Gov. Jindal Blasts Drilling Moratorium at Rally for Economic Survival

Wednesday, July 21, 2010 - 5:29pm

LAFAYETTE – Today, Governor Bobby Jindal addressed the Rally for Economic Survival where he blasted the President’s deepwater drilling moratorium and called on the rally-goers to send a clear message to Washington, D.C. – end the arbitrary moratorium so thousands of Louisianians can go back to work.

Governor Jindal said, “I want us to send a clear message to Washington, D.C. today – our people don’t want a BP check, our people don’t want an unemployment check, our people want this arbitrary moratorium to end so they can go back to work.

“We are here in the heartland of South Louisiana, Cajun Country. Our oil and gas industry has been flourishing here for decades. Sure – there have been hard times and set backs, but for every set back, we have worked to make a comeback. I want there to be no mistake about it – we will beat this arbitrary moratorium and the strangle-hold it has put on our communities. We will use Cajun ingenuity and just plain good old-fashioned hard work to get this industry running again.

“We know that Cajuns are the rig managers, the toolpushers, the drillers, the roughnecks, the roustabouts – and even the owners and office workers – that produce the energy that fuels our nation. Today, we want the nation to know that too.

“South Louisiana is America’s energy capital. Each day, hundreds of thousands of Louisiana men and women go to work in the offshore oil and gas industry – or related jobs. But, these are more than just jobs. These jobs support our people, our families, our schools, our police stations, our communities, our way of life.

“Many times in this disaster I have been asked if Louisiana will ever recover. Will we ever be the same? Will we still be Sportsmen’s Paradise? Will our communities and our families triumph over this catastrophe? The answer to these questions is simply – Yes.

“There is not a doubt in my mind that we will recover and restore our coast and our wetlands. I am convinced of this because I know our people. Louisianians are resilient and will persevere. We have worked to rebuild from Hurricanes Katrina and Rita and then again after Hurricanes Gustav and Ike. We will continue to thrive in the most blessed state and the richest and most bountiful land in the world.

As we continue to respond to and recover from the first disaster of the BP oil spill, we must have the federal government undo the second disaster they caused with this arbitrary drilling moratorium – so we can revitalize our state and come back better than ever.

“Let’s tell Washington not to send our jobs overseas. Not to send our rigs overseas. We need the federal government to do their jobs so our people don’t have to lose their jobs.”

THE MORATORIUM’S IMPACT ON LOUISIANIANS

The Governor highlighted a number of facts and figures that show the importance of the energy industry to Louisiana as well as the severe negative economic impact the moratorium will have on the state, but he said that for every number represented in these statistics there is a person, there is a family, there is a story of how this arbitrary drilling moratorium is directly effecting Louisianians. The Governor told the stories of three people to highlight the devastating impact the Administration’s moratorium is having on Louisianians.

First, the Governor recognized Lori Davis and her company Rig-Chem – a family-owned chemical manufacturing and distribution company that has served the energy industry for over 30 years. Rig-Chem is a small business whose deepwater drilling clients accounted for over 70 percent of their business.

Governor Jindal said, “Through hard work, Rig-Chem was able to become a competitor in this market and they finally thought they had reached security in their company. Then the moratorium hit. Now, Lori says she has all but forgotten plans for expansion and remodeling. She says they are not even a thought anymore. Her employees are scared she says because they do not know what tomorrow may bring.

“Initially, the company went into what they referred to as ‘Hurricane Mode,’ thinking that they would be able to quickly bounce back as they had done time and again when storms hit in the past. But Lori realized they were working with the wrong mentality. She said, ‘When you know what you’re having to face you can fight those battles, but now we are fighting the battle against the government, against people that are supposed to help and protect us in difficult times.’

“Lori says Rig-Chem has had no debt and has never been dependent on anyone else to support itself. Due to the moratorium and the company’s uncertainty, Lori has gone to the bank to establish a line of credit in hopes to ensure the future of her company. Lori said she will never forget the day she watched boatloads of equipment coming in from offshore recently – after they had likely demobilized a rig. She said ‘It’s a helpless feeling watching all that come back in when you know there is nothing you’ve done to cause this, or nothing you can do to change it but keep talking about it and hope that people understand.’”

Rig-Chem is now working to change its focus by creating more international business opportunities. The company is having to consider sending employees overseas instead of keeping jobs here in Louisiana. The Governor said, “Having our small, family-run companies relocate jobs abroad in a national recession is the exact opposite of the strategies we should see coming out of Washington.”

Second, the Governor profiled Cory Kief who is the president of Offshore Towing, Inc., a consortium of four companies in Larose that move drilling rigs in shallow water. Although Offshore Towing does operate in shallow water, they are being affected by the “de facto moratorium” there by which the federal government has reduced shallow-water permits almost to a grinding halt.

Governor Jindal said, “Cory told us about mass confusion with the federal government’s regulators. He said he is unable to plan because there is too much uncertainty in the permitting process. He said he had only heard of one new drill permit being issued for shallow water drilling since the moratorium and that he’s already had to lay off one employee and fears for the future. He said ‘Right now it’s a short term problem, but if they don’t resolve the issues in short order it’s going to be a long term problem. Which means having to tie up equipment and send people home. We are looking at that every day.’

