Oil Shocks and Inequality: Petro-Racial Capitalism in the Gulf of Mexico

After WWII, as the oil industry pushed into the Gulf of Mexico, Louisiana became a crucial hub for America's energy infrastructure. By the end of the 1970s, the economy of “America's very own petrostate” was deeply tied to oil. Projects like the Louisiana Offshore Oil Port, the nation's first and only deep-water port, followed decades of incentivized oil exploration that filled state coffers at the expense of a diversified economy and coastal wetlands. The high oil prices that caused hardship elsewhere after 1973 brought unprecedented wealth to the state through taxes and revenues. This influx of wealth was so significant that it also marked a new era for the Louisiana penal system, which saw dramatic expansion sponsored by oil surpluses. When oil prices plummeted in the following decade, the state plunged into debt and sought neoliberal answers to increasingly evident economic and socio-environmental problems. This resulted in the entrenchment of petro-racial capitalism, with accumulation reliant on petroleum and the perpetuation of extraction, disposability, and dispossession, immiserating Louisianians along specific racial and geographical lines. By examining the convergence of energy policies and economic shifts along the Gulf following the 1970s energy shocks, this paper argues that oil in the region not only did material work in the form of energy, transforming the landscape, but also political work as a catalyst for market-oriented culture. It infused the state’s political economy and deepened socio-economic inequalities, mass incarceration systems, and environmental injustices that persist today. Through this historical take on the ecology of neoliberalism in the South, the paper sheds light on forces shaping the Gulf Coast's contemporary energy and socio-political setting, as part of a story that is local in focus but national and global in its dynamics.