Nicholls’ No. 2 steps down
July 22, 2014Ham stations to provide public service during storms
July 22, 2014
Figures are his ink, and Loren Scott again illustrated to local business leaders that the energy industry is Louisiana’s bridge to economic prosperity.
Without Fourchon and Haynesville, without three of the largest oil refineries in the world and without enough embedded pipelines to wrap the globe four and a half times, well, Louisiana would be on the same economic tier as its oft-lampooned neighbor.
“If you want a good idea of what Louisiana would look like without this industry, all you have to do is look one state east,” said Scott, former chair of economics at Louisiana State University and current professor emeritus. “Mississippi is No. 50 in the United States in per capita income. We are No. 31 in the United States in per capital income. One of the biggest differences between us is the fact we have this oil and gas here, and it creates an exploration industry, a pipeline industry, a refining industry … We’re really, really fortunate from that standpoint.”
At the South Central Industrial Association’s annual general membership meeting last week, Scott presented findings of his study, “The Energy Sector: Still a Giant Economic Engine for the Louisiana Economy,” which was co-sponsored by the Louisiana Mid-Continent Oil and Gas Association and the Grow Louisiana Coalition.
Scott’s economic consulting firm boasts clients like BellSouth, Capital One Financial, Entergy, ExxonMobil, J.P. Morgan Chase and others. He is a member of the National Business Economic Issues Council and the Economic Advisory Board of the U.S. Council on Competitiveness.
Included in his Louisiana energy production study were data detailing how many direct jobs per parish are associated with oil and gas extraction, support activities, petroleum refining and pipeline industries, and the average annual wages those jobs command.
Statewide, these roughly 65,000 “energy” jobs command a median salary of $89,504; 15 of the 55 parishes for which the figures are available are above that level, according to data in Scott’s report.
Terrebonne Parish, which with 6,070 ranks second in energy jobs behind only Lafayette (16,179), is one of those 15 states with average annual wages of $91,946. In total, energy-related wages there exceeded $558 million in 2013, according to projections extrapolated from third-quarter data of last year.
Lafourche has 1,511 energy jobs with average salaries of $86,442.06, as total wages approached $131 million last year.
Orleans Parish averages 2,583 energy jobs with average salaries totaling $139,938, the highest wage-per-job total of the 55 parishes. Catahoula Parish, with only 57 energy jobs, ranks last in average related salaries at $37,249.26. In Lafayette, 16,179 workers collectively earned $1.4 billion.
These jobs and salaries, of course, stem from the enormity of the state’s mining operations, an industry so large that the facts surrounding it, all according to Scott, seem outlandish at times.
When adding production from the federal deep-water Gulf to its tally, Louisiana was responsible for roughly 20 percent of gross crude-oil production and more than 12 percent of natural gas extracted from the United States in 2013, Scott says, which ranks the state No. 2 in producing both sources throughout the country.
“The reason I include the federal offshore is because virtually 90 percent-plus of the activity in the Gulf of Mexico is serviced out of this particular area here,” Scott said, referencing Port Fourchon in Lafourche Parish.
Overall, direct energy employment is equivalent to the population of Acadia Parish, the 18th most populated parish in the state, or the Alexandria metropolitan statistical area.
The $22.8 billion in income created by the state’s oil and gas extraction and support activities sectors exceeds all other manufacturing sectors in Louisiana except for chemicals. In 2011, Scott says, the “oil and gas industry and the refining sectors combined created a remarkable $40.8 billion of income in Louisiana.”
Economists love to talk about the “multiplier effect” and Scott is no different. Directly and indirectly, the extraction industry was responsible for 181,000 jobs in Louisiana in 2011, he said, at average wages of $78,865 per year. Refinery operations, alone, were credited for 101,000 jobs directly and indirectly in 2011, and the pipeline industry was responsible for 5,600.
That’s about 287,000 jobs created by these three industries, either directly or indirectly, according to Scott.
In 2012-13, Louisiana’s treasury directly collected $1.5 billion in taxes, fees and royalties from extraction, refining and pipeline industries. That comprised 14.6 percent of all state taxes collected.
The industry has also contributed mightily to local governments, with extraction, refining and pipeline industries combining to pay $409.7 million in ad valorem taxes to local governments last year, a 37.5 percent increase from 2009.
The industries paid more $16.1 million to Lafourche and $11.5 million to Terrebonne in property taxes, allotments that accounted for 14.3 percent and 13.7 percent of ad valorem collected in the respective parishes.
To download the report, visit growlouisianacoalition.com.
