Dr. Loren Scott, economist and LSU professor, unveiled his Louisiana Economic Outlook for 2024-2025 recently. His economic forecast projects Louisiana’s economic future will depend heavily on the presidential election result, particularly when it comes to energy policy.
Louisiana’s economy and strong relationship with the oil and gas sector will largely depend on the presidential election. The Democratic Party, prioritizing climate change, advocates for policy that is “pro-renewables and anti-fossil fuels” which positions Louisiana in an unfortunate spot. President Joe Biden has placed a pause on new LNG export productions, which Vice President Kamala Harris has not yet commented on. On the Republican side, former president Donald Trump’s motto is “Drill Baby Drill”. Dr. Scott anticipates that Trump would not only remove the LNG pause but would ramp up production. While LNG production would increase economic flourishing in Louisiana, a Trump win doesn’t guarantee Louisianan’s financial freedom, as he plans to further inflation with increased tariffs and raised minimum wages. This leaves the parties’ policy differences in the energy sector “unusually wide” as Dr. Scott said.
Oil prices will average around $82 a barrel over the next two years, according to Scott’s report. Of course, this will be dependent on the supply and demand of oil, a highly inelastic demand, and our connection to Saudi Arabia. Natural gas prices, pertinent to Louisiana’s economy, are headed upward to about $3.10-$3.20 over the next two years. The rise will be made possible by adding and expanding LNG exporters, some projects of which are now under construction, including, a $21 billion Venture Global project in Plaquemines Parish.
Globally, the United States and Louisiana specifically are in good standing as far as oil and gas prices go. Countries like Europe and Asia are producing chemicals with $15 natural gas, whereas we make the same product out of $2.50, according to Dr. Scott’s report. In Louisiana alone, there are presently $34.4 billion worth of capital projects under construction and another $115.7 million worth of projects coming soon.
We in Louisiana are not the only people fighting for LNG exports and the betterment of our economy. Senator Bill Cassidy took the fight to Capitol Hill. He consistently defends and promotes the energy sector in our state by advocating, supporting legislation and even putting on events like the Energy Security Summit– an event that promotes all forms of energy including propane! Cassidy (R-LA) issued a call to action to the current presidential administration, saying, “The Department of Energy needs to do its job and finalize permits for projects harmed by the LNG export freeze—the majority of which are in Louisiana.”
Despite the uncertainties of the close presidential race, rising oil and gas prices and ongoing capital projects position Louisiana favorably in the energy sector. Louisiana has the potential to thrive and create a brighter economic future for its residents.