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The Atlanta Fed's SouthPoint offers commentary and observations on various aspects of the region's economy.

The blog's authors include staff from the Atlanta Fed's Regional Economic Information Network and Public Affairs Department.

Postings are weekly.


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06/15/2015


Assessing the Impact of Oil Price Declines on Louisiana's Economy

It's no big secret that the energy sector is a huge contributor to Louisiana's economy. According to the Energy Information Administration, Louisiana is one of the nation's biggest energy producers and consumers, largely because of the industrial sector, which includes many refineries and petrochemical plants. In fact, with 19 operating crude oil refineries, Louisiana ranks second in the nation in both total and operating refinery capacity. Nearly 112,000 miles of pipelines transporting crude petroleum and natural gas run throughout the state and the Gulf of Mexico. Additionally, the Henry Hub natural gas distribution point in Erath, Louisiana, is the interconnecting point for nine interstate and four intrastate pipelines that provide access to major markets throughout the country.

A 2014 study by Louisiana State University economist Loren Scott cited that the oil and gas industry's total direct and indirect annual impact on the state economy is around $73.8 billion from taxes, royalties, fees, salaries and other money spent in Louisiana by the industry. Also, according to the U.S. Bureau of Economic Analysis (BEA), oil and gas extraction and petroleum and coal products manufacturing accounted for more than 12 percent of Louisiana's real gross domestic product in 2012.

Consequently, what happens in energy markets influences Louisiana's economic performance. So when oil prices tumbled in 2014, I wondered about the extent of the impact on the state's economy. A barrel of West Texas Intermediate crude oil fell from a peak of more than $105 in mid-2014 to less than $50 a barrel in early 2015. The price has since recovered a bit, to about $61 a barrel as of June 11, yet it remains a fair distance from last year's peak (see chart 1).

Chart-1

Earlier this year, the Atlanta Fed's Energy Advisory Council shared some insights about changes in business activity and investment in the region as a result of lower energy prices, which I recapped here. But what about the labor market? During the last several months, I've seen numerous announcements of worldwide oil and gas layoffs, which Houston consulting firm Graves & Co. tallied at more than 100,000 jobs. How many Louisiana energy sector workers will be caught up in those layoffs?

Unfortunately, the true impact is not very easy to extrapolate. It's not as simple as extracting employment data on oil and gas industries, since pieces of so many other industries (such as manufacturing and construction) support the energy sector. Plus, even more industries are influenced by the energy sector's growth or contraction, such as education, health care, tourism, and services industries—it's extremely difficult to determine the number of "spillover" jobs created or lost. Using an input-output table constructed by the BEA, the impact study cited above estimated that for every job created in the extraction, refining, and pipeline industries, 3.4 additional jobs are created in other industries in Louisiana. Holding all else constant, that multiplier should apply to jobs lost in Louisiana's economy.

Business contacts in the Atlanta Fed's Regional Economic Information Network (REIN) have cited instances of layoffs tied to falling energy prices over the last few months. Furthermore, various media outlets have reported recent layoffs in Louisiana's energy sector (for example, here, here, and here). However, REIN contacts also indicated that firms that generally compete with oil and gas companies for workers in a very tight labor market have scooped up recently laid off workers, likely masking the net impact and potentially clouding the multiplier calculation.

If the focus is on jobs lost in Louisiana's energy sector alone as a result of falling energy prices, at this time I'll concentrate on what's happened in the segment that encompasses the bulk of energy-related jobs: the goods-producing sector, which includes the mining and logging, construction, and manufacturing subsectors. When more detailed industry data through the first quarter of 2015 are published by the U.S. Bureau of Labor Statistics (BLS) later this year, I'll revisit the impact on specific energy-related industries.

In mid-2014, when the price of oil peaked and then began to fall, jobs in the goods-producing sector in Louisiana followed a very similar trajectory (see chart 2).

Chart-2

In July 2014, the goods-producing sector contributed about 4,000 new jobs on net in Louisiana. Then, as the price of oil began to fall, job creation followed suit, and in January 2015 the sector subtracted nearly 3,000 jobs. Judging from the data, as well as REIN anecdotes, it is clear that oil price declines from mid-2014 to early 2015 resulted in job losses in Louisiana's energy sector. Recent BLS data reflected just 800 net goods-producing jobs lost in the state in April. So is the environment improving, considering oil prices recovered a bit?

