Oil prices begin to affect some jobs in Louisiana

Oil prices begin to affect some jobs in Louisiana

NEW ORLEANS, LA (WVUE) - The plummeting price of a barrel of oil is starting to affect the livelihoods of people in Louisiana.

"There have been a few hundred or so that have been laid off,” said Don Briggs, president of the Louisiana Oil and Gas Association, or LOGA.

He said in some areas, a slowdown is already underway.

"We've had a few rigs drop,” said Briggs.

Still, deepwater drilling activities in the Gulf of Mexico are more insulated.

"Because those are long, multi-million dollar projects and 10-year long-term projects - and they won't necessarily be impacted by low prices - but we'll see the South Louisiana land rig count and maybe a few rigs in north Louisiana and some of the coastal rigs slowdown some,” said Briggs.

Along the Harvey Canal in Jefferson Parish, businesses tied to the oil and gas industry are many.

"Companies that produce the infrastructure, our welding and fabrication of rigs and components, some drilling pipe,” said Chris Breaux, president of the Harvey Canal Industrial Association.

Breaux said the corridor is responsible for some 7,000 jobs.

"It's all linked, because if it's not direct manufacturing those rigs for these oil companies, then there are service companies that provide a service to them, so the trickle-down effect would be an effect,” said Breaux.

And he said in terms of the low oil prices, businesses along the Harvey Canal are not suffering negative effects yet.

"The service industry in our canal corridor has already been negatively affected by the oil spill, so we've lost a lot of our volume and production because of the oil spill that we really haven't gained backed to this point,” said Breaux.

Still, Briggs believes industry-wide jitters are mounting given the state of oil prices.

"This is a direct attack by the Saudis to cripple the domestic oil shale play so that can't help but make you nervous and they're doing a pretty good job of it and the prices have gone down all the way to $45 a barrel,” said Briggs.

"If they suppress some of the fracking, well, that will have a positive effect on offshore drilling because domestic production would have to move more offshore, rather than onshore,” said Breaux.

Briggs believes in an effort to avoid major layoffs if the low oil prices continue, some in the state's oil industry support business will give rig operators discounts on equipment to keep drilling going.

Meanwhile, Breaux said he sees other manufacturing opportunities for the Harvey Canal Corridor and New Orleans as energy costs are low.

"Many of the major manufacturing plants have left the United States because of rising labor costs, you know, 15, 20 years ago, we see some of those companies exploring a return back to the U.S., because of low energy costs and low transportation costs to distribute their goods and services,” said Breaux.

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