Louisiana, Texas To Gain Thousands of Energy Jobs At Start of 2023
Louisiana and Texas are set to gain thousands of energy jobs in the first part of 2023, the LSU Center for Energy Studies said in its 2023 Gulf Coast Energy Outlook.
As in previous years, this edition of the Gulf Coast Energy Outlook (GCEO) provides a comprehensive overview of the Gulf Coast region’s energy industry outlook for the upcoming year.
Last year’s GCEO addressed post-pandemic operational adjustments implemented by the industry, as well as the impacts of the 2020 and 2021 hurricane seasons.
The 2023 GCEO addresses the implications of the Russo-Ukrainian war on global energy markets and energy security. The impacts of decarbonization policies and the Inflation Reduction Act on corporate strategies are also considered.
LSU believes that long-run energy demand growth will lead to increased U.S. energy exports; however, a global recession would reduce demand for energy products.
An ongoing Russo-Ukrainian conflict will force global energy supply adjustments. Crude oil prices will gradually attenuate over the next several years, while Gulf Coast natural gas prices will likely remain elevated – relative to post-2008 historic trends – due to LNG export pressures.
Supply chain constraints – caused by the economic recovery from COVID-19, sanctions resulting from the war in Ukraine, and continued Trump-era trade policies with China – will continue for the next year.
Decarbonization policies will challenge existing Gulf Coast energy manufacturing but also create opportunities for the region to take the lead in developing low- and net-zero emissions products. Over the forecast horizon, the GCEO sees decarbonization creating considerable regional capital investment opportunities.
LSU forecasts that drilling activity will continue to increase but is unlikely to return to pre-pandemic levels. Oil production is expected to reach pre-pandemic levels over the forecast horizon, a sign of continued efficiency improvements. Both oil and natural gas prices are anticipated to fall over the coming year, LSU claims. While long-run oil prices are anticipated to converge back to pre-Russo-Ukrainian war levels, natural gas prices will likely settle at average levels higher than those seen over the past decade.
Oil and natural gas production in the region is anticipated to experience a decade of growth even though oil and natural gas prices are both in backwardation and expected to decline over the forecast horizon. Significant investment in crude oil pipelines is likely not needed at this time due to the investment in pipeline infrastructure over the past decade.
While solar capacity will likely experience significant growth over the next five or so years, it is anticipated to be a small share of total electricity generated for the foreseeable future.
As much as $175.4 billion in new energy manufacturing investment activity will occur through 2030, representing a $15 billion, or 7.9 percent, reduction in total regional capital investment relative to last year’s GCEO over a comparable period of time.
Production in the refining industry has rebounded to pre-pandemic levels and is anticipated to continue, although downward revisions may be needed if a serious global economic contraction arises in the upcoming year.
LSU concluded by predicting that Louisiana is expected to gain about 3,500 jobs by the second quarter of 2023. Texas is forecasted to gain about 12,200 upstream jobs between August 2022 and the second quarter of 2023. However, these model results are not anticipating employment in either state to reach pre-COVID levels over the forecast horizon.
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