A bust hits the Oil Patch as rest of nation enjoys cheap gas

HOUMA, La. (AP) — It might sound strange, but the penny-pinching folks in Louisiana’s Oil Patch can’t wait for the price of gasoline to go back up.

Cheap gas at the pump — though a welcome cash infusion for millions of American households — is a way of saying “recession” in south Louisiana, where oil wells are as common as shrimp nets and alligators.

Since 2014, Louisiana has lost about 12,000 oil and gas jobs as prices have declined, according to the Louisiana Workforce Commission. Nationwide, about 100,000 jobs related to the oil and gas industry have been lost since January 2015, the federal Bureau of Labor Statistics reports.

Many are left wondering when prices will rise again.

“Yesterday, I paid $1.87 for gas,” Patti Lafont said, shaking her head while waiting on tables at a restaurant in Houma, deep in the Oil Patch. “I would rather pay any day $3.87 per gallon because, over here, that’s what we live on: fishing and the oilfield.”

Houma is a city of 34,000 people in the steamy Cajun swamps southwest of New Orleans. It’s transformed itself from the sleepy farming and fishing town it was in the ’50s into a bustling hub serving the needs of oil drillers in the field, whether extracting oil on land or far out in the Gulf of Mexico.

Now — as is happening in other oil-dependent states such as Texas, Wyoming, North Dakota and Alaska — Louisiana is being clobbered by an unexpected worldwide oversupply of crude oil — a glut that has wreaked havoc on those economies.

Among factors making oil so cheap: a slowing Chinese economy, Saudi Arabia’s decision to not reduce oil production and, more recently, the lifting of the embargo on Iran’s oil. Adding to the over-supply are advances in drilling techniques like hydraulic fracturing. And then there’s the growth in wind, solar and natural gas.

A barrel of Brent crude oil sold for $35 on xxxday, a low not seen in more than a decade. So far, cheap gas is considered to be helping the U.S. economy more than it’s hurting.

Not here, though.

Oil-producing Louisiana, where drilling jobs are vital, has been crippled as it no longer makes sense to drill. The severe drop in oil prices has hammered a state government already struggling with budget problems and considering cutting funding for colleges, hospitals and public services to make up for lost revenues.

“Louisiana is in a recession,” said economist Walter Lane, at the University of New Orleans. “Oil prices are the primary reason.”

In Houma, the mood is grim.

“Reduced hours and layoffs are all around us,” said Greg Fakier, who runs a Main Street jewelry shop.

People are making comparisons with what happened in the 1980s. That infamous bust left high-rise buildings empty shells in New Orleans as people left in droves: Louisiana lost about 7 percent of its population then, according to a Louisiana State University study.

“I see no light at the end of the tunnel for business to pick back up any time soon,” said Mike Moncla, head of a Lafayette-based oil services company with a fleet of barge rigs. In 2015, the company topped 633 employees, while today it’s down to 270. “We are just producing too much oil.”

In Houma, workers are doing anything to make ends meet.

“People are going back to fishing,” said Roger Boudreaux, a 39-year-old oilfield machinist. “I got friends losing homes.”

He recently lost his job but found work changing oil at a drive-thru garage. Boudreaux now makes about $7 an hour. At the machine shop, he earned $20 an hour. He said the salary drop hit him hard while he raises three children left to his care when his brother died.

At a nearby gas station, Douglas Randall — a fisherman-turned-oilfield truck driver — stood beside his long-idle semi-truck awaiting his next job. He’s paid per load and works for oil companies.

“Slow. That’s the only way to describe it,” said Randall, 60. “It’s off by half at least, or more. How am I making it? Barely.”

Fakier, the Main Street jeweler, worried about entering a new normal.

“There is going to be less dependency on oil,” Fakier mused. “You’ve got electric cars coming out like there’s no tomorrow.”

His store was empty. The phone rang once. Diamonds and wedding rings aren’t high priorities nowadays in the Oil Patch. “So, how long does this take to heal up? It’s not going to be up in one year,” he predicted. “This is going to be slow progress.”

“It’s been several months since my dad’s drawn a salary,” said Amber Ahlf, a self-described “oilfield brat” born into an oil company family. “Pretty grim.”

She sat at the front desk of the Coteau Baptist Church. It’s hurting, too, as offerings have dropped off.

She nodded toward the closed-up Halliburton Co. industry service center up the road. “It’s a ghost town,” she said. “I remember when the parking lot was full.”


Bill Fuller contributed to this report from New Orleans.

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