Diversifying Energy Supply Investments in Post Katrina in the Gulf of Mexico

Mark Kaiser and Allan Pulsipher. Funded by the U.S. Department of the Interior, Minerals Management Service and the LSU Coastal Marine Institute. Project Funding: $167,110.

Marginal production is an important source of onshore domestic supply in the U.S. One of every six barrels of crude oil produced in the country, and about eight percent of its gas production, is delivered from marginal (stripper) wells. The Gulf of Mexico (GOM) is a mature producing province and throughout its shallow waters oil and gas production is in steady, but slow, decline. Thus, marginal production is an important economic and environmental issue for the MMS and will play an increasingly important role in the years ahead.

The purpose of this study is to provide an empirical assessment of marginal and lost production in the GOM and to inform policy makers of the role of marginal production through a comprehensive economic, environmental, and regulatory analysis.

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