Crude Summer: Houma, La.

Drilling drives the economy in Houma, La., and practitioners are feeling the pinch in light of the six-month deepwater drilling moratorium imposed as a result of the Gulf oil spill.

September 1, 2010

Oil and seafood are the two core industries that keep Houma humming. So even though the city of 120,000 people hasn’t been physically touched by oil, there are grave concerns about the loss of jobs and population as a result of the Obama administration’s decision to stop deepwater oil exploration for six months.

The goal of the moratorium is to allow adequate time to develop and implement new safety measures on deepwater drilling rigs. The Department of Interior also says time is needed to collect evidence and analyze the cause of the April 20 explosion. As of press time in early August, work was still stopped on 33 exploratory deepwater wells in the Gulf of Mexico.

The moratorium is expected to end Nov. 30, but that hasn’t stopped Houma practitioners from joining in on protests to end the moratorium.

"Pre-oil spill, this city was a boomtown," says Bill Boyd, broker-owner of Town & Country Real Estate in Houma, which sits 70 miles northwest of Grand Isle, La. While many Gulf-area cities were hit hard by Hurricane Katrina, Houma actually saw its population expand, as roughly 14,000 residents from nearby areas relocated there at least temporarily, according to Boyd. About half of them stayed for good, "and a lot of those people became home buyers," he says.

Many Houma residents hold jobs that are tied in some way to deepwater drilling. The industry accounts for about 60 percent of the local economy, and every rig worker equates to four support industry jobs, including positions in supplies, welding, food service, and transportation.

Louisiana has largely escaped the heavy foreclosure activity seen in other states. The state has ranked between 37th and 40th nationwide in foreclosures over the past several years. But an extended moratorium could change that, local practitioners fear. That’s why the Louisiana REALTORS® Association and several local associations throughout the Gulf have taken a stand against the moratorium. "You’re looking at the potential loss of thousands of jobs in Louisiana," says Malcolm Young, CEO of the Louisiana association.

The Louisiana Mid-Continental Oil and Gas Association estimates that 800 to 1,400 jobs per rig platform are at risk, creating a potential economic loss of $165 million to $330 million per month. "It’s mind-boggling, the number of people it impacts," Boyd says.

Boyd says that his company’s sales volume and number of units sold in June were down more than 20 percent compared with the same month last year. "We need to restore economic confidence in the minds of those who live along the Gulf Coast," Boyd says.

In August, as cleanup efforts continued, many contract workers, scientists, media, and military stayed in Houma, home of BP’s regional headquarters. "Will they become home buyers and stay? It’s hard to say. But the hotels are filled," Boyd says.

"Once the spill is completely contained by BP and cleanup efforts slow down, it will be interesting to see what state our economy is in," Boyd says.

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