Third and finally, the Governor recognized Dwayne Rebstock who is the CEO of Allport Services. In October 2007, Allport opened its doors as a Logistics Brokerage Company in Port Fourchon. On March 1 of this year, the company debuted its new Multi Service Dock Facility. The new facility boasted 600 feet of waterfront property and 11 acres of area overall. This Multi-Service Dock Facility would support drilling and production in the Gulf. Soon after its expansion, Allport signed a major client, indicating a rising interest in the new facility. Then, the moratorium was issued just weeks later and Rebstock’s first major client backed out – on the exact date the moratorium was enacted.

Governor Jindal said, “Allport is now working spot jobs because as Dwayne puts it, ‘no major company will make a move, we’re all just waiting to see what the President will do.’ To make ends meet, Allport has converted part of its yard into housing for BP workers to stay afloat, but despite their efforts – they’re still losing money. As a result of the moratorium, Dwayne has laid off some of his management staff and labor force and he doesn’t expect them to stop layoffs until the moratorium is lifted. He’s also enacted a 10 percent pay cut across the board for all of his employees. Dwayne fears he will ultimately have to close his doors as a direct impact of the moratorium. He has been in continued contact with the major client he lost and Dwayne says if the moratorium would cease to exist they would come back to Allport and operations would start up immediately.”

GULF ECONOMIC SURVIVAL TEAM (GEST) & SOLUTIONS

Since its inception in early June, GEST has collected over 167,000 signatures from Americans as far away as New York and Pennsylvania in support of a petition calling on President Obama to lift the arbitrary drilling moratorium and save American jobs and the economies of coastal communities already battered by the BP oil spill.

Governor Jindal said, “GEST, ledby Lieutenant Governor Scott Angelle, is taking this message all the way to Washington. We want the nation – and especially this Administration – to hear about all the stories you have heard today and all the stories of every person here today that has been affected by this arbitrary moratorium.

“Our message is simple - every day we wait is another day that we play into the hands of other countries looking to take American jobs and investment. Every day we wait is another day we further jeopardize our energy security.

“We absolutely must tell Washington to do their jobs to make drilling safe instead of costing thousands of Louisianians to lose their jobs with a total shut down of deepwater drilling that didn’t even follow the safety advice of the federal government’s own experts.

“In Washington, some seem to think that rigs will just sit around and wait until the federal government says they can drill again. In Louisiana, we know this is not reality. These rigs are mobile and many of them rent at about $500,000 a day. When Washington says they can no longer drill in the Gulf they will leave the country – and some already have left for other countries like Egypt. The first deepwater drilling moratorium the Administration issued was called ‘arbitrary and capricious’ and was overturned by a federal judge. Now – the Administration has issued a second moratorium.

“This second suspension of deepwater drilling issued on July 12 is a clear sign that the Administration is unwilling to follow the advice of their own scientists and instead insists on crippling our energy industry, our coastal communities, and killing jobs. They have already lost twice in court, but instead of listening to these legal rulings they are trying to game the system by initiating a second moratorium and then asking the court to abandon their move to block the first moratorium. The ultimate effect of this second moratorium is the same as the first – to shut down drilling operations in the Gulf. We must stand up and fight against this, just as we did the first time around.

“The folks in Washington just don’t seem to understand that you can’t just turn a switch on and off with these rigs. When they leave our coast to produce oil in other parts of the country or the world, the jobs that support them go too. Instead of an arbitrary moratorium, the Administration should listen to their own experts, and if they won’t listen to their own experts, I want them to listen to all the voices of the people here with us today.”

FACTS & FIGURES ON LOUISIANA’S OIL AND GAS INDUSTRY

  • Thirty-three percent of the nation’s domestic oil comes from the Gulf of Mexico. Eighty percent of the Gulf’s oil and 45 percent of its natural gas comes from operations in more than 1,000 feet of water, considered “deepwater.”
  • Port Fourchon in Lafourche Parish services 90 percent of deepwater operations in the Gulf of Mexico. At any given time, 5,000 employees are hard at work servicing the oil and gas industry at the port and 15,000 offshore workers fly in and out of the port each month.
  • Each drilling rig in the Gulf of Mexico employs 180-280 workers. Each drilling rig job supports 4 other jobs in the community.
  • In Louisiana coastal communities like Houma, Morgan City and Lafayette – 1 out of every 3 jobs is related to the oil and gas industry.
  • $12.7 billion in total wages are earned by employees working in the Gulf Coast oil and gas industry.

ECONOMIC IMPACT OF THE DRILLING MORATORIUM

  • The current deepwater drilling moratorium alone will result in an estimated loss of over 10,000 Louisiana jobs within a few months. The state risks losing more than 20,000 existing and potential new jobs over 12 to 18 months if the moratorium continues.
  • With 1,400 workers, onshore and offshore, supporting each of the 33 deepwater drilling rigs affected by the moratorium as many as 46,200 jobs may be idled by the moratorium across the Gulf Coast.
  • Lost wages for those jobs could be as high as $5 to $10 million per month, per rig, or up to $330 million/month in lost wages for the entire Gulf Coast.
  • New requirements for shallow water drilling are causing permitting delays that could lead to significant additional economic impacts on top of those caused by the deepwater drilling moratorium. Shallow water OCS drilling activities support thousands of Louisiana jobs in addition to those related to deepwater activity.
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