ALICE — For a city that always has lived and died by the oil field, life is good right now.
Flush with cash generated from sales and hotel occupancy taxes — all bringing in money associated with the oil and gas boom — the town is planning something most South Texas cities couldn’t contemplate even a few years ago: paying for a new event center without dipping into reserves and without taking on debt.
In the past two fiscal years, Alice set aside more than $4 million in seed money for the project, envisioned as a multipurpose convention center and natatorium. It has committed $70,000 to an assessment to determine the type and scale of facilities the community wants.
This phase included a town hall meeting Tuesday night, dominated by the community’s swimmers, including swim team coaches and student athletes lamenting the practice time lost on hourlong bus rides to and from Corpus Christi, site of the nearest pool that serves their training needs
Years from now, Alice swimmers may not draw a connection between the convenience of a modern, hometown pool and the heavy oil field trucks that lumber to and from town with loads of sand, water and drilling equipment. But to project planners and city leaders, that connection is everything.
Alice sits just south of the Eagle Ford Shale, a 400-mile long underground rock formation in Central and South Texas unleashing ancient stores of natural gas and crude oil with new technology called hydraulic fracturing. In the past two years, oil field service companies have expanded their Alice facilities, brought hundreds of jobs and filled up every hotel room in Alice, prompting more to to be built.
“If Eagle Ford Shale was not in play to the level it is, there would still be a need (for a multipurpose center), but it would not be as big,” City Manager Ray De Los Santos said. “There would still be funding available, but it would not be as much.”
For the fiscal year ending Sept. 30, Alice budgeted $650,000 a month in sales tax revenue. Only one month came in under $1 million, giving the city a $6 million surplus.
The event center project was being considered even before the Eagle Ford boom started in earnest in 2009. But the facility almost surely will be larger than what was initially imagined because the city can afford it, and because it anticipates the demand will be there to support it for years to come.
Oil boom and bust cycles notoriously are unpredictable and, at least in the past, short-lived on the boom end. But with Eagle Ford, analysts are expecting a ramp-up in production to last as long as 10 years, with production remaining steady at least another decade.
“This has changed the model for communities in South Texas because they have a long-term horizon where they can plan for capital improvements,” said John Michael, project engineer for Naismith Engineering. Naismith is conducting the needs assessment in Alice and has contracts with governments throughout the region.
Michael said there has been a dearth of new swimming pools in South Texas in the past 30 to 40 years because the last bust cycle drained the financial resources of communities and they never fully recovered.
De Los Santos said Alice isn’t taking Eagle Ford longevity for granted. Other South Texas cities have struggled with keeping convention centers and similar venues afloat. Last fiscal year, the American Bank Center convention center and Selena Auditorium in Corpus Christi posted a $1.3 million loss. And in Aransas Pass, the convention center has become a political football as officials try to figure out how to make it profitable.
It’s unclear how much the Alice multipurpose center would cost, where it will be built or exactly what it will entail. Project planners want to spend more time gathering input before making decisions.
The $70,000 study includes market analysis, financial projections, economic impact analysis, and aquatic and convention center complex conceptual analysis, De Los Santos said.
The general vision is a campuslike setting with meeting facilities, room for a privately-developed hotel, walking trails in a parklike area, and, of course, the pool.
Swim team coaches, members and athletes told the planners Tuesday that the city, with only one six-lane municipal pool that’s at least 30 years old, sorely needs a facility ready for competition, for family relaxation and for general health in a community suffering high obesity rates.
The town has a nonprofit swim group of more than 100 participants in the summer, and its school swim teams regularly compete at the state level.
Alice High School‘s senior class president, Horacio Rangel, said he rides two hours on the bus every day to keep up his swim training, but the bus isn’t the best environment for homework. He recently dropped to No. 22 in academic ranking in his senior class.
“I’d be top 20,” he said, “if I had more time to study.”
Ask anyone on the bayou if they know about Port Fourchon, and you’ll no doubt get a yes. “That’s where my daddy works.”
“That’s where we launch our boat.” “That’s where oil comes from.”
But when you ask the average person how Port Fourchon works or what the Greater Lafourche Port Commission does, the answer is not so clear. Most people don’t know what a great gem we have here in our community, so here is a brief rundown: who we are, what we do, how we’ve worked our way into being one of the nation’s most important economic engines and why it is vital to keep that engine running.
