If you’ve spent any time on the Gulf Coast over the past few months, it should come as no surprise the people are upset over the BP oil spill. They have every reason to be. Their shorelines, marshlands, waters and ways of life have been stained for generations to come by the ruptured wellhead of the Deepwater Horizon. The consequences of this year’s biggest catastrophe will be with the region and the country for a considerable time, but it’s not the only man-made catastrophe that should give us reason for concern.
The other man-made disaster as many in the Gulf Coast would call it was the Obama Administration’s moratorium on deep-water drilling. Wanting to be as proactive and cautious as possible in the wake of the ruptured wellhead, the Obama Administration imposed a ban on any new deep water drilling. With more than reasonable concerns in wanting to take a good look at what was happening, especially after all of the uncovered coziness and mischief of the Interior Department’s Minerals Management Service, the Administration effectively called a big “TIME OUT!” to find out what was really going on.
That may seem to make a lot of sense, given no one knew if there were other ticking time bombs like the Deepwater Horizon in the Gulf. Unfortunately, that highly prescriptive action by the Obama Administration unleashed a set of economic dominoes that many people I spoke with during my recent visit to the Gulf thought caused more economic damage than the oil spill itself.
As my friend George Swift, the President and CEO of the Southwest Louisiana Partnership for Economic Development (SWLA Partnership), shared with me in late August, “You don’t shut down the whole airline industry because one plane crashes.” It was his belief, as it was with many others in the region, that the Obama Administration’s moratorium was doing just that – shutting down an important regional industry because of one accident.
His frustration and that of others I spoke with was deeply felt because oil workers that would otherwise be out on rigs in the Gulf getting ready to drill for oil ended up unemployed for months on end because their jobs had been taken away from them. These weren’t just minimum wage jobs either. These were highly paid, highly skilled workers whose jobs, like that of the region’s fishermen, are central to the Gulf Coast economy. Taking those jobs away in the midst of the oil spill only made a tough economic situation even more painful, especially when other jobs (e.g., support service industries) would also be forced to lay people off in response to no demand for their services.
Despite very public, urgent and bi-partisan pleas from Gulf Coast leaders, such as Louisiana Governor Bobby Jindal (R), Mississippi Governor Haley Barbour (R) and Louisiana Senator Mary Landrieu (D), the Obama Administration essentially turned a deaf ear and blind eye to the situation. That is until yesterday, October 12, 2010, when the moratorium was lifted.
That was the day this lingering economic disaster ended and recovery operations started. But don’t expect any Disaster Recovery Centers with FEMA and SBA workers to be showing up to fix things. This type of disaster, with all of its economic dominoes strewn all about, is going to take a while to get set back up in working order.
In an industry as big and powerful as the oil industry, drilling equipment and personnel cannot afford to be sitting idle. If people and equipment are not being used for their intended assignments, they are directed to go elsewhere, where they are allowed to operate. That is essentially what has happened. New drilling projects along coastal Africa and Latin America have replaced those planned for the United States because those projects were prohibited until the moratorium was lifted.
This situation is the ultimate of market economics crashing into political realities. Real people, whose jobs and livelihoods have been on the line, have become the unlikely pawns in a very expensive and costly chess match. While I am not particularly sympathetic to the oil industry, given their rather careless disregard for safe operating procedures (as the current investigation has begun to reveal), when you are a multi-billion dollar enterprise and there is existing demand for your product and work to be done, it’s hard not to blame them for moving on.
That may be cold, cut throat and callous, but the last time I checked, that was what market economies were all about. Hence the shortsighted actions by the Obama Administration. What may have made political sense at the time (i.e., being seen as tough on the big, bad oil industry and showing how responsive you could be to the BP mess) has had a very real and very painful consequence to the regional and family economics of the coast.
There is no denying the Administration had to do something to check on the safety of on-going drilling operations, but get-tough tactics usually end up being toughest on the people stuck in the middle. Unfortunately, that is where a lot of the residents of the Gulf Coast have been of late, and it’s something that seems to have been forgotten time and again.
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