Louisiana's recovery might be brought to its knees
There can be no one left in Louisiana who has not heard about the Deepwater Horizon disaster and the oil spill that has resulted from the collapse of the rig, which killed eleven people in the process and is now threatening the livelihoods of countless communities along the state’s coast.
The oil spill, which is larger in total area than the whole of Scotland and in a worst case scenario could coat the entire Gulf Coast from Louisiana to Florida in oil, is the worst in the history of the United States and has already caused the deaths of hundreds of animals, the destruction of countless fragile ecosystems and has even begun to chip away at the ‘special relationship’ between the United States and Great Britain.
But there now appears to be a secondary disaster looming for Louisiana, a ‘man-made disaster’ as Governor Jindall calls it, a disaster that could undermine the economy of Louisiana for decades to come if analysts’ doomsday predictions prove to be reliable.
In June of 2010, several weeks after the oil spill first began to threaten the coasts of Louisiana, Florida and even Alabama, and after containment and clean-up efforts had begun to prove immensely challenging, Louisiana news media reported that President Obama had signed a moratorium that would halt, for the next six months, all exploratory offshore drilling for oil.
The news is a massive blow to a state already reeling from the effects of a massive global downturn, coupled with the impact of the oil spill, which has decimated tourism along the coast and impacted all related industries. Now, this latest development has the potential to bring the state’s economic recovery to its knees.
Governor Jindall was so agitated by the prospect that he called the federal government’s decision a “man-made disaster” adding that “our bottom line is that we absolutely want drilling to be done safely, but it shouldn't take months of federal government committees and meetings.”
The governor has a point. Louisiana is rich in offshore oil reserves and the industry contributes over $10 billion to the state’s GDP, Louisiana is the offshore drilling hub of the nation with 80% of all offshore rigs operating in US waters located in Louisiana, this means that the state provides the country with more than a quarter of its oil needs.
The industry is massive, employing around 50,000 people directly and a further 200,000 in related industries. The moratorium has thus far effected only 33 deepwater oil drilling rigs, but the knock-on effects could be severe, the Louisiana Economic Development department has warned that 3000 to 6000 jobs could be lost in the next three weeks, with a further 10,000 in the next few months.
With the moratorium in place, oil companies will leave Louisiana en-mass in search of more lucrative markets, they’ll take their oil rigs and offshore drilling platforms with them, and because of high demand in the industry it could take up to 6 years to replace those that leave the state, adding a further complication to Louisiana’s already dire situation.
Exploratory offshore drilling is the life-blood of the industry, in Louisiana and the around the world, new oil reserves need to be found, tapped and exploited in order to keep the industry turning over, the moratorium will therefore certainly be a severe blow to the state while the knock-on effects can as yet only be speculated on.
The moratorium is a reflection of a difficult position on the part of the government, under fire from many quarters for not doing enough to contain the spill and put pressure on BP, it is now under attack from the government of Britain, which says it is putting too much pressure on BP and using “anti-British” rhetoric (such as by calling BP ‘British Petroleum’, a name it abandoned in 1998).
At the same time, the government has been accused of playing a part in destroying the pensions of millions in the UK by putting BP under undue pressure, while in the US, many still feel that the government is not doing enough to address the oil spill and its causes.
The moratorium is part of an investigation into the safety and virtue of offshore drilling in the Gulf of Mexico. Much of Louisiana’s coastline, its beautiful beaches, lush marshlands, sensitive and endangered ecosystems and tourist hotspots, have been coated in oil, damaged perhaps beyond repair.
Yet despite this, Louisiana residents, by and large, recognize the importance of the oil industry to the state, it cannot be done away with anymore than Saudi Arabia can do away with their oil industry. Someone needs to pay, the blame must fall somewhere, and changes need to be made, it’s just unfortunate that Louisiana will have to suffer through all of it.
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Louisiana's recovery might be brought to its knees
The six-month moratorium suspending all exploratory oil drilling in the Gulf of Mexico is another blow to an economy already reeling and could potentially undermine the state for years to come.
There can be no one left in Louisiana who has not heard about the Deepwater Horizon disaster and the oil spill that has resulted from the collapse of the rig, which killed eleven people in the process and is now threatening the livelihoods of countless communities along the state’s coast. Read more
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