Northwest Louisiana residents repeatedly have heard over the past year or so how fortunate this region is to have the Haynesville Shale and its financial fortunes act as somewhat of a buffer against the national recession.
Energy specialist Loren C. Scott echoed that Friday during a luncheon speech before 560 attendees of the second annual Haynesville Shale Expo inside the Shreveport Convention Center. The first to release a comprehensive evaluation of the oil and gas industry’s impact on the region, Scott put the shale into perspective, first through a detailed look at the national economic picture.
“This has been a stinker,” he said of the recession that started in January 2008. “But there’s every indication we are out of it now, and we’re starting to grow again.”
Historically, Scott said, when there’s a national recession, “you people get creamed. “ยป You always get hit harder than the national economy.”
But that wasn’t the case this time. Jobless totals are hovering at slightly less than 1 percent, compared to the more than 10 percent on the national average.
Natural gas drilling has kept the rig count up here, as opposed to the nation, and new companies and pipeline projects are pumping revenue into individuals’ pocketbooks and state and local government coffers.
For example, in 2008, when the shale was just a “baby,” more than $4.5 billion in new revenue was generated by seven of 17 oil and gas companies involved in the early shale exploration. Of that, about $3.1 billion was in lease payments. Tax receipts amounted to $153.3 million and more than 32,000 jobs were created.
This corner of the state has other good things going for it, Scott said, such as the strengthening of the mission at Barksdale Air Force Base, the expansion and introduction of new businesses associated with the oil and gas industry and an influx of state and federal highway dollars on major road projects.
But challenges for this area remain. Notable job losses were felt in Logansport and Springhill with the closure of the Georgia-Pacific plants, and Beaird Industries shut down and the site has yet to re-open under new ownership. Casino revenue also has dropped.
The future of General Motors’ Shreveport facility also looms as a concern. “That’s a pretty big hit for a community of this size to take on.”
And there could be national implications that could slow further development of the booming oil and gas business, he said. Stepping off into the political scene, Scott said anti-job growth coming out of the Obama administration threatens progress. And he also took a swipe at proposed national health care legislation.
“It’s all about economics. Go back to your economics.”
Just the introduction earlier this year of Obama’s $33 million tax on the extraction industry was enough to slow it down, Scott said. Natural gas prices, already at an all-time low price, stalled out and rig counts nosedived.
“The Haynesville Shale is what kept you going,” he said.