A new round of large-scale industrial projects could bring roughly 7,000 new jobs to the Lake Charles metro area over the next two years, economist Loren Scott said Tuesday.
Scott discussed his annual "Louisiana Economic Outlook" report at the SEED Center. Despite being in between major industrial projects this year, the Lake Charles area is expected to become, once again, the state's fastest growing metro area. Employment growth is anticipated at 2.5 percent in 2020 and 3.1 percent in 2021.
"Usually, the U.S. growth rate for employment is about 1.3 (percent)," Scott said. "You're talking about double, triple those growth rates."
Scott attributes this projected growth to expected financial investment decisions (FID) by Driftwood LNG and Lake Charles LNG, along with Venture Global LNG announcing FID in August.
The completion of major projects, like Lotte Chemical, put the Lake Charles area in a lull this year, Scott said. Roughly 6,600 construction jobs were lost, he said.
Of the area's nearly $94 billion in announced industrial megaprojects, $28.1 billion of them are either under construction or completed. That leaves $61.6 billion in announced projects.
Scott said Louisiana is expected to add 53,000 jobs over the next two years. He said it's a good sign after nearly four years of no growth caused by falling oil prices. However, metro areas north of Interstate 10 are predicted to experience little growth.
"They don't have a Calcasieu Ship Channel, access to the Gulf of Mexico (or) pipelines bringing natural gas through there," Scott said.
Chennault International Airport Authority officials said they plan to start developing the property where Mallard Cove Golf Course currently sits in mid-2020, Scott said. Seven developers and five tenants are interested in the area, he said.
"This is going to be a nice little addition to your area going forward," Scott said.
Scott said oil prices should remain at roughly $59 per barrel in 2020 and 2021. Because it's difficult to forecast, the range of oil prices is anywhere from $30 to $90 per barrel.
Oil rigs in the Gulf of Mexico are expected to recover modestly, but significantly, Scott said. He said two prominent research firms, Rystad Energy and Wood Mackenzie, are looking at final investment decisions.
Scott said to keep an eye on Chevron's Anchor project, which could end up producing oil in a higher water pressure.
"Once they do an FID on this field, there will be a whole bunch of other oil companies out there who have similar kind of reserves that they would like to harvest," he said.
The report indicates natural gas prices will fall slightly over the next two years. The main reason, he said, is there is "an ocean of natural gas" in the U.S.
Scott said new fracking techniques to recover oil produces natural gas.
"They have so much natural gas, they're just burning this stuff up," he said. "In some cases, they are paying people to take it. We're just awash in this stuff."
Scott said the U.S. will have a major competitive advantage in securing chemical plants because its natural gas prices are much lower than in Europe and Asia.