The Greater Lafourche Port Commission is a political subdivision of the state of Louisiana, formed in 1960 and governed by a nine-member board, the only elected port commission in the state of Louisiana.
We have 37 employees that do an outstanding job of handling the day-to-day operations, maintenance and administration of Port Fourchon and the South Lafourche Leonard Miller Jr. Airport. The commission operates predominantly as a “landlord” providing basic infrastructure to its tenants.
We construct roads and waterlines, dredge channels, construct bulkheads and provide basic land at Port Fourchon.
We provide basic airport infrastructure like a runway, parallel taxiway, road access, waterlines, etc. Once the basic infrastructure is in place, the commission leases the property to businesses looking to serve the needs of industry.
At both the port and now the airport, the commission operates with its mission statement in mind: to facilitate the economic growth of the communities in which it operates by maximizing the flow of trade and commerce. We do this to grow our economy and preserve our environment and heritage.
Port Fourchon sits at the mouth of Bayou Lafourche, where it empties into the Gulf of Mexico and is easily accessible from any area in the Gulf. Located near the end of La. 1, Port Fourchon is in the center of one of the richest and most progressive industrial areas in the Gulf region.
We are constantly expanding to meet the needs of business and industry. Under the direction of the commission, the port is fortunate to have the knowledgeable leadership, available land and irrefutable logistical advantage that enable it to be the nation’s premier port for the continued support of oil-and-gas activity in the Gulf of Mexico.
Port Fourchon has grown from humble beginnings in 1960 into 1,700 acres in the most efficient location to service the needs of the Gulf oil-and-gas industry, with state-of-the-art facilities that exist nowhere else in the world.
The port’s tenants provide services to 90 percent of all Gulf deepwater activity and about 50 percent of drilling rigs in the entire U.S. Gulf, both shallow and deepwater. This activity, coupled with Port Fourchon being the service base for the Louisiana Offshore Oil Port, means that Port Fourchon plays a strategic role in furnishing this country with about 18 percent of its entire oil supply.
The South Lafourche Leonard Miller Jr. Airport in Galliano has proven to be a valuable element of the transportation system of Lafourche Parish and the state. Recognizing the potential major importance of the SLA in providing air transportation services to support the continued development of Port Fourchon and offshore mineral exploration and production, the Port Commission acquired the SLA in 2001. The GLPC also acquired the 1,200 acres surrounding the airport, which is open for industrial development and industrial housing. The airport has rapidly increased aircraft traffic since completion of its 6,500 foot runway with 75,000 pound wheel-load capacity, resulting in a 300 percent increase in jet traffic. We continue to expand the airport, with plans to add new navigational aids, hangars and taxiway.
In January 2010, after working for the commission since September 2005, I was afforded the opportunity to become the executive director, only the second person to do so since the port’s inception. I knew it would be a challenge, with the tough economic times the country had been in, all of the construction projects we were involved in at the port and airport and the planning of the port’s 50th anniversary celebration, but never did I imagine what would be coming. Obviously, I am talking about the terrible tragedy of April 20, 2010, when the Deepwater Horizon exploded, killing 11 men and causing the worst oil spill in our nation’s history.
Port Fourchon was at the epicenter of the response, recovery and subsequent cleanup effort for this disaster. Since facilities at the port were the base for the Deepwater Horizon, the evacuated rig workers were brought to Port Fourchon en route to getting back to their families.
With that began the influx of media and all that entails. Once it was realized that there was a major problem with the well and the oil was being emitted uncontrolled, we were tasked with preparation.
We began working with Lafourche Parish President Charlotte Randolph and her emergency preparedness staff to formulate a plan of action for protecting the parish’s coastline and keeping the vital economic activity at Port Fourchon operational throughout cleanup and waterway closures.
We spent countless hours meeting and planning, coordinating breach closures and ways to continue keeping Belle Pass, the port’s main waterway, open even though oil was approaching. When we knew that it was only a matter of time before we saw oil impacting our coast, we offered the commission’s Port Fourchon Operations Center for response collaboration efforts.
