http://www.nytimes.com/2010/06/18/business/18rig.html?adxnnl=1&emc=eta1&adxnnlx=1276966976-UjZ7I5GHbtNTmg7wOZLWTg
Watching the "Today Show" this morning, we were impressed with a local New Orleans reporter who reminded us that the cost in jobs of the oil spill is increasing with each passing day. Yesterday, one of the most prominent oyster suppliers in the U.S. (supplies all Red Lobster restaurants) had to close its doors. Ironically, aside from unemployment benefits, the only chance these people had to find work would be to help with oil spill "clean up."
That reporter went on to say that there are 16 Federal Government Departments (including the Coast Guard) at the spill sites and none of them are "coordinated." Obviously, this has meant that various "permissions" to take actions have been stop and go. There's no excuse for that level of incompetence.
Tom Zeller Jr. (NY Times article attached) refers to the numbers involved relative to the oil rigs shut down. The moratorium idles approximately 33 oil rigs that were drilling in water depths of 500 feet or more. Many of the rig's owners are seeking customers in other parts of the world. That's immediate unemployment for the motormen, roughnecks and roustabouts who were making $3,500 to $4,000 per month typical for such jobs.
On Wednesday of this week, President Obama and BP announced that the company had voluntarily agreed to create a $100 million fund to compensate such rig workers. PROBABLY NOT ENOUGH! Each rig job supports roughly 4 additional jobs for cooks, supply ship operators and others servicing the industry. Together, they represent total "MONTHLY" wages of $165 million.
The Louisiana Mid-Continent Oil and Gas Association estimates that, for every rig that leaves the Gulf, 800 to 1,400 jobs will be lost, including 3rd party personnel. Raymond James & Associates predicts that the "moratorium" could last well into 2011, directly jeopardizing 50,000 jobs.
Here's a thought: BP opens up its $100 million fund to pay the wages of every person directly or indirectly without employment because of the spill. Since there would appear to be some early success in capturing oil leaking out of the well this week, that oil can be sold in partial support of such an expanded fund. However BP gets the money, they pay.
As for the U.S. Government, appointing somebody to coordinate all the departments involved would seem to make a lot of sense. We're sure Governor Bobby Jindal would agree. As he said this week: "We are not winning this war."
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To be fair, this part:
ReplyDelete"The Louisiana Mid-Continent Oil and Gas Association estimates that, for every rig that leaves the Gulf, 800 to 1,400 jobs will be lost, including 3rd party personnel."
I would take with a *massive* grain of salt, given the source. Yes, they would be the best to know, but they also have the greatest vested interest in applying political pressure to get things rolling again. I think a lot of the figures quoted in this article are characterizable as of this variety.
Having said that: There is no reason why the response can't be more coordinated at this point, agreed. It's bad.
With evidence of pervasive, systemic problems in the safety equipment on these wells though, is it really worth putting more people at risk for some jobs that at this point we aren't really sure have been done properly previously?
I think the moratorium, on the whole, is a decent idea. But we need to take this time to address systemic problems in a rapid, take-no-prisoners fashion.
I don't see that happening. I also happen to agree that people who are furloughed because of this have a right to assistance.
Perhaps the Republicans will allow the 56 votes in the Senate to pass that unemployment extension bill after all. They certainly didn't last week.
It's a complicated issue. I'm not sure keeping things business as usual while trying to fix them just so we can keep as many jobs as Carly Fiorina outsourced to India as HP's CEO is a smart idea. In fact, I think it's a pretty lousy idea.
Again to be clear though: I don't see a lot of forward progress during the moratorium however, and 6 months off with no real change isn't going to do anything at all. Might as well just let the rigs run if that's going to be the end result.
Craig: As always, great comments! The moratorium needs, technically, to be longer and the people who lose their jobs because of it, should be paid every penny they lost (by BP). Any rig that leaves can, ultimately, be replaced. Ironically, the entire volume of oil produced in the Gulf could be replaced by oil from Canada if a new proposal for a pipeline south, currently being considered, was approved by the U.S. government.
ReplyDeleteIt seems to be one disaster after another and I am not sure that a 6 month moratorium at this point will do anything. I think it is a "feel-good" move rather than an actual solution to do this right now. We have the economy, war, oil spill, and increasing problems in Mexico to deal with and no money or time for any one problem.
ReplyDeleteI would like to see a moritorium, but a little later, after the dust has settled and the leak plugged. This way we will have time to gather all of the information (from the accident to the solution). Then we can get a commission together and actually listen to them when they make suggestions.
Tracey: Great point! The problem with the "moratorium" is that nobody is going to know what to do at the six month point. It will take longer. Norway and Brazil are probably right to require "acoustic switches" but it will take our bureaucracy a long time to get alignment on that issue. In the meantime, people lose jobs.
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