Energy industry makes huge impact on Louisiana’s economy

The value of Louisiana’s oil and gas industry is clear to the men and women of our state who proudly report to work each day at rigs, refineries, pipelines, shipyards and fabrication yards. As a result of their hard work fueling America, they earn salaries that are some of the highest in the state, allowing them to make a good living for their families and make purchases from other local businesses like grocery stores, restaurants and car dealerships. It’s a wave of economic impact that is very familiar to those of us who work or have family members who work in the industry.

Earlier this year, Louisiana Mid-Continent Oil and Gas Association (LMOGA) and the Grow Louisiana Coalition set out to quantify the economic impact of Louisiana’s energy sector on the state as a whole. Do communities beyond traditional energy centers like Baton Rouge, Lafayette, Houma and Lake Charles share in the benefits? According to results of a study released in July, the answer is a resounding, “Yes!”

Noted economist Dr. Loren Scott analyzed the crude oil, natural gas and petroleum refining industries in Louisiana and determined this sector continues to have a tremendous impact on the entire Louisiana economy.

Highlights of his findings include:

• The industry provided 287,000 jobs, generating $20.5 billion in household earnings in 2011.
• The industry supported nearly $74 billion in sales to Louisiana firms in 2011.
• A Louisiana professional employed in the oil and gas industry earns nearly two times the salary of the average Louisiana worker.
• Restaurants, stores and automobile dealers see more than $2 billion a year in spending from the businesses and individuals working in Louisiana’s oil and gas industry.
• In 2013, energy jobs and earnings existed in all 64 parishes and 17 parishes had more than 1,000 residents working in the industry.
• In 2011 alone, the industry yielded more than 11.6 percent of total state earnings. This number puts Louisiana ahead of the gross domestic products of 86 of 185 countries ranked by the World Bank in 2012.
• State taxes paid by Louisiana oil and gas industry companies increased significantly in recent years. The industry directly paid nearly $1.5 billion in state taxes and fees in fiscal year 2013, which represents 14.6 percent of total state taxes, licenses and fees collected.
• Local governments received $410 million in ad valorem taxes, representing more than $1 million per day into their coffers. This, combined with the $20.5 billion in household earnings, helped generate a more than $1.3 billion boost to local government treasuries.

The benefits enjoyed by Louisiana residents extend beyond economics to the welfare and sustainability of our local communities as well. Up to $500 million more in annual revenue is scheduled for coastal projects in the coming years through the industry-supported offshore revenue sharing program. In addition, the people of Louisiana’s oil and gas companies have planted more than 1 million trees in coastal areas, created miles of artificial reefs for oyster production and worked with scientists to develop cutting-edge technology to protect our environment and preserve our coast.

From the exploration, production and service companies that find and produce needed natural resources to the pipeline companies that transport the products to the refineries that transform raw materials into fuel, Louisiana’s energy industry has been a responsible community partner for more than a century. The industry has also created more jobs than any other sector of Louisiana’s economy. Clearly, Louisiana’s oil and gas industry has raised the standard of living and quality of life across our state.

As Dr. Scott explains, “The energy industry, and its accompanying multiplier effects, has been a powerful engine for economic growth in Louisiana.” LMOGA could not agree more, and our members are committed to continuing to reinvest in Louisiana and Louisiana workers so we all may prosper for many years to come in our great state.