A burst of flame and a gushing oil discovery later and Louisiana’s first oil well was born, setting off an energy boom that forever changed the makeup of the state economy.
Today, energy is still an economic force in southeast Louisiana, though the number of company headquarters in New Orleans — and the white-collar jobs that go with them — has eroded amid Houston’s rise as a global energy hub.
New industrial projects sparked by low oil and gas prices promise to add thousands of jobs in the region over coming years, from welders to pipefitters, plant operators to maintenance workers. But can New Orleans reclaim its title as a white-collar energy town?
Local experts say the answer to that question lies in Louisiana’s energy past.
Hank Torbert is a principal at RLMcCall Capital Partners, a private equity firm focused on energy with offices in New Orleans and Washington, D.C. On a recent weekeday, he pointed to a long history of innovation in the Louisiana oil and gas industry. Torbert noted countless Louisianians made fortunes designing a new well tool or building boats that could carry more and go faster.
This year, Torbert is advising a group of four New Orleans startups with products catering to the energy industry, including an oil spill containment system and software that helps companies curb pipeline emissions. Torbert partnered with the Idea Village, a local business accelerator, and a group of New Orleans energy executives to design the program.
Torbert said New Orleans needs to cultivate that “limitless level of oil and gas intellectual capital” to grow professional energy jobs.
“Our strength is coming up with innovative solutions for the oil and gas sector, whether in maritime, onshore or offshore,” Torbert said. “We are hustlers, if you will. We come up with great ideas.”
Michael Hecht, CEO of Greater New Orleans Inc., said New Orleans has emerged as a hospitable place to move or start a technology firm. It is only a matter of time before local tech growth intersects with the city’s historical strength in energy, he said.
Hecht mentioned Louisiana’s lucrative digital media incentive, which offers tax credits on in-state payroll and development costs for software development. The credit has already attracted video game developers and a GE software development center to the city. He expects to see more energy tech companies locating here to take advantage of the incentive.
New Orleans can struggle to reclaim the office jobs in engineering, accounting and business development as the industry consolidates in Houston and elsewhere amid historically low oil and gas prices. Or it can attract software development firms who can work anywhere, he said.
“The white-collar, software side of the energy industry is not focused in Houston. It’s diffuse,” Hecht said. “We can definitely fill that niche.”
Oseberg, an Oklahoma City-based energy tech firm, opened a New Orleans office in January last year. The company uses technology to sift public filings and provide companies with information on well designs, geological formations and drilling costs. President James Yockey describes its role as a sort of “Bloomberg for the energy industry.”
Yockey, a New Orleans native, said he wanted to move his family closer to home. New Orleans seemed like a better bet than Oklahoma City for attracting tech talent. The state’s software development incentive “sweetened the pot,” he said.
Yockey said it is “futile” to compete with Houston for Big Oil office jobs. Smaller firms such as Oseberg offer New Orleans growth, he said.
The company has 15 employees, including four at its New Orleans office. It hopes to secure private equity to add developers and expand to new states in coming months.
“To the extent there is going to be job creation, that is what it is going to look like,” he said.
Hecht and Torbert said New Orleans will continue to support a range of energy jobs. They pointed to One Shell Square in the Central Business District and the bustling Port Fourchon — promoted as “The Gulf’s Energy Connection” — two hours south of the city.
GNO Inc. predicts south Louisiana will add 60,000 jobs over the next decade as billions of dollars are spent to build new methanol and fertilizer plants, natural gas export hubs and other industrial facilities amid low oil and natural gas prices.
Torbert said those are good, high-paying craftsman jobs and they are in the pipeline. He hopes the public has the patience to invest a long-term play as energy tech hub. Those who want any sector grow in New Orleans need to ask themselves two questions, he said.
“Where do you want us to be? And are you realistic about the time it takes to get there?” Torbert asked.