|An aerial view of busy Port Fourchon. [photos courtesy Brian Gauvin]|
Ted Falgout calls Port Fourchon “the nest of the goose that is laying the golden egg.”
You might suspect him of being biased, since he is, after all, the executive director of this fast-growing port at the southern tip of Louisiana. However, even a casual glance around Port Fourchon — its docks jammed with crew boats, offshore supply vessels and anchor handlers — instantly shows that Falgout is not exaggerating the importance of Port Fourchon to the maritime industry and the nation’s economy.
Port Fourchon started out in the 1960s as a tiny fishing center with modest ambitions to become a port of entry for bananas from Nicaragua. The banana trade ended up going to Gulfport, Miss. What Port Fourchon got instead was oil and gas, and a lot of it.
According to a recent economic impact study, Port Fourchon supports 90 percent of all the deepwater rigs in the Gulf of Mexico and about 45 percent of the shallow water rigs. To put this in perspective, the Gulf accounted for roughly 80 percent of U.S. offshore oil production in 2006 and 88 percent of offshore gas production.
That offshore oil and gas production is the golden egg Falgout was talking about.
The port’s importance goes beyond domestically produced oil and gas. Approximately
|Ted Falgout, the port’s director, showing photographs of the port. One of the principal advantages of the port is its location at the southern tip of Louisiana, putting it close to the oil and gas fields in the Gulf of Mexico.|
18 miles off the coast from Port Fourchon is a deepwater oil terminal known as the LOOP (Louisiana Offshore Oil Port). It is the only facility in the United States capable of handling ultra-large crude carriers (ULCC) and very large crude carriers (VLCC). A million barrels of crude oil a day is unloaded there. And that crude flows through Port Fourchon on its way to refineries around the country. This flow represents about a sixth of the country’s daily consumption of crude oil.
Port Fourchon is the nest for this golden egg, because it serves as the base for vessels that support the exploration, development and maintenance of this offshore oil and gas. Port Fourchon supplies the offshore industry with the people and materials it needs to operate.
It is a prodigious task.
Every day 1,200 trucks, 270 large vessels and dozens of barges move through the port. More than 1,000 people work in the port and 15,000 use it as their jumping off point to their jobs offshore. In 2006, 35 million tons of cargo moved through here by truck and by barge.
“In 1978, when I came to work here, there really wasn’t a port here,” Falgout said, “only muskrats and mosquitoes.”
Up until 1994, vessels based in Port Fourchon serviced only about 10 to 12 percent of the rigs in the Gulf. “Today it is over 50 percent. No other port is over 14 percent,” Falgout said.
|Following Hurricane Katrina, LA 1, the highway linking Port Fourchon with the rest of Louisiana, was underwater. Shown here is the Leeville Bridge, which spans Bayou Lafourche.|
What explains Port Fourchon’s rise from obscurity to dominance? The answer is a combination of location, timing and luck. But when it came to luck, it is the kind of luck that successful athletes exhibit — the ability to seize the moment when opportunity arrives.
The offshore industry hit hard times in the 1980s as the world went from an era of oil shortages to glut. Surprisingly, this decline worked to Port Fourchon’s advantage, according to Falgout.
Up until then, “there was a support base in every community along the coast,” he explained. Most rigs were close to shore and support vessels needed to travel only short distances. The vessels were small and did not need deepwater ports.
With the contraction in the industry, the big players needed to cut costs and consolidate operations. And support vessels were beginning to get larger and needed deeper water.
In 1984, Port Fourchon opened the first leg of its 600-acre E-Slip Development (so named because the docks were built in the shape of the letter “E”).
“By the mid-80s the advantages of the port were being recognized,” Falgout said. At the very southern tip of the Louisiana, the new facilities were close to the major fields and had the deep water needed by the newer vessels.
“Expansive as coastal Louisiana is, there are very few places where you can drive to
|A new nine-mile-long section of elevated highway is under construction. However, an eight mile section of flood-prone LA 1 still needs to be replaced to ensure access to the port in the event of a major storm.|
the Gulf of Mexico,” Falgout said, “Nowhere else can you drive a truck to bring cargo to the Gulf.”
Still, given the state of the industry and the Gulf in particular, Port Fourchon’s growth prospects did not seem very great. The Gulf’s near-shore fields were in decline and the Gulf was earning the nickname “the Dead Sea.”
The first leg of the E-Slip was fully leased, but it was unclear when, if ever, demand would develop for the other two legs of the “E.”
“We thought it would accommodate the port’s growth forever,” Falgout said.
The big change came in 1995 after the passage of the Deepwater Royalty Relief Act by Congress. The act provided the economic incentive. New technology made it possible to tap reserves in water thousands of feet deep. The boom had begun.
Construction of the second leg of the “E” began in 1995. “We expected it to last until 2010. By 1999 it was completely leased out as soon as it was completed,” Falgout said.
|About 35 million tons of cargo were handled by the port in 2006. Over 50 percent of the rigs in the Gulf depend on Port Fourchon for the materials and personnel they need to operate. No other port serves more than 14 percent of the rigs.|
Work on the third leg began in 2000. During the planning stages it was thought that it would give the port sufficient capacity through 2030. Wrong again.
“In the year 2000 we had not yet turned the first shovel of dirt, but it was completely leased out,” Falgout said.
So work began in 2001 on a second area. Called the Northern Expansion, this 700-acre project is being built on a larger scale to accommodate the newest generation of offshore platform support vessels. The slips in the original development were 400 feet wide. In the new one they will be 700 feet wide.
The three legs of the new project, known as the northern expansion, are designated as Slips A, B and C. The 3,000-foot-long Slip A is fully leased out. Half of the 7,000-foot-long Slip B has been completed and it is also leased.
“Every square inch of bulkheaded facility is leased,” Falgout said.
Construction of the 7,000-foot Slip C is due to start in 2009 and to be ready for service in 2011, and already there are expressions of interest in it.
This sounds like a story that should have a happy ending. But not necessarily. There is one troubling fact casting a shadow over Port Fourchon’s future.
To reach the port, vehicle traffic must travel over 17 miles of highway that are just a few inches above the level of the surrounding coastal marshes. The tidal surge that
|270 large vessels and dozens of barges move through the port every day.|
accompanied Hurricane Katrina put Port Fourchon out of operation for only a matter of days. But a direct hit by a storm could have long-term consequences that would be disastrous for the national economy.
“As fast as we flood, we drain. Seven days after Katrina we were back to 80 percent of operations,” Falgout said, adding, “There is no quick fix if your highway washes away.”
“If you can’t get there by road, we are inoperable,” he continued. “If the port couldn’t function, the capabilities to deliver these quantities (of supplies to the oil rigs) don’t exist anyplace else.”
The problem is beginning to be addressed. Construction has begun on nine miles of elevated roadway and bridges leading to the port. $350 million in federal, state and local funds have been allocated for the project.
But that still leaves eight miles of roadway with barely any freeboard above the marshes. Some $250 million would be needed to raise that roadway to the 22-foot standard of the highway under construction just to the north.
Henri Boulet is executive director of the LA 1 Coalition, a group pushing for construction of the highway, designated Louisiana 1, or LA 1, for short. His job is to make the case for the funding of the highway. It boils down to a very simple argument: Port Fourchon represents a key but vulnerable part of the energy infrastructure that the nation cannot afford to lose.
“It is serving such an important national interest that the federal government needs to step in to see that this gets done,” he said.
Falgout, of course, agrees. “It seems that you would build a sufficient highway system to sustain that access to their goldmine offshore,” he said.