Cheap Gas Hurting La.

American Press, Lake Charles, Louisiana, on cheap gas:

The dramatic drop in the price of gasoline over the past six months is a mixed blessing for Louisiana.

Consumers are enjoying the lowest gasoline prices at the pump in years, around $1.80 a gallon for regular at present, locally.

State government, however, is receiving a jolt from the lower price of a barrel of oil, which will result in a drop in revenue if it persists all year long.

The oil and gas industry is a big segment of the Louisiana economy and those who work in the industry are being hurt by the precipitous drop in oil.

For the overall U.S. economy, it means more disposable income for families with the decline of every penny of gasoline pumping $1 billion back to consumers. It also benefits energy-dependent transportation sectors, such as airlines and truck-lines. That, too, can benefit consumers.

But in the long run there are downsides. It could mean fewer wells being drilled, which means fewer jobs for workers in the oil and gas industry.

It is hard to be enthusiastic about cheap gas when some of our fellow Louisianians are suffering layoffs.

According to a survey by S&P Ratings, if the oil price decline continues through 2015, the economies of the energy producing states, including Louisiana, will face difficulties.

Louisiana’s assumed price of a barrel of oil at the time of adoption of its 2014 budget was $97, and that share of the state budget amounts to 13 percent. Louisiana has done a much better job than some other states in diversifying its economy and reducing its dependence.

Loss of energy jobs could have a much greater economic impact than loss of other jobs. The New York Times reported that one energy job can have the purchasing power of three non-energy jobs.

So, consumers are now enjoying an unexpected windfall. But the lingering question is will that consumer windfall make up for a depression in the oil and gas industry?

Let us hope that a reasonable balance can be reached to keep the overall economy stable and prosperous.