We are closing in on the two-year mark for the historic drop in crude oil prices. In the span of 2014-2016, the industry has seen the price for a barrel of oil drop from north of $110 to south of $30. This crash has brought about great hardship for the Louisiana oil and gas industry as well as the entire job market within our state. We have seen well over 10,000 jobs lost in Louisiana and more than 350,000 jobs lost nationally.
In addition to the record low crude oil prices and the vast loss of jobs, elected officials across coastal Louisiana are being told – “Sue the oil and gas industry for alleged damage to the coast or the state will do it for you”. Certain coastal parishes have already filed suits, such as Jefferson and Plaquemines Parish, but many other coastal parishes are opposed to the suits due to the immediate impact more lawsuits would have on their respective parish economies. Every parish in our state has been impacted by oil and gas jobs in some fashion. But now, not only are oil and gas jobs fewer and further between due to low prices, but the ones that do exist are now threatened by coastal and legacy lawsuits from our elected leaders.
In addition to low prices and legal challenges, A third element that brings heart burn to the Louisiana oil and gas industry is the uncertainty what OPEC (the Organization of Petroleum Exporting Countries) will or will not do at their next meeting in Vienna at the end of November. The OPEC Secretary has given a nod to international media outlets that OPEC will indeed place a cap or a freeze on daily production by the OPEC member nations. However, Iran and Iraq have both indicated that they have interest in escalating their respective production levels to compensate for the last two years of pitiful oil prices. Both of their economies have taken major blows due to the downturn. So while OPEC offers hope of a freeze in daily production, they are willing to admit that the freeze is contingent on what Iran and Iraq decide with regards to their daily output. All of this just means one thing for our industry, more uncertainty.
However, its not all dark clouds on the horizon. If we have said this once, we have said it a thousand times – the hard working men and women of Louisiana’s oil and gas industry are a resilient people. No matter the hard times that have fallen, our people get back up and keep fighting. They are fighting for a way of life – not just a job. The first well was spud in 1908 in Jefferson Davis Parish by a wildcatter that had an end goal in mind – finding oil. This process has been repeated over and over in this state for over a century. So while the international crude oil market and our government may be making drilling a well extremely difficult in Louisiana, we are confident that we will make it through this tough time.
Here is the key: we have to make sure that when the tide turns and the industry rebounds, we have a legal, regulatory and fiscal environment that attracts investment dollars instead of chasing it away. Our leaders at the state and local level, have a choice to make, lets make sure they choose a thriving oil and gas industry for Louisiana.