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Thread: Drilling in the Gulf

  1. #1
    Senior Member Buzz's Avatar
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    Default Drilling in the Gulf

    I'm posting this to see if Franco has any comments...

    http://wallstcheatsheet.com/trading/...ting-jobs.html

    Are Gulf Drilling Companies Creating Jobs

    Lori Ann LaRocco conducts the following interview:

    There is an interesting fact that many may not know, there are more rigs in the Gulf of Mexico now than there were before the Deep Water Horizon accident.
    At the date of the explosion there were 115 rigs in the Gulf. This includes all three types of offshore rigs: Jack Ups, Semi-submersibles and Drill Ships. Out of the 115 rigs, 68 were working and 47 were not.

    Fast forward to February 3, 2011, there are 125 rigs in the Gulf. Thirty-four are working and 91 are not. What’s interesting with the research is we have seen an increase of two drill ships.

    At the time of the explosion, there were nine drill ships, eight were working, one was not. Now there are 11 drill ships in the Gulf. Three working, eight are not.
    Now mind you the number of rigs not working has increased, but these rig workers are still being employed. Sources tell me companies are confident they will be able to drill in the Gulf in the near future so they still have their employees on the payroll.

    I decided to speak with Moody’s (NYSE:MCO) Analytics Economist Chris Lafakis. Lafakis is no ordinary economist. He specializes in energy and has been following these trends. I asked him to break down what he is seeing both on the oil, natural gas and alternative energy front.
    He also gave me his estimate of how many people are really working in off-shore drilling in the US: not more than 12,500.

    LL: The fact there are more rigs in the Gulf than before the disaster, what does that tell you about the confidence in the oil industry?

    CL: This tells me that industry believes 2011 will be the year in which permitting recovers from Deepwater Horizon. If oil drillers did not believe that the administration would normalize its process of awarding permits to new drillers, there would be far fewer rigs in the Gulf of Mexico today, and rigs that are primarily used for deepwater drilling would not be on contract for the rest of the year.

    LL: The unofficial moratorium has been an emotional topic for those who are in the industry. Based on your extensive research, just how many jobs does Gulf drilling create?

    CL: There are 50,000 employees in the entire natural resources and mining industry in Louisiana. About 10 percent are not related to oil or gas extraction, and my sense is that 75 percent or more of the oil and gas extraction jobs are related to onshore activities as opposed to offshore activities.
    Of the 175 active drilling rigs in LA, only 24 are offshore, and there are only three offshore rigs in Texas. It is certainly true that more employees are employed per rig in offshore than onshore, but my sense is that offshore drilling in the Gulf doesn’t directly employ more than 12,500 workers. Also, keep in mind that the moratorium only applied to deep water drilling, and that there are 10 more rigs in the Gulf now than there were prior to Deepwater Horizon.

    LL: Does this number employed include the ripple effect jobs that service the rigs (like food services for example)? If not, can you quantify that?

    CL: No, it does not. Economists typically account for the ripple effect jobs by using employment multipliers.
    It is true that the average oil driller is well-paid; thus, the employment multiplier is higher than for most industries. If we use a high multiple of 4 and a high estimate of 12,500 workers, the number of auxiliary jobs supported would be 50,000.
    Under that scenario, the number of jobs both directly and indirectly supported by the offshore industry would be 62,500, or roughly 3.3 percent of total employment in Louisiana and 0.05 percent of total employment in the U.S.

    LL: The Obama Administration has been a champion for green jobs and they have used numbers to back up their position of why the nation should go green. Have you been able to come up with those numbers? Do you have any hard numbers?

    CL: The biggest challenge with respect to clean energy is distinguishing from a clean energy economy job and a regular one. The government has taken a stab at classifying a “green” job using two methods, one is aggressive and the other is more conservative. According to their research, green products and services is about 1 to 2 percent of our total private business economy in 2007 which translated into about 1.8 to 2.4 million jobs.
    PEW completed an alternative study that used an even more conservative criterion for measuring jobs in the clean energy economy. They found that employment in the clean energy economy accounted for 0.5 percent of total U.S. employment in 2007. The study also revealed that clean energy economy jobs have grown more than 2.5 times faster than regular jobs in the U.S. economy since 1998.

    Lori Ann LoRocco is a Senior Talent Producer at CNBC, and author of “Thriving in the New Economy:Lessons from Today’s Top Business Minds.”
    "For everyone to whom much is given, of him shall much be required." -- Luke 12:48

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  2. #2
    Senior Member Franco's Avatar
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    A lot to comment on here Buzz so it might take me a few post since I am trying to get out of the office for the weekend and I need to pick up some ammo for the a conservation goose hunt in the morning.

    I'll start with deep water drilling. There has been zero activity since last Spring in drilling new deepwater wells. Much of it has to to with the new regs. They seen to have been written by a committee that has never drilled for oil. Oil companies can't get clarification on the new regs so they are hesitant to drill since the new regs encompass both deep and shallow water rigs.

    For instance, in the new regs all offshore workers are required to wear fire suits. No one has been able to figure out how to put a roustabout or roughneck in a full-bodied firesuit working in 95 degree Summer heat. That's just one of the hold ups.

    No new drilling in deep water has begun because of the new regs and the fact that permits are still being held up.

    more to come......
    It's time we abandon our party affiliations and rather than being good Dems or good Repubs we all become good Americans. MJH345

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    Senior Member Franco's Avatar
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    Oil production is the reason the standard of living has been so high. The brains for drilling are located in Lafayette, the brawn from just south of here in New Iberia. Then you have the oil refineries along the Miss River from New Orleans to Baton Rouge. When one suffers, they all suffer and when drilling is being held up for no apparent good reason, it pisses people off!

