What a difference two years has made in the energy business.
The biennial exhibits and receptions of the Louisiana Gulf Coast Oil Exhibition continued this year and, in fact, saw an increase in the number of exhibitors at Lafayette’s Cajundome.
In its 60th year, the exhibition’s companies look upon an oil and gas business that was drastically different two years ago. In 2014, the price of oil plummeted from highs above $100 a barrel to half of that or less.
For all that Gov. Bobby Jindal’s office boasts about his accomplishments in economic development, luck for him was at least as important as skill. Earlier in his tenure, jobs in energy production soared, and LAGCOE’s exhibiting companies serving the oil patch blossomed.
At the same time, the fracking processes boomed, producing cheaper natural gas. While gas prices are low, so much that fracking isn’t as lucrative as it used to be, the petrochemical processing industry has flourished in Louisiana.
The past year, the downsides of oil production have been evident, as Louisiana has seen significant cutbacks in employment in energy companies and particularly oilfield services, a loss of good jobs that have helped to bolster the state’s economy. Cutbacks have come in both Lafayette and New Orleans metropolitan areas. Even international energy giants serving the Gulf of Mexico have cut back; the U.S. government has taken a financial hit from declining bidding on offshore drilling tracts.
“This past week, zero (drilling) permits where filed in Louisiana,” commented Don Briggs of the Louisiana Oil and Gas Association. “Needless to say, this downturn has been far worse than even the crash of the mid-eighties.”
All that said, the nation still needs energy. Further, as Jindal and others have pushed, Louisiana continues to welcome energy production and petrochemical manufacturing, industrial complexes that other states might not be as eager to have in the neighborhood. Only recently, Jindal and company executives have announced significant long-term investments in the Mississippi River petrochemical corridor.
Certainly, with the fall in oil prices, the extraction industry has been hurt — but those companies have seen busts before. “We’re waiting on that next boom,” Charlie Moncla Jr. said as he presided as LAGCOE Looey over the exhibition.
Part of that faith was demonstrated as LAGCOE hosted a “pitch challenge” for innovators looking for investors in new products and services for the industry. “It’s important to remember that our culture was built with a dynamic entrepreneurial spirit,” Jason El Koubi, CEO and president of regional economic development agency One Acadiana, said Tuesday.
Not only is the spirit of wildcatting part of the DNA of the industry, technology has transformed oil and gas exploration and development over the past decade — as Briggs said, since the dark days of the 1980s.
We look forward to happier days for the industry, but it’s too early to say when oil prices are going to rebound substantially.