LOUISIANA’S OIL AND NATURAL GAS INDUSTRY

STILL THE FOUNDATION OF SOUTHWEST LOUISIANA’S ECONOMY

Noted economist Dr. Loren C. Scott’s latest study, “The Energy Sector: Still a Giant Economic Engine for the Louisiana Economy,” reinforces what hundreds of thousands of Louisianians already know: the oil and natural gas industry continues to be the foundation of both the state and Southwest Louisiana’s economy. The following numbers represent Calcasieu, Cameron, Jefferson Davis, Allen and Beauregard parishes. With more than 3,000 industry employees making an average annual wage of $107,094 – more than double the state’s median household income – and a contribution of more than $53.5 million in local property taxes, it is clear that the energy industry is critical to Southwest Louisiana’s employment, budget and economic success.

Other figures of note:

  • The energy industry supports over a quarter of a billion dollars in annual wages for employees in Calcasieu Parish.
  • In Cameron Parish, the energy industry makes up 7 percent of all local property taxes.
  • The oil and natural gas industry generates more than 260,000 jobs in Louisiana – enough 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 Louisianians, 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.

“The unprecedented growth of Southwest Louisiana proves that the oil and natural gas industry is still a deep-rooted economic power in the region,” said Marc Ehrhardt, Grow Louisiana Coalition executive director. “With all of the cards stacked against the industry, such as an unpredictable tax system and the growing threat of misguided legal attacks, Southwest Louisiana continues to provide millions in local tax revenues and thousands of jobs in the region. We cannot take this for granted. For our state’s future and the continued success of Southwest Louisiana, we must fix our unpredictable tax system and stop reckless lawsuits that threaten Louisiana’s appeal to businesses looking to invest and grow.”

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 – five 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 parishes employed more than 1,000 workers 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 the 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.