LSU: Louisiana could gain 1,300 oil and gas jobs by 2025 | Business | theadvocate.com - The Advocate

LSU: Louisiana could gain 1,300 oil and gas jobs by 2025 | Business | theadvocate.com

Amid the potential for a decade of national growth in oil and gas production, Louisiana could gain 1,000 upstream oil and gas jobs through next year, according to the 2024 Gulf Coast Energy Outlook released Wednesday by the LSU Center for Energy Studies.

The state should add another 300 upstream jobs in 2025 before leveling off by 2026, the LSU report says.

Louisiana’s refining and chemical manufacturing sector employment should grow by 1% to 2% annually over the next three years, which would push it past its pre-COVID levels of employment, the report says. Those figures mirror the expected growth rate for the same sector in Texas, which should add about 8,000 upstream jobs in 2024 and another 2,500 in 2025.

The report, an annual tradition from the LSU energy think tank, projects the outlook for the Gulf Coast and U.S. energy industries over a three-year horizon.

This year’s version assumes the national and global economies won’t dip into a recession because employment and wage growth have been strong over the last year, despite lingering worries from an inflation boom in 2022.

“It doesn’t mean (a recession) can’t come, but it certainly hasn’t to date,” Greg Upton, the center’s interim executive director, said Wednesday during a presentation about the 2023 report.

As a result of the Russia-Ukraine war, which upended the global energy market in 2022, the worldwide economy will increasingly rely on U.S. energy exports. This should help sustain a decade of increased oil and gas production here, even though fossil fuel prices are falling, the LSU report says. That should spur further Gulf Coast energy projects, which have proliferated in Louisiana in recent years amid global efforts to reduce industrial carbon dioxide emissions.

Between 2011 and 2022, industry sunk $212 billion in refining, chemical and energy export projects in the Gulf Coast, roughly half of which was in Louisiana, said David Dismukes, an LSU professor emeritus and former leader of the energy center.

That trend should continue, with more than half of another $170.5 billion in announced Gulf Coast industrial projects slated for Louisiana.

Fossil fuel production is robust along the Gulf Coast, where oil output is 8.4% higher than its pre-pandemic peak and natural gas production is 17% above its pre-COVID heights, Upton said. Meanwhile, U.S. crude oil exports have grown to around 4 million barrels per day, up from about 3 million as recently as 2021, according to U.S. Energy Information Administration data.

Production in the Haynesville Shale, a natural gas play in northwest Louisiana and east Texas, has leapt to 17 billion cubic feet per day, up from around 11 billion in 2021, Upton said.

Liquefied natural gas exports have leveled off over the last year after an export bonanza in 2022. However, LNG demand could increase, the report says, if Europe’s winter is cold, if global economic growth unexpectedly rises, or if any new geopolitical tensions arise, as has been the case the last two years with the Russia-Ukraine and Israel-Hamas wars.

The outlook for oil refineries — despite closures a few years ago, including Shell and Phillips 66 in Louisiana — is positive for now, the report says. Factors supporting oil refineries include continued demand for refined petroleum amid geopolitical uncertainty and an increase in refinery profitability.

However, uncertainty looms. Permitting delays could lead to a bottleneck in projects, Upton said. In addition, the ongoing drama with offshore leasing could limit the long-term outlook for oil and gas supplies and upstream employment. In the next three years, though, the effects of the leasing uncertainty on employment will be minimal.

Decarbonization will also continue to impact the energy sector. The share of renewable energy in the U.S. should increase, and combustion should become more efficient as older power plants are retired and new ones come online. Energy transition projects should also account for about a third of regional energy manufacturing investments.

However, the long-term effects of decarbonization will depend on the costs to achieve those emissions reductions, and whether the market is willing to pay a premium for lower-carbon products, the LSU report says. Natural gas is also likely to be the primary fuel source for power plants for the foreseeable future.

Upton said industrial companies can’t spend too much on decarbonization efforts without killing their bottom line. However, they also can’t ignore emissions reductions because other firms around the world could create cost-effective, lower-carbon products.

“The big key that I see is the balancing act of these two aspects,” Upton said.