OFFSHORE DRILLING MORATORIUM: SEVERE ECONOMIC HARDSHIP AHEAD FOR GULF COAST

News Release Offshore Marine Service Association OMSA June 4, 2010

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ADMINISTRATION’S MORATORIUM ON OFFSHORE DRILLING WILL
CAUSE LONG-TERM  ECONOMIC HARDSHIP FOR GULF COAST MARINERS,
COMMUNITIES 
 
Harahan, LA -- The Obama Administration’s sweeping
moratorium on offshore drilling is already causing irreparable economic harm for
America’s maritime industry, according to the Offshore Marine Service
Association (OMSA), the national trade association for the U.S. flag vessels
that work in the offshore energy sector.  “We are already
dealing with both an ecological and economic disaster.   This kind of
sudden and ill-conceived government policy can only make it worse,” said OMSA Chairman Otto
Candies, III,” said OMSA Chairman Otto Candies, III. 
On May 27 the Administration ordered a halt to offshore drilling in water
depths over 500 feet, canceling 33 drilling projects, an action that will have
both immediate and long-term negative economic consequences for the businesses
that are associated with drilling.   
 
OMSA reports that oil companies have already started
canceling contracts for vessels that carry supplies to drilling rigs, putting
those vessels out of work and forcing vessel companies to plan imminent
layoffs.  Early estimates indicate that, in short order, more
than 100 vessels may be tied up.  The economic harm will very
quickly spread through the offshore maritime industry, the shipyards that build
offshore vessels and the hundreds of service companies that support the industry
as drilling comes to a halt.   
 
“A study of the offshore vessel sector earlier this year
showed that our industry supports more than 100,000 families in this country,”
said Ken Wells, OMSA President. “The industry has struggled to climb out of a
severe economic downturn.  The moratorium threatens any hope
of recovery and creates the potential for economic hardship that could last a
decade or longer.”
 
OMSA estimates that for every mariner who works on-board
a vessel, there are nine other Americans working in shore-side jobs that support
vessel operations.  Beyond the vessel crew, the negative
consequences of the moratorium could impact everyone from service technicians
supporting everything from diesel engines to the air condition systems to the
local grocer who supplies food for the boat’s galley. 

 
Gulf Coast state and local government revenues will also
decrease due to lower income tax and sales tax collections. “The oil companies
and drilling rigs will leave for projects in other parts of the world and the
local communities will be left to pick up the pieces,” said Wells, pointing out
that offshore vessels are a major part of the tax base in some coastal
communities.  
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