No concern about the availability of natural gas — what gives?
“On a less positive note, contacts in the energy industry said the moratorium on deepwater drilling resulted in significant regional layoffs, although energy service companies were shifting Gulf Coast workers to land or shallow water projects when possible.”
- The Beige Book, July 28, 2010,
The Federal Reserve Board – Dallas District
Indeed. For the week ended April 16th, i.e., the week prior to Deepwater Horizon, the Baker Hughes offshore rig count stood at a 61-week high, 56. The bulk of these rigs, 47, were located off the coast of Louisiana. However, with the U.S.’ boot firmly planted on the neck of the industry, the rig count has since fallen off of the proverbial cliff.
As of last Friday, the offshore count was 20 or less than a quarter of the 10-year average. Whereas the onshore rig count has increased by 14% since Deepwater Horizon, the offshore count has plunged by 64%.
Louisiana currently enjoys an unemployment rate that is 230 bps below the national average… but how long will that last? Net rig counts in Louisiana are down by 14% since April. Meanwhile, last Monday Dow Jones ran a story that recently released documents from the Justice Department (as part of ongoing litigation in New Orleans over the moratorium), U.S. officials estimated that nearly 9,500 jobs in the oil and gas industry and more than 13,500 jobs in ancillary industries would be lost as a result of the ban on deepwater drilling.
