Nathan Wilson | Reporter
Natchitoches residents made their affiliation with the oil and gas sector known in a Natchitoches Times poll run Feb. 6-9 and gauging the importance of occupations within the sector to local employment.
Respondents working on land rigs made up the largest group representing 26% of the total response, while those working offshore represented nearly 16%. Another 16% indicated that they were employed in operations overseas. Overall, a majority (58%) of respondents indicated they were employed in oil and gas extraction activities.
Loren C. Scott. PhD, a Baton Rouge based economist, has studied employment in the oil and gas industry and believes there are two sides to the Louisiana extraction industry: a detail that is often missed and from which Natchitoches is poised to benefit. During the period 2014-17, employment in oil and gas extraction grew in Natchitoches even as the number of jobs statewide suffered. Addressing this counter-cyclical trend, Scott noted, “While oil prices were declining, there was an uptick in natural gas prices, and these parishes are smack dab in the middle of the Haynesville Shale dry gas play.”
Scott refers to the fact that while linked, oil and gas extraction activities are distinct in Louisiana because of the geophysical properties of the reservoirs. Much of the oil produced in the state comes from wells in southern Louisiana and offshore where oil is the main product and the natural gas produced is a bonus. Drilling activity in the Haynesville shale in northwestern Louisiana, however, focuses on natural gas. With Natchitoches located along the southern edge of the only shale formation in Louisiana, it provides drilling jobs for residents commuting to isolated well sites, but parish residents also benefit from oil and gas extraction activities to the south. Among these, the multi-week deployment schedule employed by offshore oil and gas rigs offer job opportunities to those living further ashore.
Sixteen percent of respondents indicated working in midstream operations, involving transportation of oil and gas to ports, refineries and other markets. All of them reported working on pipelines, which criss-cross Natchitoches parish where many of them converge to cross the Red River near Grand Ecore. The immense volume of petroleum and natural gas generated across the state creates demand for infrastructure such as pipelines to transport the fluids efficiently. This scale also creates an economic incentive for constructing refineries, which in turn are fed by petroleum that is imported through port terminals in cities like New Orleans and Lake Charles.
One form of oil and gas employment that Scott did not measure at the parish level was that of contractors, who often move between projects as their skills are needed, and are therefore difficult to count. Twenty-six percent of poll respondents indicated that they were employed as contractors in oil and gas. Michels Corporation, which has recently opened an office on Mill Street in Natchitoches, is one such contractor assisting Energy Transfer LP during the construction phase of a pipeline running south of Natchitoches. When complete the Gulf Run pipeline will transport natural gas from a hub in Westdale south to Starks. The 135 mile pipeline will connect the Haynesville, Utica, Marcellus and Barnett shale deposits to the Gulf Coast to meet increased domestic and international demand.
Natchitoches residents who are not employed in oil and gas also benefit from the associated economic activity. Mike Moncla, president of the Louisiana Oil and Gas Association, points to the tax revenues generated as being vital to the state’s budget. Overall he notes that “With 26% of Louisiana’s GDP coming from oil and gas, all of the taxes that we pay…The byproduct side of oil and gas products are immeasurable.”
The economic byproducts of oil and gas extraction are not always obvious, but they are measurable. The poll conducted by the Natchitoches Times did not receive any responses from people employed in shipping petroleum or gas, but Darren Fenton, a truck driver from Marthaville, reached out by phone to talk about his job transporting produced water that is generated during hydraulic fracturing (fracking) operations in the Haynesville shale. Fenton said, “It gets separated out of the natural gas that comes up out of the ground.” Much like well water, the produced water originates in porous rock underground, but is usually saline, rendering it undrinkable. The site where produced water is treated is determined by the composition of chemicals and minerals. Fenton was headed for a site in St. Augustine during his call, “We transport these to various disposal sites, some in Louisiana, some in Texas.” he said.
Because of the dispersed distribution of well sites, oil and gas extracted in another state or country can create employment in Louisiana. Reflecting on this Moncla and Scott illustrated both the upside and downside to this, but identified different rivalries. Moncla remarked, “Louisiana only has one shale play… Texas has several, and they are very vast. Texas is also very pro-business.” Scott focused on international competition, “There is definitely a case for prioritizing onshore over overseas fossil fuel sources. Why in the world would we hamper our… exploration industries so that we can send those profits to Saudi Arabia rather than keep them in the USA.”
Nathan Wilson | Reporter