Mike Stagg, the Lafayette-based IT consultant, political activist, and previous candidate for Louisiana Governor and United States Congress, wrote a tremendously interesting letter about the fear-mongering promoted by many elected officials, industry spokespersons, and lobbyists during the aftermath of the federal moratorium against deepwater off-shore drilling, which, fortunately, was published yesterday by The Advocate. Stagg did his homework. Quoting:

The signs of the hoax can be found in the lawsuit filed to overturn the moratorium a month after it was declared.

When 37 companies joined Hornbeck International in the suit against the moratorium, it looked like an industrywide revolt against the moratorium.

The reality was that those 37 companies were owned or controlled by two prominent Louisiana Republicans, Boysie Bollinger and Gary Chouest. Bollinger controlled 21 of the companies, Chouest 16.

So, when they say 37 companies, they’re actually referring to companies “owned or controlled” by only two wealthy and well-known Republicans, both of whom have donated significant amounts of money to Governor Jindal. More from Mike Stagg:

On page four of that June 20 brief, in his “Statement of the Case” Caldwell declared: “Because of the moratorium, many thousands of Louisiana workers have lost their employment and many more are at risk of losing it in the near future.”

The only problem with the statement is that it was not true. The Louisiana Workforce Commission weekly reports on new unemployment claims never mentioned the moratorium at any time during the spring and summer of 2010 because thousands of jobs were not lost. In fact, new unemployment claims fell through most of the summer.

Kudos to Mike Stagg and to The Advocate. Last month, Louisiana Monthly published an article that backs up Stagg (republished on The Huffington Post):

In September, the U.S. Dept. of Interior revised projected Gulf job losses from the deepwater moratorium to a range of 8,000 to 12,000, from an earlier view of 23,000. Those figures compare with Louisiana Governor Bobby Jindal’s forecast last spring that 20,000 jobs would be forfeited to the drilling ban.

Last June, GNO, Inc. saw a potential drop of 12,500 to 21,900 full-time-equivalent positions from the deepwater moratorium. The group’s January report said “to date, we have not seen evidence of these projections,” but added that since June, Louisiana has lost over 25,000 jobs statewide. “While this cannot be assumed a direct correlation — unemployment was rising around the country — we are confident that the decrease in drilling permits and the significant slow-down of the oil and gas industry had an impact on this number.”

Since the release of GNO, Inc.’s January report, however, Louisiana officials said that the state’s jobs grew in 2010 as a whole and that December’s unemployment rate of 7.2%, not seasonally adjusted, was unchanged from 2009’s end. Seasonally adjusted, the December jobless number was 8%.

Even more interesting:

Separately, Dr. Loren Scott, emeritus professor in economics at Louisiana State University, said he’s keeping an eye on job numbers in Metropolitan Statistical Areas in the coastal oil patch. In the Houma MSA, covering Lafourche and Terrebonne parishes, unemployment was 5.1%, not seasonally adjusted, in December, down from 5.7% in November and 5.3% in December 2009. Those numbers were all below prevailing national averages. Unemployment also fell in December in the Lafayette, Lake Charles and New Orleans MSAs, including Plaquemines Parish.

In other words, the MSAs which should have been most affected by the moratorium have actually experienced decreases in their unemployment rates. Mr. Stagg asks a couple of provocative questions at the conclusion of his letter:

In light of the moratorium’s failure to cripple our economy, could it be that the economic importance of the offshore oil and gas industry to the state has been vastly overstated all these years?

Who can we now trust to give us an honest answer on this?

 

2 thoughts

  1. While I never bought into the doomsday scenarios surrounding the moratorium, certainly it cannot have created jobs, especially in southeast and southcentral Louisiana. There must be other factors at work in these areas.

    In any event, the moratorium is bad policy and will have negative consequences on the state and regional economy, regardless of the stability or volatility of the Middle Eastern political situation over the next 24 to 36 months. Once gasoline prices have settled in to a higher price, a whole range of goods and services will reflect an actual increase in price, unrelated to the lowered value of the currency.

    Lamar, I anxiously await your well reasoned article on how the whole “Global Warming” scam has been a grand hoax, perpetrated by those with a progressive agenda.

    1. Well, Ace, you’ll probably be waiting anxiously for a long, long time.

      This was published today by The Independent Weekly in Lafayette:

      Economist Loren Scott, who left us scratching our collective head when he predicted in September that the Lafayette metro would lose 3,800 jobs in the next two years, has changed course.

      Reversing his fall prediction of a loss of 3,800 jobs for Lafayette over the next two years, noted Scott now expects a gain of 2,500 jobs over the same period, or an uptick of just under 1 percent each year. That’s the message delivered earlier this week at an awards breakfast for top performers at Van Eaton & Romero Real Estate.

      Scott admits he expected a bigger drop in employment following the BP oil spill. “The big layoffs didn’t happen,” he says. “In part I think it’s because the workforce in the industry is aging. Operators realize that they can’t replace that kind of experience quickly and decided to ride it out.”

      But he adds that with oil trading where it is today, job growth should be much more robust, in the 3-5 percent range. “To some degree, the losses are hidden. When oil is trading at $85-$90 a barrel, Lafayette and Houma should be rocking,” he says, noting that Houma lost jobs throughout 2010, showing a small gain in December, and Lafayette numbers were down slightly. Still the new prognostication was welcome news to the room full of Realtors, who were celebrating VER’s 2010 closed dollar volume of $378 million and 34 years in business.

      http://www.theind.com/business/7860-economist-scott-reverses-job-loss-prediction

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