At that point, our Ops Center became the Lafourche Parish Emergency Operations Center for the oil-spill response. Our approach to the response was not “us against them,” but “How can we help?” That proved to be very successful. The collaborative group was comprised of the United States Coast Guard, BP, Governor’s Office of Homeland Security, Louisiana National Guard, Louisiana Department of Wildlife and Fisheries, Lafourche Parish Government, Lafourche Parish Sheriff’s Office, Port Fourchon Harbor Police and Port Commission executives.
Just when we were beginning to get a handle on the oil spill, the president and his administration decided to issue an arbitrary six-month moratorium on drilling and permitting in the deepwater Gulf of Mexico.
This action brought our region, a region of constant growth and record low unemployment that was not seeing much negative impact from the struggling national economy, to a screeching halt. Knowing that the tenants of Port Fourchon were going to be severely impacted by the federal government’s careless actions, the Port Commission proactively chose to freeze escalation fees and reduce basic land rental rates by 30 percent for one year.
This action served its purpose effectively, even though it meant millions of dollars of lost revenue for the port commission, because it helped our port tenants, especially the small, growing companies, to have a little breathing room to develop their financial strategies and to cope with the sudden moratorium-induced loss of current and future business. It was scary to many of us when the cranes stopped moving in Fourchon. We wanted to let our tenants know that we were right there with them in the trenches, fighting against the one-two punches of oil spill and moratoriums.
The moratorium was lifted on Oct. 12, 2010, and despite a horde of new regulations, rules, processes and acronyms, still no permits were issued for deepwater drilling. Moratorium became “permitorium.”
To this day, permit issuances for both deepwater and shallow water activities remain few and far between. Based on the Department of Interior’s own statistics, permits for deepwater activities are 40 percent off the mark, shallow-water permits are 60 percent down, and overall turnaround time for all permits is 40 percent slower. I, for one, believe that this is unacceptable.
These permitting issues that continue to inhibit the oil-and-gas industry have a cascading effect on this nation as a whole, not just “Big Oil,” as the Obama administration would say. It starts at the top with the oil-and-gas companies, then gets transferred through the supply chain.
The industry purchases supplies, equipment, high-end technology, geological and other services from vendors in every corner of the United States. It reaches each household in some form or fashion. The downturn in energy exploration and production in the Gulf of Mexico has affected not only Port Fourchon but the entire country.
Because of the importance of the oil-and-gas industry to our way of life, the commission helped organize the Gulf Economic Survival Team. This organization, through the leadership of Department of Natural Resources Secretary Scott Angelle, has been instrumental in facilitating what progress has been made on the permitting front. GEST and its Executive Director Lori Leblanc must be applauded as they have brought industry executives and BOEMRE staff together in an attempt to work out the regulatory/permitting issues. There is a still huge “activity gap” between the regulatory regime’s willingness and ability to issue much-needed permits and the oil-and-gas industry’s capabilities to invest in the energy security of our nation.
According to a study commissioned by GEST, if the bureau could close the “activity gap,” 2012 could see 230,000 American jobs, $44 billion added to the U.S. gross domestic product, $12 billion in tax and royalty revenues, 400,000 barrels more of oil produced per day, and a reduction of $15 billion in imported oil costs to the nation. In a time in this country when we have a jobs problem, a revenue problem, a spending problem and an energy problem, the answer is clear. Issue the permits now! There are thousands of workers in Port Fourchon who just want to see the cranes moving again.
Obviously, the last two years for the commission, Port Fourchon, and its tenants have been a roller-coaster ride. Personally, it has been an enormous learning experience. From federal, state, and local agency head visits to television interviews and testifying at congressional hearings, the first two years of my tenure as executive director have molded the future and set a path for what is to come.
We at the commission stand ready and able to tackle any challenge that comes our way.
We do this with the mindset of what is best for our community. That is why in looking toward the future, we plan to continue to expand Port Fourchon and the South Lafourche Leonard Miller Jr. Airport.
The issues we currently face will be resolved, and we stand poised to capitalize on the activity that will follow. We will continue to support our tenants in every way possible as a sign of appreciation for the prosperity that they have given to our community. Port Fourchon works. Period!
Chett Chiasson is the executive director of Port Fourchon.
6 August 1957
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