Three years ago, Obama unleashed hell on the Pelican State. At least that’s how our political and business leaders took it when the president ordered a six-month halt to deepwater drilling in connection with the BP oil spill disaster. Now the the Gulf is ”on the verge of its biggest supply surge ever,” leaving the industry scrambling to find skilled workers.
|President Obama stressed infrastructure needs during his recent visit to the Port of New Orleans.|
During his early November visit to the Port of New Orleans, President Barack Obama called for more investment in our aging transportation infrastructure to boost exports and maintain national competitiveness. He recommended three initiatives that could help port cities like New Orleans and the national economy as a whole: immigration reform, a new farm bill, and tax breaks for infrastructure upgrades.
The underlying theme, as always, was the need for job growth.
Due to the botched rollout of HealthCare.gov, the Affordable Care Act website, the president also was compelled to defend “Obamacare,” his signature domestic achievement. Not for the first time, he implored Gov. Bobby Jindal to take advantage of the new law by expanding Medicaid to more uninsured Louisianians. (Obama might as well have been talking to one of the metal shipping containers on the wharf. Jindal won’t reverse himself and risk tarnishing his anti-Obamacare cred before his expected run for national office in 2016.)
So as Obama talked about modernizing our port and expanding health coverage for low-income Louisianans, I couldn’t help but wonder: How does he intend to destroy our state this time? Where’s the destructive intent? Above all: Where is the hatred in his eyes?
These are important questions. After all, three years ago Obama unleashed hell on the Pelican State. At least that’s how our political and business leaders took it when the president ordered a six-month halt to deepwater drilling in connection with the BP oil spill disaster. The Obama administration claimed a safety overhaul was needed to reduce risks to rig workers and threats to the environment. Better safe than (doubly) sorry.
Local leaders did not see it that way. Instead of a precautionary “time out,” they assailed the moratorium as a catastrophic overreach. They claimed deepwater drilling rigs would flee to foreign shores and thousands would be put out of work. It would crush the region’s economy. Obama clearly misunderstood the importance of the oil industry in Louisiana, they asserted; if not, then the moratorium was his malicious attempt to cripple a key industry in a red state.
U.S. Rep. Bill Cassidy, R-Baton Rouge, summed up the chatter in board rooms and country clubs this way: “There’s just a sense here that Obama hates Louisiana.” Along with many others, Cassidy claimed that once the drilling rigs were driven away from the Gulf by the moratorium, they wouldn’t return any time soon.
In July of 2010, before BP’s Macondo well had even been re-sealed, oil companies organized a mass Rally for Economic Survival. The Lafayette Cajundome filled with thousands protesting the dire impacts of the moratorium.
Obama’s moratorium was apparently some new level of awful. South Louisiana had endured Katrina, Rita, the Federal Flood, and the oil spill itself, without need of a large-scale rally for “survival,” but now, with a moratorium taking hold, unified protest was the order of the day. The Chicagoan in the White House had to hear our state’s urgent plea: If we stop drilling, we die.
Waiting six months for better offshore safety standards was a risk we could not afford to take.
Oil industry apologists used coordinated talking points to predict that the moratorium would “devastate” the South Louisiana economy. The Rally website (still!) claims that “the President’s decision could result in the exodus of all deepwater rigs” and that “the Obama administration has signed the pink slips of tens of thousands of Louisiana and Gulf Coast citizens.”
Well, quite simply, none of those dire predictions panned out. The feared job losses in Louisiana, which local politicians and business boosters estimated at between 10,000 to over 22,000, never materialized. Mere months after the moratorium ended, economists who had predicted sharp job losses in the oil patch suddenly reversed themselves. Big Oil seemed loathe to let go of skilled workers.
Here’s a graph showing unemployment in the Houma region — ground zero in the economic carnage that board room Cassandras were wailing and warning about:
|Employment in the Houma area, as tracked by the Federal Reserve, is a key indicator of activity on offshore oil platforms in the three years since the BP spill.|
As for the rigs running off to less regulated waters: In the 15 months after the moratorium began, only eight of 30 deepwater Gulf rigs actually departed from the region.
