensure our State divests from corporate elites attacking our energy production.
6. Create more resilient, storm-hardened infrastructure with federal support to mitigate or eliminate the cost to ratepayers.
Embrace an “All of the Above” Energy Strategy
For decades, the oil and gas industry has employed hundreds of thousands of Louisianans. Oil and gas has not only been responsible for creating jobs and prosperity, but it also has contributed tax revenues critical to funding coastal restoration and hurricane protection. Including offshore production, Louisiana drills the second-most oil and third-most natural gas in the Nation. The Council agrees with the Governor that “Drilling=Jobs” and that those jobs, which have lifted countless people in Louisiana out of poverty, must be protected. Louisiana is also positioned to capture an outsized share of investment in new energy technologies and emissions reductions. Our services and manufacturing sectors are already seeing gains from renewable energy sources such as wind and solar. $55 billion of alternative energy related capital projects have already been committed that will ultimately create over. 25,000 jobs in Louisiana. These investments are largely driven by the opportunity to develop Carbon Capture & Storage (CCS) work in conjunction with new major industrial projects such as blue hydrogen, blue ammonia, and liquefied natural gas.
1. Ensure our State is prepared to effectively and efficiently permit safe and permanent CCS projects.
2. Explore an agreement between Louisiana and Texas on the transportation of natural gas across state lines through pipeline development.
3. Study sensible incentives and rebates modeled on the Louisiana Assessors’ Association
work on how to value above ground assets.
4. Support legislative framework and incentives to include Louisiana in the emerging EV
components industry now taking place in neighboring states.
Build a Modern Energy Workforce
Louisiana’s education system needs to evolve to meet the needs of modern industry. The jobs required within the ECM industries are typically highly specialized and thus highly
compensated. Our State should return to its status as being the preeminent place to be
educated on chemical, electrical, petroleum, and industrial engineering and should expand offerings in robotics and computer science.
1. Consider a “Louisiana First Jobs Act” that would direct the Louisiana Workforce
Commission to work with high schools, two-year colleges, and technical education
programs to train our State’s students for well-paying ECM jobs with the goal of
keeping more Louisianans working in state.
2. Explore adjusting the Taylor Opportunity Program for Students to meet the needs of
non-traditional students interested in industrial education.
Reform the Severance Tax
The current average rig count in South Louisiana has plummeted from 50 rigs (2011-2013) to just 3 rigs in 2023. For new conventional oil wells, Louisiana currently holds the distinction of having the highest severance tax rate for oil production among the continental U.S. at 12.5%, a figure notably higher than that of neighboring states. Research by the LSU Center for Energy
Studies validates that this high tax on new conventional oil wells impacts capital allocation decisions and that policy changes would result in more new wells being drilled, increasing royalty receipts, tax collection, and jobs.
1. Incentivize and amplify drilling in South Louisiana by evaluating and addressing the
severance tax on oil.
2. Instruct the DNR to furnish a comprehensive 24-month-to-month forecast detailing the anticipated commencement of new oil wells in Louisiana.