Training the workforce: Nicholls creating new generation of labor
September 27, 2017
The LNG Renaissance: We’re leading the way in liquefied natural gas
September 27, 2017
Shifting priorities and shifting markets affecting the oil and gas industry – in its various incarnations – are what will determine how swiftly and well Terrebonne Parish and communities elsewhere in the Bayou Region come back from what has been a devastating economic downturn.
And so far, the experts say, there are no guarantees.
“Sustained increases in production are going to need sustained higher prices,” said Gregory Upton Jr., assistant professor for energy studies at Louisiana State University, whose fields of study include the effects of public policy on energy and the environment. “A lot of people are watching in terms of the resilience of the deep-water offshore environment. Only time is going to tell how resilient that production is.”
Because deep-water projects require so much in terms of planning, people-power and equipment, the huge oil companies engaged in such work are not going to be encouraged – or discouraged – by short term price fluctuations high or low. Continued prices at a level that justify such investment are what will turn the switch on or off, eventually.
“These are multi-year investments so you really need to watch and see where the price is concerned, does it stay where it is, and what is it going to be in the long-term adjustment,” Upton said.
With oil fluctuating at around $50 per barrel there are fears – certainly within the service sector which includes so many local businesses – that the figure is a “new normal.”
But experts are not quite sure about that.
“I am not sure I would characterize $50 per barrel as a ‘new normal’” said David Dismukes, executive director of the Center for Energy Studies at LSU. “But it does reflect current and anticipated market conditions for the foreseeable future, the next three years. This price level will place an increasing amount of pressure on U.S. exploration and production activity, particularly in higher-cost basins like the deep-water GOM. Service sector companies will have to adapt, like other sectors of the industry, to these changes through restructuring, increased efficiencies, and the use of technology to survive and maintain profitability.”
While some of that news may sound dire, changes in the energy industry indicate oil, gas and maritime potential that is capable of adapting.
Liquified natural gas, while low in price, has been responsible for a growing infrastructure in Louisiana. A natural gas terminal at Port Fourchon, proposed by global giant Energy World, would create more than a few hundred static jobs, according to what local business owners and civic leaders have been told.
The proposed facility, port officials say, represents an investment of upwards of $888 million in its first phase, making it the largest single initial investment in the history of both Port Fourchon and Lafourche Parish.
Port officials have been told that local shipyards stand to get contracts for vessel construction.
Among boosters of the project is Port President Perry Gisclair.
“Our community has been dealing with an economic downturn for a few years now, so we are excited for the opportunities that this project will provide by bringing hundreds of jobs during the construction phase, and dozens of good-paying permanent jobs once the facility is operational, which will help our young families and workers,” Gisclair said.
The LNG port is one sign that forecasts from the LSU experts are likely on target.
The Center for Energy Studies’ newest report, issued in June, says that significant opportunities for industrial expansion have been created, “and historic investments in mid-stream and down-stream sectors are on the horizon … The advent of shale has also fundamentally changed electricity markets, shifting towards lower emissions natural gas and creating opportunities for significant growth in renewables.”
The LSU data also shows 2017 as being the worst year this century for oil and gas jobs. But there is good news ahead. As indicated by the newest LSU report that figure, hovering at about 32,000 jobs from a peak of 52,000 in 2011, has nowhere to go but up. •
