Letters: Oil sector poised for rebound

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Once oil prices began to drop precipitously during the summer of 2014, so did capital expenditures on offshore energy exploration and production in the Gulf of Mexico. Louisiana’s economy suffered as result. Now we’re beginning to see offshore capital expenditures rebound, and that’s good not only for the Pelican State but for the entire country as well. A new study by the Norwegian analyst firm Rystad Energy found that for every dollar invested in the North American shale market this year, a dollar is also earmarked for the development of new offshore resources. Both will receive approximately $70 billion in capital expenditures in 2017, an equivalence not seen since 2013. Two new field development projects, by BP and Shell, have now been sanctioned for the Gulf of Mexico. This trend is driven in part by higher oil prices, which have climbed from a low of less than $30 per barrel to roughly $52 per barrel today — and by cost-cutting and efficiency improvements undertaken by the offshore drilling industry and its suppliers.

With offshore deposits again becoming sound investments, the impact of this rebound on Louisiana’s economy in terms of jobs, growth and tax revenue is clear. But it’s also good for the country as a whole, as the offshore energy industry contributes significantly to U.S. energy security and supports hundreds of thousands of jobs in all 50 states and contributes tens of billion dollars in economic activity each year…

 

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