    Understand that unemployment even in the worst of times was never higher than 5%. We didn't feel the recession that hit most of the country in 08-09. We still had 25 year old kids making 90K a year working offshore.

    However, oil is tied into everything around here. Lafayette has become the medical hub of La. because of the money here. We have more doctors here than either Baton Rouge or New Orleans. We have more Plastic Surgeons on one street than the rest of the entire state! There are over 600 restaurants for a population of 400,000 and one still has to wait to get a table. The biggest news last night on the loacl news was of a high school girl that got her BMW SUV stuck in a ditch and blocked taffic for a hour! Life is good because of oil.

    If the current administration ever gets thier energy policy in order, we can put a lot more people to work. Oil companies just don't trust the current administration as they are constantly adding new regs making it even more costly to drill as well as more confusing. Of course those new cost will be passed on to the consumer.

    Develope green energy and if the day ever comes where it can replace oil consumption, great!
    But, any hopes for green energy is still light years away. So, to look down one's nose at the oil industry as the curret administration does or to think that we can ween ourselves off of oil anytime soon is folley.
    Last edited by Franco; 02-11-2011 at 03:20 PM.
    It's time we abandon our party affiliations and rather than being good Dems or good Repubs we all become good Americans. MJH345

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    Senior Member Franco's Avatar
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    Oh and one last thing, those job estimates are way off!

    When you are talking about oil production you have to take into account all the support business. There are over 40,000 people alone employed by fabricators. Estimates quoted in your article do not take into account the ship buiding industry required to support the oil industry. Petroleum Helicopter alone has over 2,000 on thier payroll. One casing crew company, Frank's, has over 10,000 employees. That just two businesses of several hundred that are either HQ'd here or have offices here. Haliburton, Knight, Dii, Weatherford and the list goes on and on! I would say there are well over 500,000 people alone in S La. that make thier living from oil production.

    P S

    It is also why it cost so much to get a good duck lease around here. Half a section of land (320 acres) went for $86,500 per year, 10 year lease near White Lake! That's why I now goose hunt.
    Last edited by Franco; 02-11-2011 at 03:43 PM.
    It's time we abandon our party affiliations and rather than being good Dems or good Repubs we all become good Americans. MJH345

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    Senior Member menmon's Avatar
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    LA is just fine, as is Houston. LA has nothing to whine about, unlike MI, CA, FL, etc. So a few coonasses drew unemployment during duck season. I'm sure they were happy not mad. Oil has always been cyclical and so assume they are working less now, they will do more later.

    I banked the egineering company that fixed the leak until they sold to Oil States shortly after the incident, and they have people going out there all the time fixing leaks, some pretty bad. The bright side of all this is that it has rasied the bar for saftey and environmental concern. That is good for everybody and it makes more jobs, and at $90 a barrell they can afford to go the extra mile.

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    Senior Member BonMallari's Avatar
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    Quote Originally Posted by Franco View Post

    It is also why it cost so much to get a good duck lease around here. Half a section of land (320 acres) went for $86,500 per year, 10 year lease near White Lake! That's why I now goose hunt.

    Ouch, that's more than a membership at Augusta National GC or the equivalent of Kippy Swingle's annual FT budget excluding canine purchases...
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    Senior Member Franco's Avatar
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    Quote Originally Posted by BonMallari View Post
    Ouch, that's more than a membership at Augusta National GC or the equivalent of Kippy Swingle's annual FT budget excluding canine purchases...

    And, he is only putting two blinds on the place for his two sons.

    I made the mistake my first year in southwest La. of getting into a duck club that leased one section of land, 640 acres and they have 20 blinds in that one section!!! Twenty members each paying $3,000 to cover the 60k annual lease cost!
    It's time we abandon our party affiliations and rather than being good Dems or good Repubs we all become good Americans. MJH345

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    Quote Originally Posted by Franco View Post
    And, he is only putting two blinds on the place for his two sons.

    I made the mistake my first year in southwest La. of getting into a duck club that leased one section of land, 640 acres and they have 20 blinds in that one section!!! Twenty members each paying $3,000 to cover the 60k annual lease cost!
    Damn! I thought Stuttgart was stupid expensive....

  9. #9
    Senior Member Franco's Avatar
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    Quote Originally Posted by sambo View Post
    LA is just fine, as is Houston. LA has nothing to whine about, unlike MI, CA, FL, etc. So a few coonasses drew unemployment during duck season. I'm sure they were happy not mad. Oil has always been cyclical and so assume they are working less now, they will do more later.

    I banked the egineering company that fixed the leak until they sold to Oil States shortly after the incident, and they have people going out there all the time fixing leaks, some pretty bad. The bright side of all this is that it has rasied the bar for saftey and environmental concern. That is good for everybody and it makes more jobs, and at $90 a barrell they can afford to go the extra mile.
    If you call someone from around here a Coonass, you better be able to protect youself!

    It is considered a derogetory slurr.

    Most of those layed off were to proud to accept unempolyment, they were recruited by ARAMCO and are working in Saudi Arabia.

    But then again, you do like to try and talk down to people on this forum! It makes little people feel big.
    Last edited by Franco; 02-11-2011 at 06:56 PM.
    It's time we abandon our party affiliations and rather than being good Dems or good Repubs we all become good Americans. MJH345

  10. #10
    Senior Member dnf777's Avatar
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    Quote Originally Posted by Franco View Post
    If you call someone from around here a Coonass, you better be able to protect youself!

    It is considered a derogetory slurr.

    Most of those layed off were to proud to accept unempolyment, they were recruited by ARAMCO and are working in Saudi Arabia.

    But then again, you do like to try and talk down to people on this forum! It makes little people feel big.
    I thought this was hashed out a while ago, and the consensus was people were PROUD to be a coon-ass!?

    My son is one, but he's not old enough to make up his mind yet.
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