by Kevin Connelly 

Those involved in the oil and gas industry know it’s a cyclical business.

What often goes unnoticed is the fallout from a period of downturn and the magnitude of its impact on a community.

Six or seven years ago, at the height of the Haynesville Shale boom, office space in downtown Shreveport was hard to come by. Liz Swaine, Shreveport Downtown Development Authority executive director, said businesses couldn’t find places to rent because there were no vacancies to be had anywhere in the region.

Gas and oil prices were high, which the public may not have been happy about, but business around the Ark-La-Tex was booming.

“Everybody loves it when times are good,” Swaine said. “But I think we all understand that it never stays the same.”

That certainly proved to be the case a few years later when natural gas and oil prices plummeted, leaving an entire industry faced with difficult decisions. After thriving as a major producer of shale gas beginning in 2008, there was suddenly too much supply of Haynesville Shale and not enough demand.

Gas prices were dropping and so were employment needs.

“From the small mom and pop companies to large operators, everyone was faced with extreme cutbacks,” said Louisiana Oil and Gas Association spokesman Ragan Dickens. “They were left trying to figure out how to do more with less.”

The downturn had direct effects on Shreveport, with more than a few companies setting up shop in downtown office space. Ever since then, consolidation has run rampant leaving plenty of office buildings void of tenants.

Swaine believes some of the companies are only downsizing — not completely leaving — but it's still led to more vacancies than normal. Oil service giants Schlumberger, Halliburton and Baker Hughes made significant layoffs last year. Petroquest and Stone Energy cut operating budgets. Enable Midstream cut more than 100 jobs from its Shreveport operation.

It all spelled doom for the high-rise business buildings downtown.

Cont...

At the industry’s peak, 139 rigs were drilling for Haynesville Shale across five regions, according to Dickens. Presently, there’s anywhere from six to nine rigs operating depending on the day.

Dickens isn’t optimistic natural gas prices will recover anytime soon, but there may be a positive outlook in the oil industry locally. He doesn’t believe it’s been hit as hard in Shreveport as it has in places such as Lafayette, where one of every four jobs is tied to the oil and gas industry.

“The good news we like to leave people with is that we’ve only used 30 percent of resources available in Haynesville shale wells,” Dickens said. “As demand goes back up, and technology continues to grow, at the right time Haynesville is positioned for success.”

The latest sign of hope is liquefied natural gas, which is gas that’s been converted to a liquid form for easier storage and transportation. Dickens believes if dry natural gas facilities in Haynesville Shale can work with liquefied natural gas companies, that could provide an industry for the future.

While that doesn’t solve downtown Shreveport’s immediate vacancy issues, Swaine is confident that if the city sticks to its plan and promotes itself properly, everything else will work itself out.

“We know that when people see the property at some of these business buildings, along with the amenities and accessibility, they will sell themselves,” Swain said. “When you can live nearby, have restaurants down the street, Robinson Film Center, Art space — all a few blocks away — it makes downtown pretty attractive.”

Read more: http://www.shreveporttimes.com/story/news/2016/05/08/oil-and-gas-de...