Louisiana ranks ninth among the 50 states for crude oil production, with total production running right around 5.7 million barrels a month for the four months through September of this year.

That figure does not include the 42.7 million barrels a month produced in federal waters in the Gulf of Mexico. A recent study by the Mid-Continent Oil and Gas Association includes all federal Gulf production in Louisiana’s column “because the great majority of the offshore production is serviced out of Louisiana ports.” Including the offshore production as 100% attributable to Louisiana, the state produced about 1.45 million barrels a day in 2013 to rank second behind Texas production of 2.56 million barrels a day, and ahead of third place North Dakota, which produced 858,000 barrels a day.

Louisiana’s gross domestic product (GDP) in 2013 totaled $22.2 billion, of which $2 billion was attributed to natural resources and mining. Resource extraction accounts for about 9% of the state’s GDP, and the mining and logging sector accounts for 53,300 jobs in the state, about 2.7% of the total.

The study completed earlier this year by the Mid-Continent Oil and Gas Association reports that the total number of Louisiana jobs supported by production, refining and pipeline transportation totaled 278,000 in 2011. Those jobs generated $20.5 billion in household earnings, and the three industries together supported $73.8 billion in sales.

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Louisiana charges a severance tax of 12.5% of the value of the oil or natural gas produced on most wells. The rate varies depending on a number of factors, but 12.5% is the full rate for crude and condensates. The state’s 2015 budget project assumed a per barrel value of $96.70 and full-year production of 67.8 million barrels.

If crude oil averages $81 a barrel in 2015, the $15.70 difference could cost the state around $133 million in lost revenue. The state had already projected a drop of $25.5 million in severance tax receipts due to lower production and lower prices. For the 2014 fiscal year ended in June, the state collected $721.33 million in oil severance taxes and $126.43 million in natural gas severance taxes.

In November, Louisiana sold $200 million of general obligation bonds following a decision by state officials to drop the state’s revenue projection for the current fiscal year by $171 million. Louisiana’s debt is rated Aa2 by Moody’s and AA by both S&P and Fitch. The bonds carry an interest rate of 3% and were purchased by Citigroup Global Markets. The money will be used to pay for state-financed construction projects.

Since 2013 the royalty rate the federal government collects on new deepwater (greater than 400 feet) leases in the Gulf of Mexico is 18.75%. The prior rate for new leases was raised to 16.67% in 2007 from 12.5% where it had been for decades. The onshore federal royalty rate is still 12.5%, where it has been for nearly 100 years.

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In 2012, revenues from leases, royalty payments and bonus bids for the U.S. outer continental shelf (OCS) totaled $6.86 billion. Since 2006 the four Gulf Coast states of Texas, Louisiana, Mississippi and Alabama share 37.5% of the Gulf of Mexico portion of that revenue — that is the vast majority because there is only modest offshore activity anywhere else along a U.S. coastline.

While it is difficult to actually determine how much Louisiana actually reaps from federal payments for Gulf of Mexico production, one estimate is that it is currently tens of millions of dollars and will rise to an estimated $385 million by 2017 when all Gulf projects, not just new ones, are included in the payouts. That estimated amount may be significantly less if crude prices remain very low.

The economic impact of Louisiana’s crude oil production is dwarfed by the combined refining and chemicals manufacturing industries in the state. The state trails only Texas in refining capacity, and the 2011 value-added in chemicals manufacturing was more than $27 billion, higher than the value-added in petroleum and coal products (including refining) of over $18 billion. Value added by oil and gas extraction totaled $16.35 billion in 2011. Nearly 75% of the state’s manufacturing value-added comes from chemicals and petroleum/coal products. The oil and gas extraction sector provides as much value to the state’s economy as all the other manufacturing sectors combined.

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