Pipeline to the World

Port Fourchon vital to the U.S. economy

By MIKE BROSSETTE

Port Fourchon’s business is receiving the crude oil and natural gas produced in the Gulf of Mexico and transferring the two commodities elsewhere for processing.

The economic significance of the port to the country and to Lafourche and Terrebonne parishes was detailed in a report issued last Thursday by the Baton Rouge consulting firm Loren C. Scott & Associates at a conference held at the Greater Lafourche Port Commission building in Galliano.

“The place is out in the middle of nowhere, but it’s vital to the economy in the U.S.,” Scott said about the port.

The report, commissioned by the port commission, is an attempt to quantify the value of the activity at Port Fourchon. The figures were based on the price of oil in 2006 at $66 a barrel. Scott, a longtime economist at Louisiana State University, said the impact today could be nearly double that amount with oil selling at more than $100 a barrel.

“We had a professional economist look at it to tell us how important Fourchon is in terms of dollars,” said Port Executive Director Ted Falgout.

The port commission and Louisiana Economic Development funded the report.

In 2006, the 365 million barrels of oil serviced by the port was worth an estimated $24 billion, most coming from the deepwater Gulf of Mexico.

The deepwater Gulf yielded 341 million barrels of oil in 2006.

To convey the economic impact of the port, the report estimates the cost to the country and to Terrebonne and Lafourche parishes if activity at Port Fourchon were to shut down for several weeks.

If the port were to experience a three-week shutdown, the report estimates the nation would suffer $4 billion in lost sales and $1.1 billion in lost earnings because of the disruption to the oil supply.

A disruption to the flow of natural gas at the port would raise the amount of lost sales and earnings nationally by around one-third.

A three-week disruption in the oil flow at Port Fourchon could also raise the price of gasoline nationally by 21.6 cents a gallon and threaten 30,800 jobs.

Looking at the port’s local impact, the report states that businesses leasing space at Port Fourchon spent $49.3 million dollars on construction at the port in 2006. Those businesses took in $922.6 million in revenue that year.

The report states that, in 2006, more than $1.4 billion in business sales in Lafourche and Terrebonne parishes were supported by the port and $324 million dollars in household earnings in the two parishes can be traced to port activity. The port also created 7,301 jobs in that year in the two parishes.

The report estimates that $12 million in sales taxes collected by Lafourche and Terrebonne parish governments in 2005 were generated by activity at Port Fourchon.

Other speakers at the conference marveled at the growth of Port Fourchon, especially since the port’s viability was questioned in the 1990s when oil prices were low.

“In 1960, Fourchon was known as the place where Bayou Lafourche empties into the Gulf,” said South Louisiana Economic Council Director Vic Lafont.

Lafourche Parish President Charlotte Randolph said local taxes paid by businesses at Port Fourchon relieve the tax burden for Lafourche Parish residents.

Terrebonne Parish President Michel Claudet stressed the need for economic diversification, saying Terrebonne Parish was “like a ghost town” in the 1980s because of an overdependence on the oil industry.

Claudet said, “Terrebonne and Lafourche cannot thrive without each other.”

A pipeline for crude oil and natural gas produced in the Gulf of Mexico, Port Fourchon plays a significant economic role in Terrebonne and Lafourche parishes, according to a report produced by Loren C. Scott & Associates. “The place is out in the middle of nowhere, but it’s vital to the economy in the U.S.,” Scott said. * File photo