Producer activity in Louisiana’s Haynesville Shale generated about $10.6 billion in new business sales within the state last year, according to a recent analysis. That’s more than four times the amount that a similar analysis found was generated during 2008.
“New business sales in turn created new household earnings for residents of the state,” wrote Loren C. Scott, whose eponymous firm is based in Baton Rouge, LA. “As a result of these activities, nearly $5.7 billion in household earnings was created in 2009.”
One year ago looking at 2008 data, Scott found that $2.4 billion in new business sales had been generated by Haynesville activity (see Daily GPI, May 18, 2009).
Scott’s most recent analysis examined data from seven companies whose activities represent about 70% of the wells drilled in the Haynesville last year.
“Including the direct employment of approximately 4,318 employees and contract workers reported by these firms, there was an increase of 57,637 new jobs within the state in 2009,” according to Scott. “The job multiplier is remarkably large in this case due to the fact that $1.3 billion in lease and royalty payments were injected into the state’s economy by the extraction firms.”
Last year Louisiana lost 38,500 jobs, a decline of 2%, but had it not been for Haynesville activity the decline would have been steeper: 96,137 jobs, or 5%.
Scott noted that his spending estimates could very well below because traditional modeling does not account for the windfall-style of income generated by lease and royalty payments.
“The studies do not contemplate massive increases in a household’s wealth due to royalties and lease payments (equivalent in this case to winning the lottery).”
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