Banning Energy Development Would Devastate Louisiana

Mark Green
Posted October 16, 2020

We’ve discussed the significant national impacts of policies touted by some (see here and here) that would effectively stop new natural gas and oil leasing and development on federal lands and waters, potentially weakening U.S. security, killing jobs, raising household energy costs and more.

The national numbers could be big and alarming. Still, most Americans probably can relate more easily to potential impacts where they live, work and raise their families. This post zeroes in on New Mexico. Another state where the potential is large for job losses, reduced economic activity and decreased revenues – for education and other state and local priorities – is Louisiana.

A new analysis shows much is at stake in banning new federal leasing and development for Louisiana, which ranked third in the nation in 2019 natural gas production and ninth in oil production as of June 2020, according to the U.S. Energy Information Administration (EIA).

Louisiana's natural gas and oil sector services oil and gas production throughout the federal waters of the Gulf of Mexico. Federal oil production is about 15 times larger than Louisiana's onshore production, so a federal leasing ban’s impact on the industry’s presence in the state could be substantial:

• Natural gas and oil operations support about one out of every nine of the state’s jobs. The nearly 250,000 jobs supported by industry generated $14.5 billion in wages to in-state workers.
• The natural gas and oil industry $73 billion to state GDP from the production, processing, transportation, distribution and retailing of crude oil, natural gas, natural gas liquids and petroleum products. State income generated by this in-state activity represents approximately 26% of total state GDP.
• The natural gas and oil industry accounted for nearly $4.5 billion of state and local tax revenue in 2019, which is 14.6% of total state taxes, licenses and fees collected.

The chart below, from the OnLocation national analysis, shows projected jobs impacts from banning federal leasing and development on Louisiana, alongside other key states:

Much is on the line in Louisiana, where federal offshore development accounts for the vast majority of the state’s oil production. Banning new federal natural gas and oil leasing and development would be bad for Louisiana and bad for the U.S. Here’s Tyler Gray, Louisiana Mid-Continent Oil and Gas Association president:

“It is clear the energy industry is critical to Louisiana’s economy, creating jobs, boosting the economy and raising the quality of life for residents across the state. Our state’s economic future depends on a strong, robust oil and natural gas industry and the safe, responsible delivery of energy resources for all.”