Paula Dittrick
OGJ Senior Staff Writer
HOUSTON, July 8 -- The International Association of Drilling Contractors (IADC) urged its members to convince their employees and business suppliers to tell the White House and federal lawmakers that the deepwater drilling moratorium will have severe, negative economic consequences.
“The small businesses that hold the big players together can’t afford 6 months of no revenue,” said IADC Chairman Louis Raspino, who is chief executive officer and president of Pride International Inc. “In a very short period of time, we’re going to see this industry implode. That’s the message we’re bringing to Washington.”
He and others spoke to about 300 people gathered in West Houston for an IADC town hall meeting on July 7, the day before a 5th US Circuit Court of Appeals hearing in New Orleans regarding an injunction against the 6-month moratorium, which bans any new deepwater drilling in the Gulf of Mexico.
On June 22, US District Judge Martin Feldman of New Orleans issued a temporary injunction blocking the drilling moratorium in the gulf. The federal government is appealing that ruling. Hornbeck Offshore and other service and supply companies requested that injunction.
US Interior Sec. Kenneth Salazar imposed the 6-month moratorium following the Apr. 20 Macondo well blowout resulted in an explosion and fire on the Transocean Ltd.’s Deepwater Horizon semisubmersible, killing 11 people and resulting in an ongoing oil spill.
As the court battles continue, Salazar has said he plans to issue a revised moratorium.
Rep. Kevin Brady (R-The Woodlands) and Rep. Pete Olson (R-Sugarland) each spoke at the IADC meeting, saying the government was using the moratorium as well as federal permitting processes in order to slow new drilling, both onshore and offshore.
“The energy industry has been demonized for years,” Brady said. “It’s not just because people don’t understand it, it’s because there’s no political price for damaging your industry. They don’t see energy workers. They just see energy executives. So, they feel free to undercut the 2 million workers in this industry because they don’t think they have any energy workers in their districts,” he said of some federal lawmakers.
Olson has introduced a bill in the US House of Representatives to rescind the deepwater moratorium. He said the moratorium will do nothing to make deepwater drilling safer, but the moratorium threatens to harm the US economy.
“The administration’s goal is to make offshore drilling as small as possible,” Olson said. When he asked town hall participants if they or their associates had been affected by layoffs or planned layoffs as a result of the moratorium, about 70% of the people raised their hands.
Tom E. Williams, managing director of Nautilus International LLC, said he worked as technical expert on a team of scientists advising the federal government. Williams said he believed the group’s work was misused to support the moratorium when that was not what the group had recommended.
“The moratorium will reduce safety instead of improve safety,” Williams said. “I believe the only solution is to put political pressure on the White House.” He also called the moratorium “an arbitrary decision made by a politician.”
During a question and answer session, several meeting participants questioned what might happen with industry’s environmental performance and safety performance if the US found itself relying more on imported oil. They noted the US has higher environmental and safety regulations than other oil-producing countries.
Richard Haut, a senior research scientist with the Houston Advanced Research Center, suggested that environmental and safety risks could increase. Haut said a continuing moratorium means deepwater rigs and their crews will go work outside the US, possibly leaving the US without “top-quality” crews. Others agreed, saying more imported oil means more tankers coming into the US.
“You have to look at the next 6 months as an unknown,” said John Ryan, president of Alexander/Ryan Marine & Safety Co. of Houston, which provides inspections, repairs, and certification services for various equipment. “We’ve got field service people that won’t have jobs to go out on.”
Contact Paula Dittrick at [email protected].
File photo from PDVSA..
