While driving to campus every day, I notice the falling oil prices and think to myself how wonderful cheap gas is as a consumer. But as a petroleum engineering major, my thoughts quickly turn to “S—, I’m out of a job.”
Between June 2014 and September 2015, the United States lost nearly 86,000 jobs attributed to falling oil prices. The federal government needs to step in before small businesses and Louisiana’s economy are decimated by a worldwide economic war.
Baton Rouge economist Loren Scott conducted a study in 2014 and found that the oil and gas industry economically impacts Louisiana for $73.8 billion, making it one of the most influential industries in the state. Low oil prices are hurting Louisiana’s economy. We’re down to $30 a barrel, the lowest price since the early 2000s.
Meanwhile, the world’s oil production soared to almost 80 million barrels a day in 2015. The last time oil prices were this low, countries only produced 70 million barrels per day. The culprits? The Organization of Petroleum Exporting Countries and the Persian Gulf allies.
Countries and companies around the world cut production, but Saudi Arabia and Iran plan to increase production in 2016. Small oil and service companies in the United States feel the blow of low oil prices more than the Persian Gulf states.
It’s time the United States stopped catering and complying to the demands of Persian Gulf oil states. OPEC controls approximately 80 percent of the world’s oil reserves and more than 40 percent of the world’s oil production. Most of us weren’t alive for the 1973 oil crisis, but the situation would be even more devastating today. Imagine rationing out and limiting gas for everyone. It’s both undesirable and unrealistic.
We need to become energy independent to prevent repeating history and to save thousands of jobs. I don’t recommend bailing out most industries, but the government should further subsidize the oil and gas industry to save jobs and companies.
Saudi Arabia, Iran and Iraq are waging an economic war to destroy oil companies in America and globally. They believe they can keep their companies alive and countries under control through the low prices. We should oppose their unwillingness to cooperate with the rest of the world. If these countries believe they can intimidate the world oil industry, the United States needs to show them otherwise.
According to The Guardian, King Abdullah of Saudi Arabia has already spent billions of dollars in social programs to help the poor in his country, which are estimated to be a quarter of the population. Can Saudi Arabia continue this war for another year or two with its current social issues?
He is playing a dangerous game. Should he run into economic trouble, his country would be ripe for civil war and unrest. Saudi Arabia should work with the rest of the world now so it does not come to that later.
Louisiana feels the strain on the oil industry more than most other states because of our reliance on it. Louisiana, the University and our futures are directly linked to choices our government and OPEC members make.
Garrett Marcel is a petroleum engineering senior from Houma, Louisiana.