A new report says by 2020 Louisiana's oil and gas industry will recover about half the 17,000 jobs lost during the recent downturn, while energy manufacturing and refining sectors will remain strong.
Of course, this will be a function of prices, according to the 2017 Gulf Coast Energy Outlook by the LSU Center for Energy Studies.
The latest bust in the oil patch began after a boom faltered during the second half of 2014. After trading at more than $100 a barrel, crude prices eventually bottomed in early 2016 at less than $30 a barrel.
The number of rigs drilling nationally dropped from more than 1,600 to less than 350. Jobs bled from oil patch communities like Lafayette and Houma-Thibodaux.
The report says that moderate and stable oil and gas prices will provide an opportunity for continued drilling. Advances in drilling techniques and technology mean that crude prices ranging from $50 to $60 are enough to continue production in many of the shale basins.
U.S. benchmark price slipped below $43 a barrel on Tuesday. But even at that price, wells in the key shale basins remain profitable, the report says. The break-even prices range from a low of $29 in the Bakken in North Dakota to a high of $39 in the Permian in Texas.
Refining is also expected to remain strong with U.S. crude oil production continuing to be resilient.
Meanwhile, steady natural gas prices also provide the atmosphere necessary for continued petrochemical expansions.
Moderate and stable oil and gas prices will provide an opportunity for continued drilling and the atmosphere necessary for continued petrochemical expansions, the report says. Employment in oil and gas exploration and production and refining and petrochemical manufacturing is expected to increase steadily.
The jobs picture was mixed for Louisiana’s cities in April, with five metro areas posting ye…
Those shale formations also will help keep natural gas prices low, the report says. The "associated gas" produced along with oil from the shales will increasingly drive the growth of gas supplies.
Cheap natural gas has already facilitated $142 billion in announced major industrial projects in Louisiana, according to the report. More than $46 billion of those expansions or new facilities have been completed since 2011, with $96 billion remaining.
"While all these projects likely will not come to fruition, this represents a significant opportunity for the energy manufacturing sector in coming years," the report says.
The capital projects fall into three primary categories: liquefied natural gas export terminals; methanol/ammonia plants; and cracker/polymer projects.