Oil and Gas are a ‘Major Engine’ for Growth in Louisiana
New study finds Louisiana leads the country in crude oil production, generating outsized economic benefits for the state.
We’ve pointed out many times before how responsible oil and gas production is a significant source of new job creation and new public revenues. Folks in Louisiana — a major oil and gas producing state — recognize this as well as anyone, but a new study detailing the benefits of energy development may even surprise people down in the bayou.
That study, authored by LSU Professor Emeritus Loren Scott and released by the Louisiana Mid-Continent Oil and Gas Association (LMOGA), reached the following impressive conclusions about oil and gas in Louisiana:
- The extraction, refining, and pipeline sectors support more than 310,000 jobs in the state.
- Generated $1.4 billion in revenue for the state in taxes and fees in fiscal year 2010.
- Added $1 billion to local government revenues through direct taxes and indirect economic activity.
- Earnings and jobs in the energy sector can be found in all of Louisiana’s 64 parishes. In 15 of those parishes there were at least 1,000 people employed by the oil and gas industry.
- Generated $16 billion in household earnings for Louisiana families.
- The total value added to Louisiana’s economy from the oil and gas industry is nearly $55 billion in total income.
One additional important finding of the study is the multiplier of oil and gas employment; that is, the number of spinoff jobs created from each job created in the industry. In Louisiana, that multiplier is five. Put differently, each job created in the industry creates on average four additional jobs in support industries, including not only in oil and gas service firms but also in local restaurants, hotels, and other small businesses.
With well-established production both offshore in the Gulf of Mexico and in the northern part of the state in the Haynesville Shale (which earlier this year overtook the Barnett in Texas as the nation’s largest producing shale gas field), it’s clear that Louisiana has been blessed with massive oil and gas deposits. And with new shale plays constantly coming into focus — including the Tuscaloosa Marine Shale, which could hold seven billion barrels of oil — Louisiana is a state that appears well positioned for sustained future economic growth, thanks in large part to the responsible development of oil and gas resources.