Thursday, April 17, 2014

Economic Survival Accomplished

Better than ever.  Happy days.
New environmental regulations have slowed the pace of drilling permits and overall Gulf oil production remain below 2010 levels. But as the fourth anniversary of the BP spill approaches Sunday, LLOG Exploration is among dozens of companies planning major investments, and oil and gas activity in the region is projected to return -- and in come cases exceed -- levels seen before the spill.

"Regulations have gotten tighter but the Gulf is still a good place for companies to be," said Nimmi Henderson, an analyst with research firm Wood Mackenzie. She said companies are adjusting to the "new normal" of working in the Gulf, not leaving as some had predicted during the 2010 moratorium.

LLOG Exploration is among dozens of companies now planning major investments as oil and gas activity in the Gulf returns to -- and in come cases exceeds -- levels seen before the BP oil spill.
It isn't too long ago that outraged oil reps and Louisiana pols were organizing an insurrection against President Obama's moratorium on new oil leases which they were certain was about to become the Khmer Rouge of "job killing."
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 and forecast job gains. Big Oil seemed loathe to let go of skilled workers.
It turns out that Obama's six month "job-killing" moratorium on drilling in the wake of the Macondo blowout didn't actually kill any drilling jobs. Unlike the coastal marshes it has sliced through over the years, the oil and gas industry is pretty firmly rooted in Louisiana.

Of course, the moratorium didn't do much to improve drilling safety either as a disappointed former regulator explains this week in a New York Times op-ed
We would never have imagined so little action would be taken to prevent something like this from happening again. But, four years later, the Obama administration still has not taken key steps recommended by its experts and experts it commissioned to increase drilling safety. As a result, we are on a course to repeat our mistakes. Making matters worse, the administration proposes to expand offshore drilling in the Atlantic and allow seismic activities harmful to ocean life in the search for new oil reserves.
Oh well. Economic Survival Accomplished, though, right?

The disaster is over. Everyone is back at work.  The fisheries are maybe not doing so great but a robust seafood marketing campaign has spurred an economic renaissance of sorts in its own right.
A multi-million dollar media campaign to tout Louisiana's seafood after the BP oil spill in 2010 was plagued by a lack of oversight that led to mismanagement of money, questionable spending on alcohol and limousines and the potential looting of thousands of dollars in promotional merchandise from the New Orleans Saints, according to a report by the Legislative Auditor's office.

BP, the Louisiana Department of Wildlife and Fisheries and the office of the lieutenant governor entered into an agreement to design and implement programs to mitigate the negative effect on the state's tourism and seafood industries after the Deepwater Horizon rig explosion on April 20, 2010.

The Louisiana Seafood Promotion and Marketing Board would develop and implement these programs with $30 million in BP funds.

The state hired Gregory C. Rigamer & Associates to provide strategic planning for a $15 million marketing campaign. The Department of Wildlife and Fisheries received $12.4 million for administrative fees and support with the final $2.6 million going to campaign-related expenses.

As of June 30, nearly $17 million of those funds have been spent with the majority, $11.7 million going towards advertising and market research.
Talk about converting lemons to lemonade.... or, I guess, in this case, sweet crude to iced tea. Whatever it is, rest assured NEW ORLEANS WILL turn disaster into profit.. for some people anyway.

Better still, soon there will be a brand new city office dedicated solely to the telling of these sorts of success stories. Last week the city of New Orleans posted an opening for the position of "Chief Resilience Officer." Among the Resilience Officer's responsibilities will be "driving the conversation about resilience." It's hard to come up with a better conversation starter than a story about resiliently parlaying a poisoned Gulf into booze, limos, and Saints swag.  The new CRO should probably lead with that.

But until Mayor Landrieu fills this post, we'll have to rely on his sister to tell our oil and gas resilience stories for us. She's certainly trying to.  If she survives yet another tough reelection campaign, she might even be around long enough to tell talk resilience after the next disaster which could be arriving any time now. Maybe it will come from the Gulf where the industry is still fighting any suggestion of better safety standards.

Or maybe it will happen in heavily conservative St. Tammany Parish where the fracking boom has finally reached the doorsteps of some of its most ardent proponents.  Turns out they don't like that.
Rick Franzo of Lacombe, who is president of the Concerned Citizens of St. Tammany, said he understood that the parish would receive about $2.8 million a year in revenue if the well were successful. He questioned the value of that money compared to the risks involved.

"I'm a conservative. I'm a Republican," he said. "But I have a problem when I look at the return on investment versus the liability. One accident . . . and you're talking about a disaster in St. Tammany Parish."
Mandeville might need to look into hiring a Reslience Officer too.

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