|Select Economic and Energy Data†||Value||State Rank|
|Real Gross Domestic Product, per capita||$32,842||16th lowest|
|Gasoline Price, per gallon||$2.71||15th lowest|
|Electricity Price, per kWh||7.16¢||9th lowest|
Louisiana has low electricity prices, 28 percent below the national average. This affordability has been aided by the state’s rejection of expensive regulations that would increase the price of electricity. Almost half of Louisiana’s electricity is generated from natural gas, while coal provides about a quarter of the state’s electricity. The state’s two single-reactor nuclear power plants produce most of the rest of the state’s electricity.
Including production of natural gas from the Louisiana Outer Continental Shelf (OCS), Louisiana is the second largest producer of natural gas in the United States, and fifth largest excluding the OCS. In addition, the state is the nation’s fourth largest producer of oil, excluding offshore areas. More oil is refined in Louisiana than any other state except Texas. Louisiana has some of the largest import terminals for natural gas and oil in the country, as well as some of the largest storage capacities nationwide. The Louisiana Offshore Oil Port is the only port in the United States capable of accommodating deep draft tankers. The largest of nine liquefied natural gas import terminals in the United States is located at Sabine.
Regulatory Impediments to Affordable Energy
Although affordable energy is a vital component of a healthy economy, regulations frequently increase energy costs. Regulations imposed in the name of reducing carbon dioxide and greenhouse gas emissions are especially costly. Carbon dioxide is a natural byproduct of the combustion of all carbon-containing fuels, such as natural gas, petroleum, coal, wood, and other organic materials. Today, there is no cost-effective way to capture the carbon dioxide output of the combustion of these fuels, so any regulations that limit carbon dioxide emissions will either limit the use of natural gas, petroleum, and coal, or dramatically increase their prices.
Below are some facts about Louisiana’s regulatory environment that are likely to affect the cost of energy or the cost of using energy.
- Louisiana does not cap greenhouse gas emissions.
- Louisiana is not a member of a regional agreement to cap greenhouse gas emissions.
- Louisiana does not require utilities to sell a certain percentage of electricity from renewable sources.
- Louisiana requires gasoline to be mixed with renewable fuels. House Bill 685, passed in 2006, requires a 2 percent blend of ethanol in gasoline and a 2 percent blend of biodiesel in diesel.[i]
- Louisiana does not impose automobile fuel economy standards similar to California’s, which include attempts to regulate greenhouse gas emissions from new vehicles.
- Louisiana requires new residential and commercial buildings to meet energy efficiency standards. Residential buildings must meet the 2006 International Residential Code (IRC), while commercial buildings must meet ASHRAE 90.1-2004 or the 2006 International Energy Conservation Code (IECC). The IRC, IECC (both developed by the International Code Council), and ASHRAE (developed by the American Society of Heating and Refrigeration and Air Conditioning Engineers) are model codes that mandate certain energy efficiency standards. Senate Bill 240, enacted in 2007, requires new and renovated major facilities funded by the state to exceed the state energy code by at least 30 percent. This standard applies to all buildings larger than 15,000 square feet in 2009, all buildings larger than 10,000 square feet in 2010, and all buildings larger than 5,000 square feet in 2011 and thereafter.
- Louisiana does not impose state-based appliance efficiency standards. Executive Order BJ 2008-8, issued by Governor Bobby Jindal, requires the State Division of Administration to increase appliance efficiency standards for state agencies, using Energy Star as a minimum standard.[ii]
- Louisiana does not allow utilities to “decouple” revenue from the sale of electricity and natural gas. Some states decouple revenue from actual sales, allowing utilities to increase their revenue by selling less electricity and natural gas.
† Data Sources: Real GDP per capita 2008: Bureau of Economic Analysis, News Release: GDP by State (June 2, 2009), http://www.bea.gov/newsreleases/regional/gdp_ state/gsp_newsrelease.htm; Unemployment: Bureau of Labor Statistics, Regional and State Employment and Unemployment–February 2010 (Mar. 10, 2010); Gasoline Prices: American Automobile Association, AAA Daily Fuel Gauge Report (Mar. 30, 2010); Electricity Prices: Energy Information Administration, Electric Power Monthly, Table 5.6.B., Average Retail Price of Electricity, (March 15, 2010), http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_b.html; Electricity Generation Data: Energy Information Administration, Electricity Generation 2009, http://www.eia.doe.gov/cneaf/electricity/epa/generation_state_mon.xls.
[i] Act No. 313 (La. 2006), http://www.legis.state.la.us/billdata/streamdocument.asp?did=399857.
[ii] La. Exec. Order No. BJ 2008-8 (Jan. 30, 2008) http://www.gov.state.la.us/assets/docs/OfficialDocuments/2008EOGreenGovernment.pdf.