In Louisiana, we’ve got a seven-year itch for oil at $100 a barrel. But the markets are unlikely to scratch it, as global production continues to provide more supply.
The oil crash in late 2014 took prices from the three-figure stratosphere down to about the $26-per-barrel range. Thousands of jobs were lost, from Port Fourchon to Lafayette’s oilfield service companies.
Prices nudged up over time but the pandemic shattered records, with benchmark crude actually in the negative numbers for a short time.
Economist Loren Scott briefed participants in a Baton Rouge energy conference recently on rising prices, but noted that supply will expand to meet demand, meaning no long-term prospects of $100 or more pricetags can be expected.
More importantly, Louisiana’s natural gas continues to provide a huge boost to both exporters and petrochemical manufacturers in our state. It’s also a cleaner-burning fuel for electricity generation, here and abroad.
If oil prices and natural gas demand can support more drilling activity, that’s good news for Louisiana on the jobs front. But our future as an energy producer is not only on land, via fracking wells, but in the deep waters of the Gulf of Mexico.
The new administration in Washington was basically pushed into allowing a new lease sale in the Gulf via court action. But another federal judge in Washington has delayed the sale, apparently believing that federal law justifies blocking production of any fossil fuels whatsoever.
Our state cannot be a part of the energy future for America and the world if policymakers continue these erratic and inconsistent views, and the Biden administration slow-walks every lease sale in the Gulf.