Count Louisiana economist Loren Scott among those who think the plummeting oil prices that have gas well under $2 per gallon at the pump in much of the country are a product of Saudi Arabia’s decision to flood the market in response to the boom in shale oil production in the United States.

Scott, an emeritus professor at LSU, told the Jefferson Parish Chamber of Commerce on Tuesday that prices won’t stay this low forever but that he expects the Saudis to watch U.S. production carefully and adjust their spigots as necessary to keep investors in U.S. domestic drilling at bay.

He added that while low oil prices are bad for the state’s budget, they’re not as bad for the Louisiana economy as they were in the 1980s, when the state lost 148,000 jobs, or 9 percent of its workforce.

The rise of hydraulic fracturing, or fracking — a drilling method that uses fluids to crack underground rock formations to tap into vast reserves of oil and gas — has increased U.S. oil production by 70 percent since 2008, the highest rate of growth in oil and gas production of any country in the world during that period.

Before the boom, there were five states with significant oil and gas production, compared with 20 today. Scott pointed to North Dakota as a prime example, noting it has increased from about 10,000 barrels of oil produced in 2003 to 1.1 million barrels last year. It has passed Alaska as the No. 3 oil-producing state.

Scott noted that every shale “play” is different, geologically, and those differences affect profitability and the priorities of the drilling business.

The Tuscaloosa Marine Shale formation, part of which is in Louisiana, has a claylike consistency, making it more expensive to extract the oil. The breakeven cost in the Tuscaloosa play is about $92 per barrel compared with $50 in North Dakota’s Bakken play, which explains why there are just 30 fracking wells here and North Dakota is one of the hottest places to drill, Scott said.

For a while, all of the increased U.S. oil production bottlenecked in Oklahoma until a major pipeline could be reversed. Then it stopped again in the Gulf Coast because it has been illegal to export petroleum since the 1970s, Scott said.

But once the Department of Commerce ruled that an industry practice of removing volatile gases from oil made it a petroleum product, not petroleum, the flood of U.S. oil made it out into world markets.

With that 70 percent increase, the U.S. went from importing 66 percent of its oil to just 44 percent. Global players took notice, and not long afterward, the price of oil dropped precipitously.

Saudi Arabia is really the only country capable of countering the greater U.S. production by increasing its own production, Scott said, because it can go as low as $58 per barrel without affecting the amount of overall revenue it generates from oil sales.

“They’re attacking the shale play,” he said. “I think that’s what’s going on right now.”

Scott said he thinks prices are as low as they are going to go and that they will start to creep up as domestic drilling ramps up periodically to test the limits of Saudi Arabia’s patience.

In the meantime, he said, Louisiana’s economy is better equipped than some others to weather the decline because offshore drilling in the Gulf of Mexico considers a much longer timeline — 30 years and up — than the shale plays that have popped up around the country.

Another major difference between today and the 1980s is that the banking industry is being far more cautious and won’t be pulled into the crisis as it was before, Scott said.

However, there have been some negative repercussions for the state already: Sasol Ltd. postponed a decision on whether to build a planned $14 billion gas-to-liquids plant in southwest Louisiana, a project touted as the largest single investment in the state’s history.

The state budget, moreover, will continue to feel considerable pain because of declining revenue, he said.

State legislators will need to figure out how to plug a $1.6 billion hole for the next fiscal year, a hole that grew by nearly $400 million as oil prices fell by 60 percent.

Follow Chad Calder on Twitter, @Chad_Calder.