Local blogger Clay, who authors the Noladishu site, inspected the circumstances of the eight drillships that left. He found that:
3 were new, 5 were more than 24 years old, and some were more than 30 years old. 20 years is generally a good lifetime for a rig; 30 is sometimes done if prices are favorable and there’s been good maintenance and 10-year overhauls. The new rigs will hurt (the 3 that left were among the best in their respective fleets), but the others were so long in the tooth, you’d almost say good riddance.
So, contrary to the hysteria, most of the deepwater rigs stayed throughout the moratorium. And of those that left for foreign waters, most were well on their way to becoming unsafe rust buckets that would not pass the new safety standards anyway. Instead, they will spend their final years in places like Angola and Egypt, where worker and environmental safety are not quite at the top of the priority list.
Meanwhile, the local offshore rig count has soared past pre-oil spill levels and the Gulf is ”on the verge of its biggest supply surge ever.” Ever! The upswing will continue full-throttle, too, as analysts expect the number of rigs to double by 2017.
In short, the “Obamatorium” has not led to economic calamity in Louisiana or anywhere else. Instead we are on the verge of a huge energy-producing bonanza. As the Wall Street Journal recently reported, “Since the moratorium imposed on deep-water drilling in the U.S. in May 2010 was lifted in October of that year, offshore exploration and drilling in the Gulf of Mexico has continued uninterrupted and taken on new momentum.”
It’s not all offshore, either. Inland, hydraulic “fracking” has unlocked vast natural gas reserves that will power massive new (energy-intensive) petro- and agro-chemical plants in the corridor between New Orleans and Baton Rouge.
Thus, the port of New Orleans, where Obama spoke Nov. 8, is the crossroads where a huge offshore drilling boom intersects an industrial boom powered by gas. Not too shabby. Hydrocarbons will flow through our pipelines and petrochemical goods through our ports.
The immense economic significance of the boom isn’t widely appreciated, though. It appears that the real jobs question in South Louisiana isn’t a matter of moratorium-induced scarcity or energy-boom abundance. Our problem isn’t “survival;” it’s ensuring that the average Louisianian benefits from this once-in-a-generation coincidence of industrial and energy booms.
CityBusiness recently reported that industrial construction companies are predicting huge shortages of skilled labor. Delgado Community College, despite funding shortages, is rushing to ramp up workforce training programs geared toward boomtime industries.
Along with the good news, Delgado Chancellor Monty Sullivan offers a warning: “The growth of our regional economy has sneaked up on us a bit. … Our resources are limited and we need to continue creating a blend of traditional curriculum and developing programs required by industry.” The Advocate recently reported that there likely won’t be enough local offshore service and supply vessels to keep pace with demands of the offshore boom.
Louisiana politicians such as Jindal, U.S. Sen. David Vitter and U.S. Rep. Steve Scalise all complained relentlessly about the moratorium. But when the sky didn’t fall, they received no political comeuppance. Perhaps that’s because, as author John Barry pointed out, the Texaco flag flies over our state capitol.
Now, it seems many of us — certainly including our doomsaying politicians — might be caught flat-footed by the sudden energy and industrial booms. It’s enough to make you wonder if obsessively badmouthing the moratorium blinded our leaders to the imminent reality of a trillion-dollar energy boom. Did the grandstanding and hysteria over the “Obamatorium” in 2010 and 2011 hinder Louisiana from comprehending — and taking full advantage of — the nascent energy boom that has followed?
The bottom line, as always, is jobs. If, say, out-of-state workers snap up the good jobs provided by the boom… well, that will be real devastation for the Louisiana workforce. Our local leaders prepped us well for a moratorium disaster that never occurred. Perhaps their time would have been better spent preparing us for an energy boom that was never going to be derailed by a deepwater drilling timeout. Our pols took full advantage of the moratorium to gin up anti-Obama talking points. Will they put the same energy into ensuring that the average Louisianan doesn’t miss out on the boom they didn’t see coming?
This time they won’t have Obama to blame.
Mark Moseley is The Lens’ opinion writer and engagement specialist. He writes The Lens’ daily news roundup. In 2004 he stopped yelling at his TV and began a New Orleans blog called Your Right Hand Thief. After Katrina and the Federal Flood he helped create the Rising Tide conference, which grew into an annual social media event dedicated to the future of New Orleans. He can be reached at (504) 481-5407.
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