Rig Count a Thermometer for Industry’s Economic Checkup
By Gifford Briggs, LOGA President
It has been a recording-breaking year for the U.S. Rig Count. Sadly, these are new records no one wants to set. Each week, producers are operating fewer and fewer oil and natural gas rigs, setting historic lows across the nation.
Each week the Louisiana Oil & Gas Association publishes the LOGA Drilling Report, which examines prices, rig counts in each part of the state, and permits. It’s essentially an economic health check-up for the state’s oil and gas industry, and the Pelican State’s industry is unwell.
A year ago, Louisiana was home to about 70 drilling rigs. Our natural gas giant, the Haynesville Shale, was home to 34, the highest concentration of any play in the state. Two more were in North Louisiana; we had activity and optimism in the Austin Chalk; there were three in South Louisiana, and there were one to five rigs in inland waters last summer. State offshore waters also had a few rigs running, and Louisiana’s federal waters boasted 24 rigs. Historically speaking, 70 rigs is a small amount for this state. However, compared to today’s essentially deserted oil patch, we would take last year’s numbers in a heartbeat.
That’s because today, only 31 rigs are running. 21 of those are in the Haynesville, and the other 10 are in federal waters. That’s it.
In Terrebonne and Lafourche, one out of every 13 jobs is directly attributable to oil and gas operations. Our industry boasts the single highest average weekly wage in the state at $2,343. The refining, chemicals, and pipeline sectors are responsible for the state’s other top three highest wages, and they are here in Louisiana thanks to our state’s oil and natural gas industry,
Those high paying jobs produced more than $339 million in direct wages for hard-working families in Houma, Thibodaux, and other communities across the coast. The oil and gas sector’s multiplier effect creates 3.7 more jobs in other parts of our economy for each single job in industry. Engineers, accountants, hairdressers, realtors, manufacturers, restaurateurs, construction workers, and so many other positions owe their existence in this state in great part to an oil and gas job a parish away.
On top of great jobs, the oil and gas industry is responsible for enormous investments in our communities all over the state. The energy industry contributes tens of millions in revenue for Terrebonne and Lafourche. For decades, the energy industry has proudly helped coastal communities build countless schools, hospitals, playgrounds, and roads. Finally, as COVID put a magnifying glass on essential services like fuel, first responders, healthcare, and education, we are again reminded of the crucial role oil and gas plays in our everyday lives.
While employment numbers lag months behind, rig counts give us a live update on our state’s oil and gas industry, and it has been more than halved in the price and demand crisis amidst COVID-19. While Louisiana’s economy has increasingly diversified, it is still founded on oil and gas. Demand is understandably down, but it will certainly return. And when it does, it’s important for Louisiana to be well positioned so investors return to Terrebonne, Lafourche, and the rest of our wonderful state. That’s why dealing with taxes, our litigation environment, our regulatory structure and other policy issues around our industry is so critical, even for the accountant, the hairdresser, and the construction worker.
Visit the LOGA Drilling Report on YouTube. •