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LOUISIANA’S OIL AND NATURAL GAS INDUSTRY – A MAJOR CONTRIBUTOR OF NORTHWEST LOUISIANA’S ECONOMY

LOUISIANA’S OIL AND NATURAL GAS INDUSTRY

A MAJOR CONTRIBUTOR OF NORTHWEST LOUISIANA’S ECONOMY


Noted economist Dr. Loren C. Scott’s latest study, “The Energy Sector: Still a Giant Economic Engine for the Louisiana Economy,” shows that, with the increased exploration and production of shale, the oil and natural gas industry is now the foundation of Northwest Louisiana’s economy, including Caddo, Bossier, Desoto, Webster and Red River Parishes. With more than 4,200 energy employees making an average annual wage of $76,562 and a contribution of more than $98.5 million in local property taxes, it is clear that the energy industry has become critical to Northwest Louisiana’s employment, budget and economic success.

Other figures of note:

  • In Desoto Parish, the industry made up 60.7 percent of all property taxes collected by the Parish in 2016 and in Red River Parish, the industry made up 51.4 percent of all property taxes that year.
  • The energy industry provides more than $129 million in annual wages in Caddo Parish and more than $96.4 million in Bossier Parish.
  • The property taxes paid by the oil and natural gas industry in Caddo Parish increased by more than $77.1 million from 2005 to 2016.
  • The oil and natural gas industry generates more than 260,000 jobs in Louisiana – enough people to fill LSU’s Tiger Stadium three times over.
  • In 2015, the industry supported $72.8 billion in sales for Louisiana businesses and generated over $19.2 billion in household earnings for Louisianian That’s more than the gross domestic products of 100 of the 211 countries ranked by the World Bank in 2016.
  • The industry paid $688.7 million in direct taxes and fees, and more than $1.346 billion in indirect taxes and fees – for a total of $2 billion contributed to the state treasury.
  • Louisiana is the number two producer of crude oil and the number four producer of natural gas in the United States. With 18 refineries, the state ranks second in petroleum refining capacity.

“Thanks to the increase in shale exploration and production, the oil and natural gas industry in Northwest Louisiana experienced unprecedented growth for a number of years,” said Marc Ehrhardt, Grow Louisiana Coalition executive direct. “The level of new revenues being paid in parishes like Desoto by the oil and natural gas industry is a prime example of this growth. For some time, Northwest Louisiana was an example to the rest of the state of how partnering with the industry and creating a productive business climate can greatly benefit local communities. In order for Northwest Louisiana and the rest of the state to grow again, we must fix our unpredictable tax system and stop reckless lawsuits that threaten Louisiana’s appeal to businesses looking to invest and expand.”

To demonstrate the significance of the industry in Louisiana’s economy, Dr. Scott says, “It is helpful to think of the state as one large economic pond. Into the pond a rock is dropped labeled ‘energy industries.’ But this is not a pebble – it’s a substantial stone that creates a huge splash with ripples to the edge of the pond.”

In the study, Dr. Scott analyzed the oil and natural gas exploration and production, refining and pipeline industries and found that, even when the oil and natural gas sector is in a serious recession, the industry paid nearly $5.3 billion in wages for Louisiana workers in 2017 – 5 percent of total wages in the state that year. In fact, last year, energy jobs and earnings were found in 63 of Louisiana’s 64 parishes. Additionally, of those parishes, 13 had 1,000 workers each who were employed in the energy industry.

While the oil and natural gas industry generates more than 260,000 jobs in Louisiana, it is also building communities, neighborhoods and local economies for the workers and their families. In fact, for every job created in the energy sector, 3.4 additional jobs in other sectors are created. For example, in 2017 there were 3,724 people working at ExxonMobil Refinery in Baton Rouge but only 1,250 of those workers wore ExxonMobil shirts and the other 2,474 workers wore shirts like Performance Contractors, Turner Industries, etc. These jobs, which are vital to operations at the plant, are the small business owners, the construction workers and the neighbors that make our Louisiana communities the places we know and love.

Dr. Scott’s study also analyzed the effect of the industry on government-funded jobs, like teachers. He evaluated the salaries of teachers in Louisiana, an industry-heavy state, against the salaries of neighboring Mississippi, which has a much smaller industry presence. Partly due to the increased taxes paid by the industry, teachers in Louisiana, on average, make over $7,000 more each year than teachers in Mississippi. Clearly, the impact of the energy industry on Louisiana’s workforce stretches far beyond the facilities themselves.

The 2018 update, “The Energy Sector: Still a Giant Economic Engine for the Louisiana Economy,” is the sixth edition of this industry analysis; the first occurring in 1996.

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