Exclusive Interview: What Permitorium Statistics Don’t Show
Laborde Marine owner reveals uncounted devastation with shut-down of rig operations in Gulf
NEW ORLEANS, La. – In early April of 2010, Cliffe Laborde and his brother Peter were at ease. In three years they’d invested $150 million in crew boat and supply vessels, tailored to American oil drilling, and President Barrack Obama had just announced that new areas of American ocean were set for drilling exploration.
The Deepwater Horizon oil spill, however, put an abrupt and prolonged end to that optimism, and in such a way that escapes calculation.
On the anniversary of the spill, last week, outlets such as the Wall Street Journal downplayed the economic impact. Apparently, 13 percent more unemployed Louisianians than this time last year, against the national trend, wasn’t enough evidence. So Laborde (pictured left) met with The Pelican Post to share how individuals in his situation remain devastated. (Click here to download and below to listen – 17 minutes.)[audio:http://bit.ly/hhD7F0]
“It’s resulted in a lot of sleepless nights,” says Laborde. “We thought we were pretty smart… [Now] it’s hard to pay back the loans associated with those investments if the boats aren’t working.” Less than one third of the Gulf of Mexico deepwater rigs are back running, and given the relative abundance of supply vessels, Laborde Marine’s service rates have fallen to less than half their prior levels.
Despite the financial bind, Laborde Marine has retained its approximately 200 employees. These people won’t show up in the already poor unemployment numbers, but that doesn’t mean they have sufficient work to do.
“Our people are well trained; they know this equipment… You just can’t fire your good people on a whim and hope that they’ll be available when you need them again,” Laborde says.
Laborde Marine’s owners also remain uncertain as to whether BP’s Gulf Coast Claims Facility will compensate them for even part of their lost earnings. Currently, the Facility does not recognize the Laborde Marine claim, and they are entering into a legal battle. The widely echoed $20 billion compensation – still less than $4 billion of which has been spent – is yet to help this business.
While the Obama Administration announced an end to the drilling moratorium in October of 2010, the Interior Department has only approved ten deepwater permits since then. That compares to a rate of six per month in the year prior to the spill. To rub salt into the wound, President Obama has made misleading statements and concealed the industry’s bottlenecked inactivity.
Laborde says this unofficial permitorium, without a timeframe, has created an unpredictable process. And the suspension of lease sales until 2012 means the long-run outlook is just as grim.
While Laborde would like to take up international contracts, and he is looking into it, he says that is easier said than done. To move one of the supply vessels to Africa or Brazil, for example, would cost $1 million each way. His company also paid a higher cost to make these vessels in the United States, to comply with all domestic regulations (specifically the Jones Act). They would then be at a competitive disadvantage in offshore markets.
Despite the economic expense, organizations such as Oceana and the Gulf Restoration Network have supported the restrained permitting process. In fact, Oceana would like to see all drilling operations halted. They express sympathy for victims, but their preference is for retraining of and compensation for harmed parties, to coincide with heightened regulatory barriers.
Laborde responds that “this has been an over-reaction to an isolated incident… No one in this industry wants that kind of accident to happen again.” Most importantly, he notes that the BP tragedy demonstrates the immense disincentive energy companies already face against environmental damage – and that is with the existing regulatory scheme.
Fergus Hodgson is the capitol bureau reporter with the Pelican Institute for Public Policy and editor of The Pelican Post. He can be contacted at firstname.lastname@example.org, and one can follow him on twitter.