Deepwater moratorium impacts Houston's energy economy

Reports by Ed Mayberry and Steve Evans

The six-month moratorium on deepwater drilling could have a huge impact on Houston's energy economy, which utilizes the Gulf of Mexico. With future exploration and production on hold, rigs could end up being deployed elsewhere.

The lease rates for offshore deep-water drilling rigs run between a $250,000 to a half-million dollars a day. There are over 30 of these giant rigs affected by the ban, and that means operators could be losing up to $15 million a day. That will force oil and gas firms to exit the Gulf for new contracts elsewhere in the world. Texas economist Ray Perryman says workers will also move on. "When the workers are redeployed, which is fairly common in the offshore industry, some of the money will come home to be spent locally with the families, assuming they remain in the area. But a lot of it does get diverted elsewhere. The equipment, the leasing revenues and those types of things, can also be diverted as well."

Perryman says once those workers and huge rigs are moved elsewhere, it's no small matter getting them back. "They're almost like having a small city out in the middle of the waters," he says, "and so it is a very difficult thing to redeploy. It's not something that you could have happen overnight."

Perryman says smaller service companies and suppliers based in Houston will be particularly affected if the big rigs move on.

Oil in Ghana

Meanwhile, oil off the coast of Ghana is expected to make a tremendous impact on the country's economy. Discovered a few years ago, the oil is about to make its way ashore by the end of the year, while it watches on with the world as the Gulf of Mexico oil leak continues to spread.

Nana Kobina Nketsia V, Paramount Chief of West Region of Ghana, says what happens in the Gulf also applies to Ghana. "If the oil company coming in sees itself as a pirate, it's just coming in for the money and then moving away, we'll get to know. And when we get to know and you've done the wrong thing, it will breed anger. What has happened with the Gulf of Mexico, it's affecting the whole world -- it's affecting the rich and the poor."

It's uncertain how the country will ultimately be affected, but small towns are anticipating a positive economic boost with infrastructure improvements and new businesses.

About the author

Steve Chiotakis was the host of Marketplace Morning Report until January 2012.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...