ILTA Publishes Economic Impact Study of Midstream Sector in Louisiana, Highlighting Consequences of Expanded LPSC Jurisdiction to Terminal and Storage Facilities

On May 12, ILTA, partnering with Acadian Consulting Group, published a comprehensive economic impact study of the midstream sector in Louisiana.

Louisiana's midstream sector is incredibly robust and benefits from the strong partnerships of the bulk liquid commodity actors up and down the supply chain. As discussed in the publication, Louisiana midstream activities currently contribute over $300 million in "direct" economic output, which has been growing at a rate of over 15% per year, all while supporting up to 62,000 direct jobs and over $2.5 billion in direct wages and compensation for the state's workers.

Ultimately, the study was used to highlight the potential negative impact of increased regulatory oversight and alternative statutory definitions for the midstream sector:

A recent decision issued by an Administrative Law Judge (ALJ”) with the Louisiana Public Service Commission includes a statutory interpretation that will have negative impacts on Louisiana’s crude oil and liquids midstream industry and will fundamentally change Louisiana’s historic relationship with midstream activities by subjecting terminal and storage facilities to new oversight.

The timing of this decision is unfortunate and will have important ramifications for state critical infrastructure development and America meeting its energy dominance goals. This alternative statutory interpretation will likely result in considerable near and intermediate term uncertainty that will reduce industry investment and increase operating costs given new and unknown regulatory compliance costs. This report estimates new compliance costs for the midstream industry will reduce economic output by $297 million, reduce employment by 1,428 job-years, reduce labor income by $100 million, and reduce value added by $163 million.

For any questions on the study, please reach out to ILTA Senior Director of Government Affairs Jay Cruz at jcruz@ilta.org.