Reports from REIN contacts have been mixed. Some business leaders indicate that the volatility of lower energy prices has become better understood and integrated into flexible business plans, positioning firms to respond to the current environment. However, their response, in some cases, has involved and continues to involve layoffs, though these reports have tempered recently.

Time will tell what the ultimate impact of this period of precipitous oil price declines will be on Louisiana's economy and labor market. I'll revisit this topic after our next Energy Advisory Council meeting and the release later this year of detailed industry data from the BLS.

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the Regional Economic Information Network at the New Orleans Branch of the Atlanta Fed

June 15, 2015 in Employment, Energy, Louisiana | Permalink

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04/02/2015


Tracking Energy’s Trajectory

Last week, the Atlanta Fed's Energy Advisory Council convened to share industry experience during the last several months since gathering in November. I recapped some of the discussion elements following the November meeting here. At that time, the price of oil had declined by about 40 percent since its mid-June 2014 peak. From that time through last week, the pricing trend continued along a downward trajectory (though February saw a slight rise that tapered in March), with both Brent and West Texas Intermediate spot prices down by more than 50 percent from last year's peak (see the chart).

West-texas-intermediate

Also, when the council met in November, exploration and production (E&P) firms—marginal producers in particular—were the focus of concern as a result of falling energy prices and had begun to reevaluate business models and technologies and renegotiate cost structures with service providers. At that time, the council acknowledged that sustained or declining oil prices may lead to capital spending reductions. During last week's meeting, the general sentiment descended somewhat, and the discussion shifted from potential to definitive reductions in business activity, investment in particular.

Council members shared their opinion that energy investment had indeed slowed in the region, listing billions of dollars of project delays and cancellations of efforts not already underway, including more than just E&P firms. Oil-field service providers, industrial construction companies, and manufacturers of pipeline and other industrial equipment also felt the effects of low energy prices through reduced business activity. Furthermore, council participants reported that drilling permits for new oil wells declined in the region, which is a national trend that continues in the face of mounting production and supply of oil. (You can see updated drilling rig count information.) This reduced investment is important considering that nationally, energy is a big contributor to gross domestic product growth, as described in a recent Atlanta Fed macroblog post. In a nutshell, expectations for growth in 2015 declined among most advisory council members with direct ties to oil and gas production and/or support. However, they shared a general sense that the industry will see a pick-up after 2015 and that delayed projects will resume.

Conversely, two other sectors represented on the Energy Advisory Council continued to expand. Growth in utilities was strong, particularly the industrial segment, and the petrochemical industry experienced expansion in most business segments. In fact, we continue to receive reports about petrochemical investment along the Gulf Coast from council members and business leaders in the Atlanta Fed's Regional Economic Information Network. These industry exceptions were not a big surprise considering that both industries use oil and gas products as feedstock for operations; for them, lower energy prices are good for business.

So, where is the oil and gas industry headed, and will investment pick back up? Many factors are at play—for example, global economic growth and its relation to supply and demand, geopolitical events, oil storage levels, to name a few—and they are clouding my crystal ball. Nevertheless, on the whole, Energy Advisory Council members indicated that they will continue to approach 2015 cautiously and pay close attention to energy prices as a driver of decisions, and they expect that oil and gas investment and projects will accelerate beyond 2015.

April 2, 2015 in Energy, Louisiana, Oil | Permalink

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Exploration may be down, but doesn't that mean production has increased?And refineries must be booming in the LA area. As you mentioned, industries that use petroleum as feed stock or to produce intermediaries must be doing well. Is there any kind of balance effect for the industries that are doing better because of the drop in oil prices to compensate for the loss of revenues from exploration?
Enjoy your column Ms. Durham.

Posted by: Ronald Bowlin | 04/03/2015 at 11:50 AM

12/17/2014


A Timely Talk with Energy Professionals

If you read or watch the news, you've undoubtedly noticed what's happening with the price of oil. But for those of you who may have missed these reports, here it is in a nutshell: the price of Brent crude oil, the international benchmark, has declined more than 40 percent since its peak of over $115 in mid-June (see the chart).

Brent_spot_price

Many reports have discussed what the decline means to the energy industry and economy as a whole. In fact, the Atlanta Fed's very own macroblog published a post that examined the impact on energy investment and overall economic growth. We were also fortunate to be able to discuss this important and timely situation, along with other industry trends, with energy sector representatives last month during our Energy Advisory Council meeting held at the New Orleans Branch. So what did council members think about the declining price of oil? I gleaned a few key takeaways.

