Louisiana businesses face reality of no new federal offshore leases anytime soon
Businesses which rely on oil and gas activity off Louisiana’s coast fear that fossil fuels could track a similar demise as the coal industry and that jobs could disappear without enough renewable fuels jobs to replace them.
President Joe Biden wants to substitute fossil fuel production and consumption with policies that promote renewable energy, such as wind and solar power, and could be a problem if tackled too quickly.
“It’s going to devastate our communities,” Paul Danos, CEO of Houma-based Danos, said during a recent industry panel discussion. “We know that long term, there is going to be an energy transition … but it’s got to be done in a way that’s paced appropriately. We’re not going to flip a switch; it’s not going to happen like that,” he said.
The Houma-based oilfield services business holds a three year contract to supply 144 workers across Royal Dutch Shell’s offshore fleet ferrying crews to oil platforms on helicopters regularly.
State and federal officials have acknowledged there needs to be an equitable transition for Gulf Coast residents, but there were few references to Louisiana during a recent virtual public session hosted by the U.S. Department of Interior. And there were no representatives with strong ties to Louisiana involved in the meeting, which some industry advocates say was a misstep.
The Department of Interior expects to draft a report for the Biden administration — while there is a temporary ban in place on new oil and gas leases on federal lands and waters. An auction of federal leases in the Gulf was halted in March, and one scheduled in November likely won’t happen either.
Faced with no new offshore lease auctions for at least a year, some wonder how that might affect future activity in the Gulf, although companies do have a stockpile of leases from previous auctions that have not yet been drilled and could be used.
“It would be a tragic mistake for the federal government to hastily restrict offshore development,” said Chett Chiasson, executive director of Port Fourchon.
Port Fourchon is a hub for upward of 90% of deepwater oil production-related activity in the Gulf of Mexico, and there are more than 250 tenant companies at the site in Lafourche Parish, between Houma and New Orleans. Each day, hundreds of large supply vessels travel along the port channels. It is also the land-based hub for the Louisiana Offshore Oil Port, which transitioned from an import terminal to exports as production ramped up in the U.S. in recent years.
Serving on the panel, Chiasson argued that industrial development is not always at odds with the environment and that local businesses want work, whether it’s fabricating wind turbines for offshore or oil rigs.
“I know the companies in Bayou LaFourche in our region. If anything needs to be fabricated and go offshore, they want to be able to do it, no matter what type of energy services,” he said. “We have the technology and expertise; we want to be a part of it.”
Chiasson criticized the lack of new jobs created after solar farms are constructed.
While south Louisiana is on track to become a larger hub for solar farms in the coming years as utilities look to purchase more renewable energy, each solar project requires only a handful of jobs after construction.
“There’s no correlation between what we see in the oil and gas sector and in particular the offshore oil and gas sector in terms of job numbers created to what we’re seeing in renewables. On the construction side, yes, but on the permanent jobs, no, and that’s a major concern,” Chiasson said.
He also noted the manufacturing of renewable energy products, such as a wind turbine or solar panel, still requires the petrochemical industry for components that go into their development. Offshore wind is another potential for the Louisiana coast, likely near its border with Texas where winds are…