Slumping gas prices costing jobs in Louisiana

While some are celebrating lower gas prices at the pump, the lowest since Sept. 2014, others are worried about the toll $1.89 gas will continue to have on oil and gas jobs and the economy.
Don Briggs, president of the Louisiana Oil and Gas Association said, “Gas prices, for the most part, are a direct result of what the crude oil prices are. Oil prices have gone as low as $40 per barrel. They were $45 yesterday. When oil prices are in a slump, that is passed down to the consumer.”
Briggs said, “It’s a double edged sword. If we have to wait another year and a half for gas prices to go back up, the state and local economies could be disrupted. For every dollar dropped in the average price of a barrel of oil, the state loses $12.5 million dollars in the budget. The state would lose $526 million from the budget if oil stayed at the same price for the next 12 months.”
In addition to the money already lost, Briggs estimates that about 14,000 oil and gas industry jobs were lost in the state since November 2014 as the U.S. rig count declined from 1,800 rigs in Nov. 2014 to 842 Wednesday.
“Our production is declining and will continue to decline,” Briggs said.
According to Briggs, the lower gas prices are due to an excess of oil in the global marketplace, and the lower natural gas prices — in the $2 range — will last a while, possibly 18 months, if there is no disruption of oil production or a crisis in the Middle East, especially in Syria.
The excess oil in the global marketplace is coming from countries that are members of the Organization of the Petroleum Exporting Countries, Briggs said.
“Normally, OPEC member countries will reduce production to keep oil prices higher,” he said.
“In November 2014, the OPEC members decided not to reduce their production and increased it instead.”
“Oil production in the U.S. has grown, and the U.S. has moved more oil into the marketplace In 2008, the U.S. produced 5 million barrels of oil a day. In November of 2014, we produced 9.3 million barrels per day. OPEC was concerned about their market share in the world. Rather than reduce their production, they increased it. They want to cripple, put the hurt to, the oil shale players in the U.S. It (increasing oil production) is a direct, frontal attack against the U.S. oil shale players.”
“It’s the U.S. versus Saudi Arabia,” Briggs added.
Briggs expects that leaders from OPEC member countries will meet soon to discuss the price of oil.
“OPEC member countries are very dependent on exporting oil,” Briggs said. “Low gas prices are crippling these countries. Most need oil to be $100 a barrel to meet the social needs in their countries. How long they will take the beating from the low gas prices remains to be seen. Low oil prices could led to civil unrest in some of the countries.”
“Unless OPEC meets or production declines so much in the U.S., gas prices will stay the same.”
On Tuesday afternoon, Sydnie Frey, of Eunice, was filling up her mid-size car for with regular unleaded for $1.89 a gallon at Eunice Truck Stop and Casino.
“It costs me about $25 to fill up now,” Frey said. “I am traveling more and saving some money but I am worried the price of gas will go back up.”
With lower gas prices, Charles Smith of New Roads is now able to use his pickup truck instead of his car when traveling.
“It’s about $53 to fill up my truck now compared to $80 when gas prices were higher,” Smith said. “I’m not really worried about prices going back up. If we could handle it when the gas prices were $3.50 a gallon, we can handle it if it’s $2 or $3 a gallon.”
Across U.S. 190 at Murphy USA, gas was also $1.89 a gallon for regular unleaded and the Valero station at the corner of Bobcat Drive and Laurel Avenue was also selling regular unleaded for $1.89 a gallon.
A few miles east, a gallon of regular unleaded was $1.99 at the Hit and Run Shell gas station, also on Laurel Avenue.
“It’s costing me about $45 to fill up my van now,” said Connie Rachal, of Eunice. “I am worried about gas prices going back up, and I am saving the extra money.”
Farther east along Laurel Avenue, a gallon of regular unleaded was $1.98 per galleon at the Chevron at the corner of Laurel Avenue and 8th Street and $1.89 at Raceway and $1.99 at Tobacco Plus, both at the corner of La. 13 and Laurel Avenue. On the eastern outskirts of Eunice, a gallon of regular unleaded was $1.99 at Cash Magic, and on Aymond Street, a gallon of regular unleaded was $1.98 per gallon.
Robert Credeur, a customer at the Aymond Street Chevron station, has worked in the oil and gas industry for 30 years, and he also shared his opinion on the lower gas prices.
“The gas prices are bad,” Credeur, of Opelousas, said. “People are losing their jobs. If you don’t have a job, how are you even going to get gas? I wouldn’t mind if it was $4.50 a gallon. It’s not like it was in the ‘70s and ‘80s. Gas prices were low, but the economy stayed up. With gas prices down, nobody is doing a lot. We’ve got to have gas.”
Credeur added, “If gas prices came back up, it would be a lot better for everyone. If gas prices stayed where they are, and the price of everything else came down, then it would be good, but nobody else is going down on their prices. They are just waiting on the price of gas to go back up so they can go even higher with their prices.”