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Louisiana Mineral Board October 2012 Lease Sale Brings in $1.3 Million

Between 1990 and 2000, I served as an Assistant Attorney General and Counsel to the State Mineral Board. For six years, I was General Counsel. The Board was formed by Act 93 of 1936, and holds monthly meetings where the agenda includes the sale of oil and gas leases on state property, primarily state owned waterbottoms. The Board has a knowledgeable and hardworking staff consisting of geologists, engineers, attorneys, accountants, landmen, and other administrative support staff. Below is a press release regarding the October 2012 lease sale.

Mineral and Energy Board Lease Sale Brings $1.3 million in October

    Thursday, October 11, 2012

BATON ROUGE– The State Mineral and Energy Board conducted its monthly meeting and lease sale Wednesday, October 10th in the LaBelle Room of the LaSalle Office Building in Baton Rouge. The Board collected $1.3 million in bonuses in the October lease sale, bringing the new Fiscal Year ‘12-13, total collected to $7.1 million.


At this month’s lease sale, the Board awarded 12 leases covering 2,989 acres, out of 50 nominated tracts covering more than 81,192 acres.


The Board sold leases in Plaquemines and St. Mary parishes.



October Lease Sale Results

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Office of Conservation: Crude Oil at Sinkhole is not Diesel

Office of Conservation: Crude Oil Source May Link Sinkhole and Failed Texas Brine Cavern

Analysis indicates sinkhole “diesel slick” and liquid hydrocarbon found in cavern samples are likely raw crude oil from same source

    Tuesday, October 9, 2012

BATON ROUGE – Louisiana Commissioner of Conservation James Welsh said today that detailed, comparative analysis has revealed that the liquid hydrocarbon from the failed Texas Brine cavern and samples from the nearby sinkhole/slurry area strongly indicate that both are naturally occurring crude oil and not diesel – likely from the same underground source.


Experts theorized that early analysis of the substance coating the surface of the sinkhole/slurry area showed it could be a “diesel-range” hydrocarbon – meaning it contains some of the same hydrocarbons as refined diesel fuel; however, that classification has now been ruled out.


Welsh said that early analysis was primarily aimed at establishing potential toxic effects, and used the term “diesel-range” as a rough classification, with further analysis needed to determine the nature of the substance more precisely.


“Distinguishing between ‘diesel fuel’ and ‘diesel-range crude oil’ is critical to the effort to ensure public safety by determining the cause of the cavern failure and the sinkhole, and their possible link to each other and to the natural gas that has been found in the aquifer in the Bayou Corne area,” Welsh said. “While our ongoing review of operational records on the Napoleonville Salt Dome has not shown one single underground source known to contain enough diesel fuel to cover the sinkhole/slurry area, an underground oil-and-gas formation could easily account for the amounts found on the sinkhole/slurry area surface and in the cavern.”


Welsh said that better understanding of the source of the crude oil could also help better identify the source of the natural gas in the aquifer because oil and natural gas are often found together in productive formations.


Additionally, he noted that ongoing “fingerprint” analysis of natural gas samples from Bayou Corne-area bubbling sites has now ruled out the nearby Crosstex butane storage caverns and Acadian natural gas storage caverns as potential sources of the natural gas bubbling.


Welsh also said that as analysis of the failed cavern and sinkhole is ongoing, work has progressed on construction of the vent wells – with initial flaring of natural gas expected to begin by Friday.


“We discovered natural gas in both wells sites near the sinkhole and are now working as quickly as possible to remove it through these vent wells,” Welsh said. “However, the initial analysis of the third well, sited on the west side of Bayou Corne, reveals that it does not have an accumulation of natural gas, though analysis will continue at that well as the work continues throughout the area to resolve the situation for the community.”



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LPSC Residential Rate Comparison Gas Distribution Systems

Attached you will find the September 2012 Residential Rate Comparison for Gas Distribution Systems regulated by the Louisiana Public Service Commission. The total rate paid by customers consists of the Purchase Gas Adjustment (“PGA”), Customer and Commodity Charge.

For the month of September 2012 from a cost of gas perspective, the high is St. Amant Gas Company at $10.6290/MCF, while the low is  Livingston Gas and Utility Company at $3.997/MCF. From a total rate perspective, the highest base combined rate is Livingston Gas and Utility Company at $14.94/MCF, and the lowest is Entergy Gulf States Utilities at $8.08/MCF.     LPSC Copy of September 2012 Gas Bill Comparison


LPSC Residential Electric Rate Comparison for October 2012

Attached you will find the Louisiana Public Service Commission’s Residential Electric Rate Comparison for October 2012. Louisiana electric customers are enjoying the low price of natural gas which is reflected in low electric rates. By way of comparison, for a typical customer usage of 1000 Kwh/month, the highest and lowest cost providers of electricity in Louisiana are as follows: Cleco continues it’s trend of having the highest electric rates in Louisiana at $113.81 for 1000 Kwh/month. Claiborne Electric Cooperative is the lowest cost provider at $74.11 for 1000 Kwh/month. The cost basis for providing electric service is somewhat different for investor owned utilities like Cleco, versus electric cooperatives like Claiborne. A more accurate comparision of investor owned electric utilities shows Cleco at the highest as mentioned at $113.81 for 1000 Kwh/month, with Entergy Gulf States the lowest at $84.85. The electric cooperative with the highest rate is Jefferson Davis Electric Co-Op at $95.76 for 1000 Kwh/month, and the lowest, as mentioned, is Claiborne Electric Cooperative at $74.11 for 1000 Kwh/month. The attached spreadsheet gives more detailed information on each electric utility providing service in Louisiana. LPSC Copy of Residential Bill Comparisons By Month for October 2012

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About Belton Consulting, LLC

Belton Consulting, LLC was founded by Emory A. Belton, Jr. with the goal of providing a unique resource in the energy industry. Our clients put their trust in Belton Consulting, LLC to represent their interests before legislative bodies, regulatory agencies, other state executive branch agencies and departments, and local government. Read More

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