Shallow-water drilling companies warn of job losses

by Gabe Gutierrez

HOUSTON – Shallow-water drilling companies are blasting the Obama administration for not extending their oil and gas drilling leases and they claim thousands of Houston jobs could be lost or delayed.

Last week, the federal government officially extended almost 1,400 deep-water drilling leases for a year to make up for the lost production during last year’s drilling moratorium following the BP oil spill in the Gulf of Mexico.

“Once again, the shallow-water operators are left out in the cold,” said Jim Noe, a spokesperson for Hercules Offshore who also leads a coalition of shallow-water companies. “It doesn’t make any sense. You can be for or against offshore drilling. I think most people — particularly in today’s environment — are for jobs.”

Noe estimates that thousands of Houston jobs would be in jeopardy if the leases were allowed to expire because many shallow-water companies have essentially lost a year’s worth of production and would be reluctant to rebid for leases in such an uncertain regulatory climate.

Almost 350 shallow-water leases are set to expire by the end of 2011, Noe said.

The federal government has told the shallow-water companies they don’t need the extension since they weren’t shut down during the drilling moratorium. But Noe said delays in the permitting process during that time effectively idled many of their workers.

Tim Caws moved to Houston from Australia six years ago to work for an energy industry contractor. He now worries his job making pipes for offshore companies could be in jeopardy.

“I think (the industry) does get a bad rap,” he said. “We rely on the oil industry so heavily. It’s such an important part of our lifestyle.”

Still, other Houstonians have a tough time sympathizing with the oil companies.

“It’s very hard to feel sorry for anybody that’s making the excessive profits,” said Keith Bolden.

“I think they should be investing time and money into alternative energy, so that way I don’t have to spend $70 to fill up my gas tank,” said Ryan Cabiya.

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