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THE COURIER / DAILY COMET Thursday, September 26, 2019 B1
OIL & INDUSTRY State economist predicts job growth Area may get over 4,500 new jobs by 2021 By Julia Arenstam Staff Writer
The Houma-Thibodaux area is projected to be the secondfastest growing economy in the state over the next two years. Louisiana economist and LSU professor emeritus Loren Scott is projecting 1.8% employment growth in 2020 and 3.5% growth in 2021, or over 4,500 new jobs. Scott presented his annual Economic Outlook to local business and industry leaders at the Cypress Columns in Gray Wednesday. The event was sponsored by the South Louisiana Economic Council. The economist is making two “heroic assumptions” this year: an economic boom period is going to continue through 2019, 2020 and 2021; and a spurt is about to happen in the Gulf of
Mexico. The Houma-Thibodaux area lost 17.5% of its jobs since 2014, Scott said. Employment had just begun to grow in 2018, and while local employment numbers tracked by the Louisiana Workforce Commission suggest employment is going down again, Scott said it doesn’t track with what he’s hearing from employers. Companies such as Danos, Grand Isle Shipyard, Chett Morrison, Edison Chouest, Thoma Sea, Bollinger and Gulf Island are expanding employment, he said, projecting the commission will later make “major revisions” to its employment data. Port Fourchon is also continuing to expand, with two slip expansions in the works and a major airport road project now fully financed. Fabricators, on the other hand, aren’t expected to rebound in the same way because of how oil companies are starting to tie in
new wells to existing rigs, rather than build new ones. Scott also pointed to traffic data at the La. 1 toll location in Leeville. While the numbers flattened out for the 2018 and 2019 fiscal years, traffic has started to decrease according to 2019 monthly totals, he said. With new money coming in to finish the elevation of La. 1, Scott said the only way to get the last $150 million in needed federal money is to reelect President Donald Trump in 2020. In the oil and gas market, Scott predicts the price of oil will remain around $59 per barrel through 2021. He also expects production to continue increasing with a “spurt” on the horizon, keeping a lid on prices. Lease sales have increased 52% and bid amounts by 33%, Scott said. The economist is also predicting Chevron will finally crack the code of the Anchor field by the end of the year,
Louisiana economist and LSU professor emeritus Loren Scott presents his annual Economic Outlook at the Cypress Columns in Gray. [JULIA ARENSTAM/STAFF -- HOUMATODAY/ DAILYCOMET]
finding a way to drill in waters with 20,000 pounds of pressure per square inch, compared to the current 15,000-pound capacity. Natural gas, however, isn’t expected to fare as well. Scott predicts natural gas prices will continue to decline because the sheer amount of the resource far exceeds demand and ability to move it. There are not enough pipelines to
move the gas, and companies have begun just burning it on site, he said. Scott’s full Economic Outlook can is online at www. lsu.edu/business/eprg/ laeconomicoutlook. Staff Writer Julia Arenstam can be reached at 448-7636 or julia.arenstam@houmatoday.com. Follow her on Twitter at @JuliaArenstam.
Student interest in pursuing oilfield careers hasn't waned By Halle Parker Staff Writer
Workers handle pipe on BP’s Thunder Horse platform in the Gulf of Mexico about 160 miles southeast of Port Fourchon. [BP PHOTO]
International climate affecting local oil, gas industry By Julia Arenstam Staff Writer
The international trade climate could have a major effect on the oil and gas industry for the next six months, some economists say. David Dismukes, director of LSU’s Center for Energy Studies, said the recent attacks on Saudi Arabian oil production facilities has “put a murky wrench” in the center’s predictions for the oil industry. The attack on Sept. 17 took out 5.7 million barrels of crude oil per day, according to international media reports. Who is responsible for the attack continues to be hotly debate and could have long-term effects on the oil and gas industry. “It’s a tense period,” Dismukes said. “It will wind up increasing prices, but not for a good reason.” The international news comes just as Louisiana economists begin releasing their 2020 oil and gas market predictions. However the federal government reacts to the situation will have big impacts over the next 12 months, he said. The global uncertainty could drive up prices as producers start introducing risk-premiums, something that hasn’t been in play for a while. While there’s been some of the highest percentage increases in prices, prices overall have been relatively tame. The Brent Crude oil yearly average is just over $63 per barrel for 2019, averaging about $59 per barrel in August, according to the U.S. Energy Information Administration.
