BATON ROUGE, La. (KLFY) — A “point-in-time” survey by the Louisiana Oil and Gas Association (LOGA) shows the devastation being felt in the state’s oil production is moving quicker than previously projected.
The survey from LOGA’s members consists of 450 exploration and production and service companies across Louisiana.
The oil glut generated by the Saudis and Russians, and the lack of storage for recently excavated oil has caused the price of the commodity to plummet, most recently closing on West Texas Intermediate at just under $19 a barrel. LOGA said in a press release that independent producers need at least $37 a barrel to break even.
The survey showed the following results, according to LOGA:
- Members have been forced to reduce 23% of their Louisiana workforce already
- 77.5% of operators have already begun taking steps to shut-in production
- 97% are moderately or extremely concerned about the future of the industry
- 51.35% said bankruptcy likely
- 34% applied for EIDL funds, of those only 25% received the funds they expected
- Of those who received funds, 46.67% indicted they were not enough to help them stay in business
- Of those who received funds, 72% indicated they were not enough to avoid layoffs
“Our members have indicated they’ve already been forced to lay off 23% of their workforce and the large majority are now taking steps to shut-in production,” Louisiana Oil & Gas Association President Gifford Briggs said. “We feared these outcomes would take place by mid-to-late May, but the crushing weight of the crisis is taking hold much quicker than expected. Without a doubt, we need federal and state policymakers to take immediate action to help mitigate further losses from these extreme market conditions.”
According to the Louisiana Workforce Commission and the Department of Natural Resources, the oil and gas industry employs approximately 33,900 workers operating around 33,650 oil and gas wells around the state. LOGA says those tens of thousands of jobs bring Louisiana families $3.2 billion in wages.
LOGA is using the crisis to push for Louisiana to drastically cut its severance tax rate, which it said will help to ease the loss of revenue. Louisiana’s severance rate stands at 12.5%, while neighboring Texas has a rate of 4.6%. LOGA is also pushing for relief against government-led lawsuits regarding Louisiana’s vanishing coastlines.