Grim outlook for for LA's oil & gas industry due to virus's impact
BATON ROUGE - The economic impact of the novel coronavirus and a global petroleum price war has brought the Louisiana oil and gas industry to its knees, and the price at the pump continues to drop.
Though the low gas prices may seem like a short term win for consumers, it will ultimately draw a negative affect on communities and homes across Louisiana.
As a way to provide a lifeline to those in the oil and gas industry, President Donald Trump wanted to top off funding for the Strategic Petroleum Reserves. This funding could bring relief to workers in Louisiana’s independent oil and gas industry.
On Wednesday, the proposal did not pass in the stimulus package. Gifford Briggs, president of the Louisiana Oil and Gas Association, says this could result in massive layoffs.
"Which means royalty owners are going to get less revenue, which means we're going to see less revenue available for the state. So, it's really a hard hit for Louisiana's oil industry across the board," Briggs said.
Because of the economic impact due to the novel coronavirus, global demand for oil is falling at record levels.
Right now, oil is hovering around $23 a barrel in Louisiana. Most producers in the state need oil to be at least 38 dollars a barrel to make a profit.
"There are thousands, tens of thousands of families that are going to be out of work, not because of the coronavirus but because these low prices are just not economical for oil and gas companies," Briggs said.
At this stage there is a lot of hope, but not much in the way of concrete answers to help shore up the industry.
Briggs says Louisiana’s Federal Delegation is working with the President to provide the independent oil and gas industry the support they need.
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