Industry effects
Council members reported that the recent drop in the price of oil had led exploration and production firms to reevaluate operational flexibility, cost-management strategies, and extraction technologies. These firms also initiated renegotiations with oilfield service companies for reductions to pricing structures, which a recent report suggested may drop as much as 20 percent.

In addition, council members conveyed their expectation that marginal oil producers may be negatively affected by falling oil prices, as their breakeven point is typically much higher than the larger producers. They shared that foreign oil-producing countries that acquire a majority of their revenues from the world's most traded commodity may also be adversely affected, which is a known concern among many key people inside the industry. The council also pointed out that if oil prices continued to decline or even hold at current levels, capital spending may be affected since firms would have fewer profits to reinvest into production and growth. Some reports indicate that this effect on spending is already beginning to occur. However, some members told us that they anticipate continued steady production in both deepwater and onshore drilling since many of these projects are large scale and long term and have high front-end costs (which in many cases have already been funded). Decisions about future projects may need to be reconsidered, however.

All in all, the Energy Advisory Council meeting was very timely, considering our attempts to understand what was happening globally with the price of oil and its impact on the economy. It will be interesting to learn how the energy industry will have adapted to current events when the council convenes again in March 2015.

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the Atlanta Fed's New Orleans Branch

December 17, 2014 in Economic Growth and Development, Economy, Energy, New Orleans, Oil | Permalink

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Industrial Info Resources reports 2014 construction and maintenance spending on U.S. pipelines declined 10% while downstream chemical process and manufacturing plants increased spending more then 80%. 40 new natural gas fired power plants being planned valued at $20 Billion.

Posted by: Donald Cotchen | 01/22/2015 at 10:19 AM

Great article! My thoughts are that with prices dropping in countries that might be prone to recession, will consumers not spend the money they are saving because they continue to wait for prices to drop. Encouraging deflation.

Also, airlines that have locked in fuel prices 90 days in advance, how will they react in the near future contracts?

Posted by: Ronald Bowlin | 12/20/2014 at 08:19 PM

04/23/2014


Key Issues Fuel Discussion of Energy

The Atlanta Fed's Energy Advisory Council met on March 25 for its semiannual meeting to discuss current economic conditions in the energy industry. On the whole, council members were optimistic about the energy sector and expect growth in 2014 to be solid in most of the sector's areas. However, council members shared concerns about infrastructure and transportation constraints and labor trends.

The unusually severe winter weather—and its exposure of limitations in the U.S. natural gas distribution infrastructure—was also a key topic of discussion during the meeting. Demand for natural gas was high and regional supply was sufficient, yet transportation and distribution were severely limited, particularly to the Northeast. To meet the demand for utilities, many power providers resorted to using coal instead of natural gas.

Some council members spoke about the importance of the rail industry in the distribution of energy products; demand for rail fleet was high and expected to grow. Members expressed hope that increased use of rail transport would help resolve transportation issues, yet many energy representatives were concerned that the rail industry would not be able to build fleet fast enough to keep up with demand.

Council members also discussed ongoing shortages of skilled labor. A shortage of engineers has led businesses to consider offshoring engineering and conceptual work. Firms were also concerned that there would not be enough tradesmen to execute projects slated for implementation later this year and into 2015. The shortages have created backlogs and caused firms to offshore an increasing number of projects, particularly modular construction of plants, meaning that a company unable to find the skilled labor needed to construct a plant facility may instead have the plant constructed abroad in modules and shipped to the United States for assembly. The technology required to transport large parts and equipment has become readily available and has become more cost effective than it was a few years ago.

Overall, council members are optimistic about the present and future of the energy sector, even as they continue to encounter challenges that must be surmounted to allow the sector to continue to thrive.

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the New Orleans Branch of the Atlanta Fed


April 23, 2014 in Economy, Energy, Southeast | Permalink

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11/05/2013


Energy Industry Keeps on Track

The Atlanta Fed’s Energy Advisory Council met at the New Orleans Branch on October 21 for its semiannual meeting to discuss current economic issues in the energy industry. Members were largely optimistic when sharing their views about demand, productivity, and pricing, which correlates to the ongoing “energy boom” we have discussed previously in SouthPoint. That said, some council members expressed concern about longer-term labor trends and noted ongoing uncertainty surrounding fiscal and regulatory policy issues.

