State of the Oil Industry: Has Louisiana Reached Its Peak?

Experts and Stakeholders Weigh In

Nearly 8 percent of Acadiana’s jobs are oil and gas related. But that doesn’t come close to the industry peak.

“The oil and gas industry is pretty important in the region. We have currently about 14,000 jobs that are oil in gas related, so it’s still a very large number. It’s about 8% of the regions total,” says Acadiana Business Economist Dr. Gary Wagner. “If you go back five years to 2013, 2014 we had almost 25,000 jobs in oil and gas. So we’re down about 9,000 jobs from the peak at that point, which is one of the things we’re all feeling.”

With the state’s overall unemployment rate at a steady decline, some are wondering if oil field jobs will follow that same trend. Dr. Wagner says many factors contribute to the industry’s employment.

“You also had the creation of fracking technology which made it significantly cheaper to extract oil and gas from areas that are called shale plays, where we weren’t previously able to extract gas. So what happened is that made it significantly cheaper, and a lot of that activity that was taking place in the Gulf and other places, has now moved so some of these shale areas where the cost of extraction is much lower,” says Dr. Wagner.

Beta Land Services is one of the many Acadiana based oil and gas companies to open offices out of state. The company’s President and CEO, Brian Hanks, has worked in the industry for over 20 years. He says he was forced to relocate offices not because of extraction costs, but due to a hostile legal climate.

“I had to open an office in Midland, TX. In the Permian Basin. Many other service companies here have had to move to Texas where there is tremendous amount of wells being drilled. You still have people that are involved in the oil field from here. They just have to travel,” says Hanks.  “You’ll have people throughout the industry and across the country tell you, ‘Some of the best oil and gas rocks are here in South Louisiana,’ but the stuff here, the legal environment, permits people from coming here… for fear of being sued.”

Hanks is referring to what’s known as “legacy lawsuits.”  These lawsuits claim that oil and gas operations, sometimes from many years ago, caused property to become polluted and contaminated.

“When you buy a lease here, or when you buy property here, the view of the governor and that small group of trial lawyers is, you inherit every problem that’s been on that property,” says Hanks.

When asked if Louisiana can go back to a time when the gas industry was booming, Dr. Wagner says its a low possibility.

“So even if we see a rebound in the industry I doubt we would see employment levels grow to 25,000 again.” “The oil and gas industry is really important in a since that it’s not a large share of employment, it’s a modest share, but the average salary in the oil and gas industry is very high. So the average oil and gas salary is twice the weekly salary for an average job in Louisiana, so that why it hits so hard.”