COVID-19 hurts Louisiana’s oil and gas industry, Scalise, Cassidy, & Kennedy try to help

LA Oil and Gas Jobs for coronavirus

NEW ORLEANS, La. (WVUE) - The toll the coronavirus is having on the health of Louisiana residents remains a big concern, and there is also anxiety over pain the virus and overseas actions are causing the state’s oil and gas industry. And members of the state’s congressional delegation say they are working to help.

"Clearly, everybody has been concerned about the high number of deaths in New Orleans, everybody from the president on down is aware and doing what they can to get us the resources, ventilators, PPEs,” said House Minority Whip Steve Scalise, a Republican from Louisiana.

Scalise and others are also concerned about the effects being felt by the oil and gas industry.

Gifford Briggs, President of the Louisiana Oil and Gas Association, said many jobs are on the line.

"What we're seeing in the oil and gas industry right now is a perfect storm,” said Briggs.

Oil prices have fallen, and Briggs explained why.

"We've got, on the supply side, Russia and Saudi Arabia have decided to wage war by putting more oil on the market to drive prices down and then on top of that our global demand decreases at an unheard of level,” he said.

Demand for oil is down because COVID-19 has taken the wind out of travel both domestically and globally and Sen. Bill Cassidy, R-Louisiana, said that has consequences for Louisiana’s oil and gas industry.

"Yes, right now oil producers and the people they employ are getting hammered. There’s a decreased demand because of the economy being shut down, but the Russians and the Saudi Arabians are going at each other in a price war for market share and we’re the byproduct, I’m thinking to myself we’re tolerating this?” Cassidy said.

Cassidy said he has turned to the president to address actions by Saudi Arabia and Russia.

"I've spoken to the president, I've sent him a letter with Sen. [John] Kennedy requesting several different measures of how do we make sure that we don't have collateral damage to America's energy security, as well as to the livelihood to many American families as the Saudis and Russians go at each other,” Cassidy said.

Cassidy thinks the U.S. should move to hit them where it hurts.

"Consider tariffs. If we have cheap oil coming from Saudi Arabia and they’re dumping below their production price, they’re dumping it on our society, the Russians seem to be doing this for sure,” Cassidy said.

Scalise said the U.S. has helped Saudi Arabia in important ways and deserves better treatment by the Middle East country.

"We’ve helped Saudi on a number of fronts, we’re also selling them some things, we sell them F-35s, we sell them missiles, but they’re trying to crush our energy market right now and we’ve got to stand up and push back,” Scalise said.

LOGA recently conducted a survey of oil and gas companies in the state and the responses suggested some companies anticipate cutting large numbers of workers.

"Looking at that survey, we saw that, you know, 7.5 percent of the workforce had been, of those that responded, had already been laid off and that it could be as high as anywhere from 65 to 70 percent over the next 120 days that would be laid off if there wasn’t significant action taken,” Briggs said.

He hopes the coronavirus-related CARES Act will protect some of those workers’ jobs.

"But the challenges that we're facing as an industry from a pricing scenario aren't going to go away when the stay-at-home order is lifted,” Briggs said.

Cassidy said he is also encouraging the Trump administration to take other action to help companies survive.

"We’re also working on a plan with Treasury that would be specific for these small and medium-size oil and gas companies to allow them to get bridge loans,” Cassidy said.

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