BOEMRE ENVIRONMENTAL STUDIES PROGRAM:  ONGOING STUDIES

BOEMRE OCS Region:

Gulf of Mexico

Title:

Structural Shifts and Concentration of Regional Economic Activity Supporting GOM Offshore Oil and Gas Activities (GM-92-42-135)

Planning Area:

Central and Western

Total Cost:  $74,644

Period of Performance:  FY 2007 - 2012 

Conducting Organization:

BOEMRE Contact:

Description:

Background:  Consolidation of the energy business has been a painful fact for many communities in producing basins in North America for nearly two decades. Its economic impacts are two fold. First, consolidation quite often results in lower employment levels and overall wage payments as duplicative efforts, tasks, and activities are eliminated. Second, some communities can see decreases in employment as remaining jobs are concentrated in particular area. The concentration of oil and gas activities in Houston over the past two decades is a clear example of this trend.

The effects of consolidation on local communities are complicated. After a sustained period of consolidation and contraction in the industry, higher prices over the past six years as resulted in a resurgence of oil and gas related activity. The employment benefits of this activity, however, have been uneven. For instance, over the past two decades there appears to be a relative shift of oil and gas related activity away from New Orleans, LA and towards Lafayette, LA and Houma, LA. While part of this shift may be attributable to overall consolidation trends, another possible justification may be based on overall employment trends in industry over the past decade.

Objectives:  The purpose of this research is to conduct a comprehensive examination of the concentration and industry-related changes in oil and gas related employment in Louisiana with a special emphasis in the relative regional changes between various Louisiana municipal areas.

Methods:  Research is divided into a of steps:

1. Compilation of employment, income, and wage data from the Louisiana Department of Labor and the Bureau of Labor Statistics on major metropolitan area basis.
2. Reconciliation of historic economic series between NAICS codes and SIC codes to make longer term comparisons.
3. Cllection of general industry statistics as controlling factors (rigs, production, prices)
4. Empirical analysis of relative changes in absolute and percentage terms. Analysis at total and sub-category level (production, drilling, services)
5. Empirical analysis/estimation of relative changes in labor productivity between the two areas and shifts in relative wages.
6. Development of locational quotients for concentration factors.
7. Potential regression/model analysis of changes in locational quotients and other industry factors. Development employment elasticity factors.

Products:  A comprehensive report and a collection of worksheets, figures, and tables to support BOEMRE analyses in Environmental Assessments, Environmental Impact Statements (EIS) and other documents.

Importance to BOEMRE:  Many of the consequences of OCS activities that are of most importance to states and communities are generated by changes within the industry itself. The research completed during the course of this project will identify and prioritize important changes and challenges and will be instrumental in understanding impacts in future EIS analyses.

Current Status:  Data from County Business Patterns (from the U.S. Census Bureau) and Quarterly Census of Employment and Wages (from the BLS) has been reviewed and compiled.  All data collection activities have been completed, and most initial data analysis activities have been completed.   Initial draft analysis has been prepared, however additional work and analysis is required.   Preliminary empirical results are positive and support many of the initial research hypotheses for this project.   Additional Louisiana employment analysis has been conducted for this project in conjunction with other research on moratoria-related impacts. An initial draft report will be submitted for BOEMRE review in early 2011.

Final Report Due:

August 2011

Publications:

Affiliated WWW Sites:

Revised date:

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