BATON ROUGE, LA (WAFB) - The message at Monday's Louisiana Oil and Gas Association, or LOGA, annual meeting was this is the worst it has ever been for Louisiana.
The Bayou State is the 3rd largest producer of oil in the country.
"Right now, the gas industry is experiencing one of the biggest down turns that we have ever experienced in the history of the industry," said LOGA President Don Briggs. "In the world today, there's over 1.5 billion barrels of stocked oil in pipelines & stockyards."
Thanks to an abundance of supply, many rigs across Louisiana are not drilling.
In fact, only 51 rigs are doing so. Briggs said that's the lowest ever.
Briggs says worldwide, 96 million barrels of oil are produced every day.
However, the daily consumption worldwide is 94 million barrels. That means every day, there are two million barrels left over. Since Nov. 2014, that's close to a supply of 1.5 Billion barrels, but there simply is not the demand for that much oil. It's why oil prices per barrel have plummeted.
"2014 & that area, we were close to $90-100 a barrel for oil & it's gotten as low as a few weeks ago to $27," said Briggs.
When it comes to gas prices, that's great news because we have seen prices as low as $1.40 in parts of Louisiana. But for every $1 the price d rops per barrel, that's $12.5 million lost to the state's budget in lost tax revenues. Right now, Briggs projects the low prices have set the state back at least $700 million.
"The folks in the oil patch are suffering. Folks are going to start losing their homes they have. It's a function when does oil come back," said Sen. Dan Claitor.
Briggs said since the downturn, an estimated 20,000 people have lost their jobs. Because prices are so low and producers would have to sell a barrel at a loss, they have decided to wait it out instead, such as in north Louisiana.
"They need $45/barrel oil to break even. They're selling for down to $35," said Briggs.
Unfortunately, there's no immediate solution to the problem, but Sen. Claitor said Louisiana and it's people will make it through.
"We've had these kind of difficulties before. We're resilient people. We'll figure a way out of it," said Sen. Claitor.
A barrel in Louisiana is currently selling on average $40/barrel.