The EIA is forecasting Brent prices will average $60 per barrel in the fourth quarter of 2019 and rise to $62 per barrel in 2020. Over the past 12 months, however, the trends generally reflected a softening of energy demand and downward prices. Dismukes attributed a part of that to international trade uncertainties. If there is a resolution to these geo-political concerns, a rebound could kick in by the middle to end of next year, he said. Increased supplies from non-OPEC countries, including the U.S., have continued to play as a positive impact on the markets, Dismukes said. Production activity is slowing down, but there are also slowdowns in downstream activity, refining and petrochemical, Dismukes said. The liquefied natural gas market, which has been viewed as a quickly growing energy sector and presented new development opportunities in Terrebonne and Lafourche parishes, could also start to cool, he said. Yet, fossil fuels (coal, oil and gas) still account for the largest share of energy consumption in the U.S. About 80% of both domestic energy production and consumption stemmed from fossil fules, according to a new report from the EIA. Many of the country’s top oil and gas companies made similar observations to Terrebonne and Lafourche area businesses this year. Executives from BP, Chevron and Shell have
all addressed members of the South Central Industrial Association about the state of the industry. BP committed to a $1.3 billion expansion at its Atlantis Phase 3 development, announced the discovery of 1.4 billion barrels of oil and anticipated growing exports by 100,000 barrels of oil per day by 2025. Chevron plans to drill more exploratory wells this year and continue large-scale deepwater projects. Shell announced it’s building a new $20 million offshore support warehouse in east Houma and opening a new pipeline operations center on La. 311 this year, further linking the company to Terrebonne Parish. Standardization was also a key theme from each presentation as the three major production companies work to reduce the break-even price of oil. The U.S. rig count is at 886, according to the latest count by Baker Hughes. That’s down by almost 170 from the same time last year. Overall U.S. employment rates are strong, but as many state leaders have noted, those numbers have not trickled down to Louisiana — let alone the state’s oil and gas sector. The Houma-Thibodaux area has waited years for employment to rebound. Over the last decade or so, employment has been less sensitive to oil prices changes as companies wait to lay off employees. Dismukes predicts oil and gas employment will remain level, if not
decrease slightly. According to the latest jobs report by the Louisiana Workforce Commission, jobs directly involved in oil and gas exploration and production totaled 6,200 in July, up 100 for the month and year. The category is down 1,600, or 21%, since August 2014 but has regained 79% of the jobs it lost since the bust began. In the oilfield-service sector, the area has regained nearly 90% of the jobs it lost during the oil bust. Last year, economist Loren Scott predicted the area would see 700 new jobs in 2019 and 2,100 in 2020, coming out of a trough in 2018. Scott and others have also noted the increased traffic heading into Port Fourchon, a major oil and gas hub, as a sign of the industry rebounding. Innovation and technology has long been the worry of American workers, fearing they’ll get laid off and replaced by a machine. While it can reduce employment, technology can also increase wages for those still working in the industry, thereby increasing payroll that gets re-invested in the local economy, Dismukes say. “To say it’s a bad thing is not accurate,” he said. Innovation is happening in all sectors of the energy industry, not just oil and gas. Staff Writer Julia Arenstam can be reached at 448-7636 or julia.arenstam@houmatoday.com. Follow her on Twitter at @JuliaArenstam.
With the advancement of technology and consolidation of roles, local education programs geared toward jobs in the oil and gas industry continue to adapt to employers’ needs to prepare students for the workforce. Nicholls State University and Fletcher Technical Community College professors say enrollment in their programs have remained steady, aside from dipping slightly after the oil bust in 2014. Despite fewer offshore drilling jobs in the Gulf of Mexico, the professors say their graduates don’t have an issue finding employment with their degrees or certifications. Professor Milton Saidu, the head of Nicholls’ Department of Petroleum Engineering Technology & Safety Management, said even though there are less offshore drilling platforms to work on, people in the Baby Boomer generation are retiring and creating openings. “Ideally we would want to increase enrollment because we want to replace the workforce,” he said. “We have a general notion that there’s going to be a job market shortage.” As a whole, Saidu said his department has about 200 students, with graduating classes of about 40. Fletcher Dean of STEM Clint Coleman said the school’s two-year Integrated Production Technologies associate’s degree program saw over 50 students enter this fall as freshmen. He said Fletcher hadn’t seen that number in a couple years. “There was a bit of a downturn, but there was never a situation where we felt we had to close up shop,” he said. “There was interest, it just wasn’t at the level that we’re seeing now.” Over the past five years, both institutions have seen their programs change, whether that’s by adding minors or new pieces to the curriculum. At Nicholls, Saidu said the university added minors in safety and exploration production to help students market themselves and give them options to fall back on if they’re unable to find a job due to the market. If a student enters the Nicholls program with the See SCHOOL, B9