We’ve heard for quite some time about the increase in oil and natural gas production, particularly related to shale resource production, processing, and transportation. With regard to the latter, council members discussed the importance of rail industry investment, which has been substantial recently. Increased use of rail transport has helped resolve transportation bottleneck issues that arose with rising production from shale resources. In fact, the American Association of Railroads reported that the U.S. rail industry has seen an unprecedented surge in crude shipments from less than 9,500 carloads in 2008 to more than 234,000 carloads in 2012. The numbers continue to increase in 2013. There were 97,135 carloads in the first quarter, up 166 percent from the first quarter of 2012.

With regard to pricing, council members generally agreed that natural gas prices will eventually rise. Factors behind the increase will likely be twofold: first (and probably most importantly in the near-term), once exports of liquefied natural gas begin, the supply glut in the United States is expected to alleviate, aligning U.S. pricing more closely with world prices. Second, the abundance of natural gas is prompting investment in technology dependent on it (for example, transportation, utilities, and manufacturing). As more projects that consume natural gas come online, higher demand is likely to push up market prices.

Some council members reported some concern about employment in the energy sector, because demand for skilled workers has outweighed the supply and led to labor shortages. One member pointed to an age gap in staff educated in engineering and possessing specialized skills. This appears to be tied to the decline in geology and energy-related education programs in colleges and universities following the oil price crash in the 1980s. Although these programs have regained popularity in recent years, and the supply of recent graduates with the desired degrees is growing, there is likely to be an experience gap that could be difficult to fill as current, more tenured workers retire.

Finally, though the Energy Advisory Council was generally upbeat about current industry conditions, members agreed that issues such as uncertainty surrounding fiscal policy, regulations, and ambiguity in the tax code are weighing on their confidence in the outlook. However, despite these concerns, members were unanimous in their belief that the policy and economic environment in the United States remained more attractive than most other energy-producing regions around the globe.

Photo of Rebekah DurhamRebekah Durham, economic policy analysis specialist in the Atlanta Fed’s New Orleans Branch


November 5, 2013 in Employment, Energy, Oil, Transportation | Permalink

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10/31/2013


Acadiana Spotlight: Optimistic about Local Real Estate Conditions

You may recall that my Atlanta Fed colleague Rebekah Durham and I reported on housing conditions in southeast Louisiana in our July 22 SouthPoint post. I recently returned from another trip to Louisiana; this time, my colleagues from the Regional Economic Information Network at the New Orleans Branch of the Atlanta Fed invited me to join them as they touched base with real estate contacts in the Acadiana region, which encompasses the city of Lafayette and the surrounding parishes. I’m happy to report that our real estate business contacts were quite optimistic on both the residential and commercial real estate fronts.

Contacts indicated that the Lafayette area has experienced tremendous growth over the past year, thanks in large part to the energy sector. However, they were quick to point out that growth in the energy sector only serves as “four of the cylinders in an eight-cylinder engine,” as they described growth in medical, fiber, technology, and petrochemical fields as other drivers of growth. Business contacts mentioned that several companies are in the process of relocating high-paying executive positions as well as management positions to the Lafayette metropolitan statistical area. This growth has had quite a positive impact on the local real estate markets.

On the commercial real estate side, contacts reported that a fair amount of construction activity is taking place in the industrial and retail sectors, with considerable construction of medical office space also under way. Contacts indicated that this increased construction activity has been steady during the past year and a half and encompassed both existing firms wanting to expand their space and firms new to the area undertaking construction. Commercial real estate brokers expressed little to no difficulty in leasing existing space.

On the residential real estate side, business contacts reported that home sales are up more than 13 percent from a year earlier. Contacts indicated that the jump in mortgage rates seems to have raised demand more than it deterred potential buyers. Though new listings are up more than 17 percent year over year, contacts noted that the months’ supply of homes for sale dropped from 6.5 months to 5.3 months. Moreover, home prices have increased almost 2 percent from a year earlier, according to the Federal Housing Finance Agency’s quarterly house price index.

All said, contacts expect 2014 and 2015 to be even better than 2013 was. They pointed out that these large infrastructure investments by area businesses send a strong signal that the energy sector will not be leaving the area any time soon. As the nearby port expansions wrap up, more rigs come online, and manufacturing and petrochemical plants open their doors, business contacts are confident that an increase in real estate demand will follow.

