Claims proposed jobs program would levee $41 billion tax on the industry

NEW ORLEANS, La. – A new study details how dependent Louisiana is on the oil and gas industry, and warns that national politics targeting the industry could disrupt one of the state’s key economic drivers.

Dr. Loren Scott, a former LSU economics professor, says that every parish in Louisiana has workers who are employed in oil and gas extraction, pipeline and refining divisions of the industry, and that national policies could lead the industry to move elsewhere.

“This industry is very much under attack by this administration,” he said.

He added that the Obama administration’s proposed American Jobs Act would have meant a “$41 billion tax on the industry.”

Dr. Robert Bradley, founder and CEO of the Institute for Energy Research, agrees with Scott.

“Under Obama, there is an anti-oil and gas mentality that has taken away the trust factor that prudent regulation is what is being proposed and implemented.”

Including the Outer Continental Shelf, Louisiana is a top producer of oil in the U.S. and is second behind Texas in refining.

Louisiana is also the third largest producer of natural gas, behind Texas and Wyoming.

The oil and gas industry in Louisiana generated more than $16.1 billion in household earnings, supported $77.3 billion in sales by Louisiana firms and provided 310,217 jobs in 2009.

“It is a very critical industry to our state,” Scott said Monday at the Press Club of Baton Rouge, where he released results of his study, commissioned by Louisiana Mid-Continent Oil and Gas Association.

The study used figures compiled prior to the Mancondo well disaster in the Gulf of Mexico that led to the Obama administration’s drilling moratorium.

Although the moratorium was lifted in October 2010, only 20 deepwater rigs are operating in the Gulf, representing roughly 60 percent of the number of rigs working at the time of the Mancondo incident.

According to Scott, Louisiana has diversified itself since the 1980s when 50 percent of the state budget depended on the oil and gas industry, so the moratorium and subsequent aftermath did not cripple state finances.

Oil and gas revenues now make up about 15 percent of the state’s budget, and, in 2010, the extraction, refining and pipeline industries contributed nearly $1.4 billion in state taxes and fees.

Robert Ross is a policy analyst with the Pelican Institute for Public Policy. He can be contacted at, and you can follow him on twitter.