Forecast could be grim locally

The talk that LSU professor emeritus Loren Scott will deliver tomorrow at the Cypress Columns in Gray on his “Louisiana Economic Outlook for 2010-2011” report will possibly contain some negative predictions for the Houma area, and the bad news has to do with taxes.

The much-anticipated annual report asserts that the proposal by President Barack Obama’s administration to eliminate $33 billion in tax credits and tax advantages for oil and gas producers in the U.S. will weigh down the extraction industry in the Houma area, said LSU economics professor James Richardson, who co-authored the paper with Scott and fellow LSU economics professor M. Dek Terrell.

“In a broader sense, the change in the energy environment is what’s pushing (the administration),” said Richardson, director of LSU’s Public Administration Institute. “Oil and gas are not quite on the same level as the energy alternatives.”

The Obama administration is proposing eliminating allowances for depletion and intangible drilling costs, which include activities such as surveying, clearing ground and draining that have no salvage value.

Legislation limiting carbon emissions is also a factor affecting the oil and gas extraction industry, Richardson said.

The report states the Houma-Thibodaux metropolitan area will add 900 jobs in 2010 and 800 jobs in 2011. Those increases will occur even if the Obama administration’s tax proposals are passed into law, Richardson said.

“The general (condition) of the national and state economy will weigh on the Houma-Thibodaux economy,” he said.

Locally, the report factors in huge job gains at Edison Chouest’s LaShip shipyard under construction at the Port of Terrebonne. Richardson said Houma oilrig platform maker Gulf Island Fabrication, the only publicly-traded corporation based in Terrebonne Parish, is expected to add 200 jobs in 2010 and 150 in 2011.

J. Ray McDermott in St. Mary Parish will add 600 jobs in 2011, according to the economic report.