Photo of Jessica DillBy Jessica Dill, senior economic research analyst in the Atlanta Fed’s research department


October 31, 2013 in Construction, Economic Indicators, Energy, Growth, Housing, Louisiana, Real Estate | Permalink

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08/20/2013


Energy Brightens Louisiana's Manufacturing Outlook

Oil and gas activity is at its strongest level in decades, and investment is a big part of the story. The Atlanta Fed’s Energy Advisory Council reported an estimated $160 billion in capital investment across the Gulf Coast for pending projects related to liquefied natural gas (LNG) import/export terminals and petrochemicals over the next several years. Numerous gas shale plays (a term for shale formations containing natural gas) and technological innovation in hydraulic fracturing (commonly called “fracking”) techniques have made supply of natural gas abundant and prices low.

This increased investment and plentiful and low-cost natural gas are having a major impact on manufacturing in Louisiana in particular, leading many industry experts to declare a “renaissance” and “new industrial revolution” in Louisiana. Chemicals manufacturing in particular is expanding at a rapid pace in Louisiana, considering natural gas is a key feedstock in its production process. Over the next two years, chemical firms are planning more than $60 billion in new and expanded investments in the state.

Loren Scott, an emeritus faculty member in Louisiana State University’s E.J. Ourso College of Business’s economics department, conducted a study of the chemicals industry in Louisiana, published by the Louisiana Foundation for Excellence in Science, Technology and Education in 2012. Scott reported the state’s chemical industry is thriving and providing thousands of jobs, billions of dollars in economic impact, and generous tax revenues to state and local governments. “The chemical industry is the top producer of direct jobs in the Louisiana manufacturing sector, a major player in the national economy and is the state’s top manufacturing exporter,” Scott said. The industry accounted for 7.3 percent of all earnings in the state in 2011, generating $8.9 billion and 26,944 jobs. Scott’s report provides a list of nearly 20 chemical firms that announced billions of dollars in expansions across Louisiana in 2012. He attributes this wave of growth to the competitive advantage generated by low natural gas prices.

The boom in Louisiana manufacturing is not limited to the chemicals industry. Others are reaping the benefits of low natural gas prices. Steel makers, for example, are gaining from both the reduced cost of manufacturing as a result of low natural gas prices and from strong demand for steel pipe used for oil and gas drilling. Companies are setting up shop closer to major gas distribution hubs in Louisiana, and others are polishing up aging plants to replace coal with cheaper natural gas. The Atlanta Fed’s Energy Advisory Council reported this capital investment is being made in the utility sector.

Employment growth in manufacturing should increase as these investments and relocations accelerate. The chart below shows that manufacturing job growth in southern Louisiana, where much of the state’s energy-related activity is located, has consistently outperformed the rest of the state and the nation as a whole.



What does all of this mean for the future of Louisiana manufacturing? It looks bright, as long as natural gas remains accessible and low cost—which could be challenged by other parts of the world with vast, untapped shale plays. With all of the excitement and progress it’s easy to forget that just three years ago, manufacturing was considered a declining industry in Louisiana. Energy-related activity, especially in the southern part of the state, is helping to shift that perception.

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the Atlanta Fed’s New Orleans Branch


August 20, 2013 in Employment, Energy, Louisiana, Manufacturing, Oil | Permalink

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12/12/2012


Energy Renaissance

Professor David Dismukes, associate director of the Center for Energy Studies at Louisiana State University (LSU), said in his presentation to the Atlanta Economics Club on December 11 that the United States is "entering an energy renaissance period." He added that the outlook is very bright and that the "United States—and North America generally—has quickly become one of the most attractive regions for new investment."

LSU's Center for Energy Studies provides energy information and analysis that respond to the needs of the legislature, public agencies, and business and civic groups. The center also maintains some very useful and unique energy databases. Dismukes has been on the LSU faculty for over a decade, and since that time has led a number of the center's research efforts on topics associated with almost all aspects of the energy industry.

New natural gas availability is having a considerable impact on all energy markets today and on a longer-term, forward-looking basis. The increase in production from shale is now migrating into liquids and crude oil production. Dismukes said that "the expansion of this revolution is increasing liquids production as well as facilitating additional natural gas production despite low prices."

"Reserve development, production, and capital expenditures are all up to record levels," he continued. He believes that the effect on hiring will be significant as the energy infrastructure expands. There will also be considerable economic development opportunities through lower energy costs.

Developments will change energy market dynamics, including those associated with clean energy initiatives and renewables, nuclear power, carbon capture and storage, and energy efficiency. "Renewables have a bright outlook, and the economics have seen significant improvements." Currently, 37 states have renewables portfolio standards policies in place that should continue to increase demand for renewables.

Regionally, the impact of the energy boom will be felt most directly in Louisiana, where most of the Southeast's energy infrastructure is located. But the longer-term implications of cheap, abundant, and diverse sources of energy will be significant for the rest of the country as well.

