Opinion: Declining oil prices taking heavy job toll
Published 6:49 am Thursday, December 24, 2015
The good news about lower gasoline prices is encouraging for those who fill up their tanks. However, job losses in oil and gas areas of the state are mounting. Oil was selling below $35 a barrel last week, a six-year low and down from a high of nearly $110 per barrel.
Job numbers from the federal government show Louisiana’s oil and gas sectors lost more than 10,000 jobs, a drop of 19 percent in the 12 months ending in November, according to a report in The Advocate. It is the lowest point since the U.S. Bureau of Labor Statistics started using its current tracking system in 1990.
Parishes that depend on oil and gas revenues to finance their budgets are seeing major tax losses.
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LaFourche Parish saw its sales tax revenue fall by nearly 14 percent in the first 10 months of the year. October sales taxes in Terrebonne Parish were down more than 20 percent when compared to a year ago. St. Mary Parish had sales tax losses of 33 percent last month when compared to 2014.
Louisiana state government is also a loser of tax revenues, but The Advocate said its losses aren’t as damaging as those being experienced in Alaska, North Dakota, Oklahoma, Texas and West Virginia. Louisiana loses almost $12 million in revenue with every dollar drop in the price of oil.
The newspaper said most state leaders and regional economists aren’t ready to sound the alarm. Diversification and expansion of industries is the reason for hope amidst the bad employment news.
Curt Eysink, executive director of the Louisiana Workforce Commission, said, “Although we have job losses related to oil prices, we still have thousands of jobs in other sectors.”
The latest example is the announcement by Axiall Corp. and Lotte Chemical Co. that they will spend $3 billion on chemical manufacturing projects in Lake Charles. An abundance of cheap energy is the major reason for multi-billion-dollar investments in the state that are either under way or planned for the future.
Some members of Congress are also trying to help. They voted to end the four-decade-old embargo on exporting crude oil. Whether it helps remains to be seen, but U.S. House Majority Whip Steve Scalise, R-Jefferson, is confident.
Scalise said ending the ban will reverse some job losses as companies work to build new export infrastructure like barges, tankers and oil storage facilities.
“You’re seeing people being laid off left and right, and they’re saying that there’s another wave of layoffs coming by February,” Scalise said. “You’ll also see more pipelines being built and a lot more jobs that will come with that and then, ultimately, getting thousands of workers that will be employed to create energy for the rest of the world.”
Some economists don’t agree with Scalise, but something had to be tried in order to give relief to areas of the state hit hard by job losses. Southwest Louisiana appears to have dodged this latest bullet, and we can only hope the good news continues.