Uncertainty stalls deepwater drilling in Gulf Baton Rouge, LA
Despite the ending of the official moratorium, no permits are being issued for offshore Louisiana deep-water drilling, and it’s having an impact.
Industry experts expect business to rebound, but it will be very very slow. Many companies have avoided lay-off of employees by reassigning employees to other projects in-state or out-of-state, or in some cases, out of the country.
The state, however, is losing income that it would be getting from drilling operations - taxes, royalties, etc. And that is not good; the state universities are seeing very deep cuts to faculty and staff and some programs are being axed altogether - for instance, Southeastern La. Univ. no longer has a foreign language program, and all the foreign language faculty have been let go, including tenured faculty. I find that incomprehensible, but the fact is that the university will keep whatever programs have the most students enrolled, and those programs that offer the most promise of employment after graduation, rather than something like a foreign language program.
The whole story about the drilling is here. The first few paragraphs are below:
With oil hovering around $90 a barrel, near a two-year high, the mood should be upbeat in south Louisiana’s oil patch.
Yet many local oil companies and the businesses that support them remain largely sidelined by the uncertainty over deepwater drilling after the Deepwater Horizon disaster.
The moratorium imposed shortly after the rig exploded in April has officially ended, but no new permits have been issued for deepwater drilling in the Gulf of Mexico, the bread and butter of the south Louisiana oil economy.
Doomsday predictions that the industry would collapse during the moratorium have proven unfounded.
Many companies are making ends meet by going into shallower water or focusing on natural gas fields elsewhere in the state and country.
The question, say many in the business, is how long that can continue.
“Right now, the outlook for the near term is grim,” said Port of Fourchon Director Chett Chiasson, who oversees a Lafourche Parish facility that depends on deepwater oil-and-gas activity. “We know the industry is going to come back. It’s just a matter of when, and who is left standing when it does.”
Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, said long-term prospects remain “very bright.” Major oil companies are invested heavily in the Gulf, with $8 billion worth of oil and gas leases made over the past three years waiting to be tapped, he said.
But he said that enthusiasm is tempered by the critical struggles the industry faces in the short term.
The diversification and globalization of south Louisianan’s oil industry in recent decades has made it a bit easier for companies to wait that future out.
Frank’s Casing Crew and Rental Tools is a Lafayette-based firm that specializes in such things as renting offshore tools, providing work crews, welding and securely connecting thousands of feet of giant pipe — a critical job offshore.
The portion of the company’s business tied to deepwater drilling has “been at standstill since the beginning of the Horizon incident,” said Frank’s VP of Engineering Mike Webre.
Pipe destined for the Gulf before the moratorium — 25,000 to 30,000 feet of it — sits in a yard at the company’s deepwater fabrication facility at the Port of Iberia in Iberia Parish.
“That’s an estimate on the low end,” said Kumar Mallenahalli, who manages the fabrication yard.
Deepwater work for long-term projects has been trickling in, and the company has avoided layoffs, partly by sending crews to work emerging “shale” natural gas fields in north Louisiana, Texas and Pennsylvania, Webre said.