Scott: Forecast on jobs not bad
The effects of a continued moratorium on offshore oil and gas drilling and possible added federal taxes related to oil exploration may hamper the Louisiana economy, long after the BP oil leak, said Loren Scott Wednesday.
Job growth for the state is projected to be flat over the next two years adding just 10,600 jobs, as industry leaders in the oil and gas sectors continue to worry about the effects of a moratorium on offshore oil and gas exploration in the Gulf of Mexico and proposed multibillion-dollar federal taxes on the oil extraction industry, according to a report by Louisiana economists.
That outlook aside, the Baton Rouge and Lake Charles metro areas are expected to lead the state with the fastest growth rate, the Louisiana Economic Outlook: 2011 and 2012 concluded.
The annual report was presented Wednesday by co-author Scott, a retired economics professor at LSU, at a BizTech Expo luncheon at the Baton Rouge River Center. The study looks at the health and viability of the state’s nonfarm industry sectors.
The Baton Rouge metropolitan region is expected to add 3,000 jobs in 2011 — a jump of 0.8 percent. In 2012, the capital region will add another 3,700 jobs, a 1 percent gain, the report said.
The Lake Charles metro area will tie the Baton Rouge region for fastest rate of growth, thanks to strength from its casino market that taps Texas and aircraft maintenance contract work by Northrop Grumman Corp. and Aeroframe at the Chennault Air Park.
In actual numbers of jobs gained, Baton Rouge comes in second behind New Orleans, the report said. New Orleans is expected to add 3,600 jobs in 2011 and 4,700 in 2012, for growth rates of 0.7 percent and 0.9 percent, respectively.
“This is the place to be,” Scott told the crowded hall, mostly made of Baton Rouge business folks. “There’s a lot of good stuff going on.”
Most of that good stuff lies in the continued strong construction development the Baton Rouge region is experiencing with about $4 billion in projects in the pipeline, according to the report. Also, the region’s strong petrochemical and oil refinery job base is projected to grow, the economists predicted.
What will hurt Baton Rouge’s job picture, said Scott, are the effects of state budget cuts due to a projected shortfall of nearly $110 million this year.
“If you think the problem we faced last year is bad, you haven’t seen anything yet,” Scott said.
The outlook for the Lafayette and Houma metro areas is not as rosy. Because these regions rely heavily on the oil exploration and extraction industries, economists predict a 2 percent job loss in 2011 for the Lafayette region and a 1.7 percent job reduction for the Houma area.
“I have been watching the Louisiana economy for 40 years. I have never seen oil prices where they are now, natural gas prices where they are now, and Lafayette and Houma losing jobs. I’ve never seen that,” Scott said.
Those areas are heavily dependent on the oil and gas industries. Scott said 17 percent of Louisiana’s gross domestic product comes from these sectors.
The economist sees the direction of the Obama administration’s energy policy as “anti-fossil fuel,” and positioned to hinder south Louisiana through drilling moratoriums and federal taxes aimed at oil exploration.
In fact, he did not mince words when he dismissed wind and solar energy as “stupid.”
“I’m sorry, but it’s just really stupid,” he told the room, clicking off a host of problems with wind turbines ranging from the not-in-my-backyard syndrome to bird deaths.
Scott went on to dismiss the effects of the BP oil leak, which gushed 4 million barrels of oil into the Gulf, saying much of the oil had dissipated.
“The solution to pollution is dilution,” Scott quipped. “Take a quarter teaspoon of oil and put it in an Olympic-sized swimming pool. That’s what you have here.”
Metropolitan areas in the northern half of the state are expected to hold their own in the next two years with modest job growth.
The Shreveport-Bossier area is expected to add nearly 2,000 jobs in the next two years, helped in part by the U.S. Air Force locating its new Global Strike Command at Barksdale Air Force Base.
Monroe has not seen a job-growth year since 2002, but is expected to pick up 800 jobs in the next two years, according to the economic outlook report. And Alexandria — the state’s smallest metro area — is also expected to pick up 800 jobs in the next two years.