Five Years After Katrina, Obama's Drilling Moratorium Biggest Threat to Gulf Recovery

Sunday, 29 Aug 2010 06:38 PM

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Five years after Hurricane Katrina hit New Orleans and other parts of the Gulf of Mexico, both Republican and Democrat officials in Louisiana say the federal moratorium on deepwater drilling in the Gulf of Mexico, put in place after the BP oil spill, is now that state's biggest problem.

In fact, it was the major concern voiced to President Obama Sunday during his speech marking the fifth anniversary of the disaster.

Louisiana's congressional delegation – Democrats and Republicans – has a key focus of getting the president to lift the moratorium on offshore oil drilling his administration imposed in the wake of the BP spill.

“We’re also going to mention to him that this moratorium that is in place – this blanket moratorium is causing severe economic damage to small businesses as well as to the oil and gas companies, large and small, independent, as well,” U.S. Sen. Mary Landrieu, a Democrat, told The Hill. “So this is a lot of what he’s going to hear when he’s here.”

In speaking to reporters following the president’s speech, Gov. Bobby Jindal said he thanked the president for mentioning seafood in his speech but said he hoped to hear a more explicit discussion of the effect the federal moratorium is having on the state economy.

“The experts all agree we could end this moratorium before six months,” Jindal said. “Let’s put our people back to work … I didn’t personally object to a pause [in drilling] but I object to a one-size-fits-all moratorium.”

U.S. federal government officials and many environmental activists say the temporary ban on drilling is necessary to prevent further accidents. But people in the Gulf region are worried that many of the well-paying jobs provided by the energy industry might leave and never come back.

The recent oil spill left many fishing boats in the Mississippi delta and Gulf of Mexico coastal area idle.

But more people in Louisiana make a living from the oil and gas industry than from fishing and the moratorium has put hundreds of them out of work.

Waylon La Font and Mathew Cheramie are both residents of the Mississippi Delta who have worked on fishing boats as well as energy production.

They now fish on their own time because there is little work available, according to Cheramie.

"It is hard to find jobs and what work you do find is not guaranteed to be steady, you know, because with the economy already down like it is and they are putting this moratorium on us, it is just making things worse," he said.

LaFont says he used to make money in commercial fishing and in new home construction, but the oil spill and the moratorium have hit both.

"The moratorium is eliminating the oil field from working so, in turn, the people that have been working in the oil fields are not going to build, so we ain't have any residential homes being built, everybody building or repairing their homes," he said.

LaFont and Cheramie love nature and want to keep this area protected from oil spills, but Mathew Cheramie does not believe a moratorium on all deepwater drilling was necessary.

"What they need to do is take a step back, correct their drilling, continue, but step up your safety personnel to make sure the job is being done safely and correctly," he said.

Such views baffle many people from outside the region, according to Eric Smith, Associate Director of Tulane University's Energy Institute.

"They think the fishermen and the oil and gas guys should be duking it out in the street, but they are not, because they are the same people," he said.

Smith says the impact of the moratorium will worsen in the months ahead. He says rigs cost up to a million dollars a day, so oil companies cannot afford to leave them idle. He says eight drilling rigs that were on their way to the Gulf were diverted to other locations after the ban was imposed and two others have left since then.

"If you are a company like Murphy, which is one of the rigs that did leave, and you have prospects in Africa as well as here and you see you cannot drill in the Gulf for a couple of years and you are under contract for the rig for five years, you will just move it to Africa and work," Smith said.

Recently published reports revealed that U.S. government officials estimated that the moratorium could cost around 23,000 U.S. jobs. Most jobs in the oil and gas industry provide salaries far above average, so the loss of these jobs has a multiplier effect on the economy as a whole, not just in the Gulf coast region, but nationwide.

If the moratorium results in a large drop in Gulf oil production, that could also hurt the economy, since the Gulf provides about a third of U.S. domestic petroleum production.

But Smith says the world may also feel the impact if Gulf oil output falls much below the current 1.7 million barrels a day.

"The whole world only has about five million-barrels-a-day of spare capacity and consumption is about 87 million barrels, so when we take away that Gulf of Mexico production, you are talking double digit percentages of the world's capacity that gets chewed up," he said.

President Obama says the moratorium could end sooner than the November 30 date established by the Interior Department if a commission studying the disaster finishes its work sooner.

The president argues that, regardless of the moratorium's short-term economic impact, the action is necessary to protect the Gulf's natural treasures from potential future accidents.


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