Photo of Michael ChrisztBy Michael Chriszt, a vice president in the Atlanta Fed's research department

December 12, 2012 in Energy, Louisiana, Oil | Permalink

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10/11/2012


More on Natural Gas

We've written before about David Dismukes, associate director and a professor at Louisiana State University's Center for Energy Studies (CES). He has added several presentations to the CES website highlighting the impact of natural gas extraction on the energy sector. He writes, "New natural gas supply availability is having considerable impacts on all energy markets today and on longer term" and that the "[t]raditional sectors of energy industry have proven they are high technology, high capital, and high growth."

Charles Goodson, president of PetroQuest Energy—an independent energy company engaged in the exploration, development, acquisition, and production of oil and natural gas reserves—and a member of the Atlanta Fed's Energy Advisory Council, presented "Natural Gas—The Bridge to our Energy Future" to the Atlanta Rotary Club in early October. His main points were similar to Dr. Dismukes in that the revolution in domestic energy production presents the U.S. economy with a significant opportunity. Among Mr. Goodson's points were the following:

"Natural Gas production has increased 16.6% from the end of 2008 despite a 60% drop in the natural gas rig count. U.S. natural gas consumption has not kept up with supply. New demand sources need to be considered given the available supply."

"The ramp up in natural gas production from shale gas has led to the collapse of natural gas prices and driven the industry towards oil/liquids rich production. Improvements in technology, notably horizontal drilling and hydraulic fracturing, are the key drivers in the ability to produce more hydrocarbons."

"Liquefied Natural Gas (LNG) imports are at an all-time low due to the increase in domestic supply. LNG export from the U.S. is likely given the excess supply. The greatest step the U.S. could make towards energy independence is to substitute natural gas for oil domestically which would help reduce foreign imports."

Some people are opposed to the process that has led to the increase in domestic energy production, and it is not my intent to jump into that debate. What seems inescapable is the fact that the United States is producing more and more oil and natural gas. What is also apparent is that we have not figured out what to do with it all yet.

Photo of Michael ChrisztBy Mike Chriszt, a vice president in the Atlanta Fed's research department

October 11, 2012 in Energy | Permalink

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09/14/2012


Energy Resources Abound

In looking back at drivers of regional economic activity over the past several years, one consistent theme has been energy. Discoveries of new resources and application of high-tech extraction techniques have led to a boom in the regional energy sector. Keeping up with information on these developments can be a challenge, but thankfully we have a great resource right here in the Southeast.

Louisiana State University's Center for Energy Studies (CES) is mandated to provide energy information and analysis that responds to the needs of the legislature, public agencies, and business and civic groups. The CES maintains some unique energy databases and is the official repository of energy information from the state and the Energy Council.

CES staff members respond regularly to requests from a wide variety of individuals and institutions for specialized energy data and information. The website contains a list of very informative presentations, many focusing on broader issues on the energy sector—including studies that show the impact of shale gas and oil production and the effect of hurricanes on energy infrastructure. 

Here at the Atlanta Fed, we tap into the CES on a regular basis for its knowledge and expertise. We also have a dedicated Energy Advisory Council made up of industry leaders from the region. Meeting three times a year, this council discusses all facets of the industry and investigates trends in oil-related industries, nationally and globally, which in turn helps inform the Atlanta Fed's assessment of the economy.

The Energy Advisory Council is headed by Bob Musso, senior vice president and regional executive of the New Orleans Branch, and assisted by the Bank's REIN staff from the New Orleans Branch. Information gathered from these contacts, and other energy contacts from the region, are incorporated into the Bank's internal and external reports on the state of the economy. Most recently, the council was instrumental in helping Atlanta Fed President Dennis Lockhart assess the impact of Hurricane Isaac on the Gulf Coast's energy infrastructure.

While our interest in energy focuses on its national impact, having southern Louisiana in the Sixth Federal Reserve District helps put the pieces together. Having the large, energy-rich state of Texas in its region puts the Federal Reserve Bank of Dallas in a similar position. The Dallas Fed produces the Quarterly Energy Update, which is another great source of information.

Whether it is data, analysis, or industry reports, resources for tracking the energy sector are vast. Given the growing importance of energy extraction and production in the regional and national economy, drilling into these information resources is well worthwhile.

Photo of Mike ChrisztBy Mike Chriszt, a vice president in the Atlanta Fed's research department

September 14, 2012 in Energy | Permalink

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