NEW ORLEANS — Many small regional businesses
along the Gulf Coast have largely weathered last year's moratorium on
deepwater drilling but could fail if the pace of such drilling doesn't
pick up soon, according to a new economic impact study by a non-profit
group that studies economic trends.
The report, released late last week by Greater
New Orleans Inc., says businesses that directly and indirectly cater to
offshore drilling rigs — from equipment suppliers to diners — outlasted
last year's six-month moratorium by tapping a $20 billion compensation
fund created by BP, the oil company responsible for the massive spill
that fouled the Gulf of Mexico.
As that money dries up and the pace of permitting for deepwater
drilling remains slow, those companies may soon collapse, it says.
"If we don't get some certainty around
regulations, we can begin to hit that wall and see that real steep
increase in unemployment," said Michael Hecht, the group's president and
chief executive officer.
The Deepwater Horizon rig exploded and sank off the coast of Louisiana in April, killing 11 crewmembers and unleashing the greatest offshore oil spill in U.S. history.
The Obama administration in May issued a
six-month moratorium on deepwater drilling after the BP oil disaster.
The moratorium shut 33 deepwater rigs, affecting more than 13,000
workers, the report says.
Although the moratorium ended in October, only
two deepwater permits have been issued since then, compared with 5.8 per
month issued before the spill, the report says.
If the pace of permitting doesn't pick up, more
businesses will suffer and the number of unemployed will increase within
six months, Hecht said. Businesses used several tactics to survive the
moratorium and retain employees, including restructuring business plans,
selling equipment, digging into savings and cutting salaries, the
report said. They also benefited from the BP compensation fund, Hecht
said.
"But that's ending," he said. "That false economy is going to go away."
Deepwater drilling contributes about $2.3 million
to $3.2 million in direct tax revenue to state and parish governments
each month and more than $7 million in indirect monthly revenue to state
and local governments, the report says.
The report found no direct link between the
25,000 jobs Louisiana lost since June and the moratorium. At Port
Fourchon in southern Louisiana, however, crane operators and other
companies that serve the offshore drilling industry have been
extraordinarily quiet lately, port director Chett Chiasson said. More
than 20 workers recently were laid off from their jobs at companies at
the port, he said.
By Rick Jervis, USA TODAY
