Letter to The Advocate: Gulf oil, gas value exaggerated

On February 23, The Advocate published my Letter to the Editor written in response to an article the paper published asking leaders of the anti-deep water drilling moratorium leaders to explain how tax collections were up and unemployment down in the state and in the markets where the moratorium was predicted to spread economic calamity.


Here's the text of the letter:

Advocate Capitol news bureau reporter Michelle Millhollon’s Feb. 15 article on reality not conforming to the hysteria generated by critics of the deep-water drilling moratorium served a valuable purpose beyond forcing those critics to confront the facts that their scare campaign against the moratorium was a hoax perpetrated against the people of this state.

The oil and gas industry, its lobbyists and public officials dependent on the industry for political funding fanned the anti-moratorium hysteria.

The signs of the hoax can be found in the lawsuit filed to overturn the moratorium a month after it was declared.

When 37 companies joined Hornbeck International in the suit against the moratorium, it looked like an industrywide revolt against the moratorium.

The reality was that those 37 companies were owned or controlled by two prominent Louisiana Republicans, Boysie Bollinger and Gary Chouest. Bollinger controlled 21 of the companies, Chouest 16.

Gov. Bobby Jindal directed state Attorney General Buddy Caldwell to file an amicus brief in the case in which Caldwell and his attorneys lied to Judge Martin Feldman.

On page four of that June 20 brief, in his “Statement of the Case” Caldwell declared: “Because of the moratorium, many thousands of Louisiana workers have lost their employment and many more are at risk of losing it in the near future.”

The only problem with the statement is that it was not true. The Louisiana Workforce Commission weekly reports on new unemployment claims never mentioned the moratorium at any time during the spring and summer of 2010 because thousands of jobs were not lost. In fact, new unemployment claims fell through most of the summer.

Lobbyists such as Don Briggs, of Louisiana Oil and Gas Association, can be forgiven; after all, they are paid to spin stories so as to put their clients in the best light. But those supposedly independent organizations that joined in fanning the fears last summer — Greater New Orleans Inc., the Greater Lafayette Chamber of Commerce, the LSU Center for Energy Studies — have had their credibility seriously damaged.

Public officials who were active players in this hoax — Gov. Bobby Jindal, then-interim Lt. Gov. Scott Angelle and Caldwell — must also be held accountable. Either they were knowing participants in this hoax or their industry patrons duped them.

All of this raises the possibility that we might have all been victims of a larger, longer-running hoax.

In light of the moratorium’s failure to cripple our economy, could it be that the economic importance of the offshore oil and gas industry to the state has been vastly overstated all these years?

Who can we now trust to give us an honest answer on this?

Mike Stagg
independent IT consultant
Lafayette

Deep Water Drilling Approved; Oil Industry Continues Whining

That whining Bobby Jindal complained about at the end of last year was apparently coming from his buddies in the oil and gas industry — not the heads of the state's colleges and universities.

The proof could be found this week when, after the Obama administration allowed 13 deep water drilling operations in the Gulf of Mexico to resume, the industry cacophony of whining ratcheted up to a higher pitch.

Too little, too late. Not enough. Too slow. Too hot! Too cold! Bwaaahhh!! The industry and its apologists, accustomed to writing the rules they then chose to ignore, are perplexed by the notion of regulation and inspection by people who (at least for now) can't be bought.

Get used to it. The well has been plugged, new rules are in place, but the whining will not stop.

The legitimacy of the whining is best assessed in the context of the earlier rage against the moratorium and the dire predictions the oil and gas lobby, elected officials, academics and other said the temporary moratorium would have on Louisiana's economy.

Lies and Propaganda

The only way to describe the claims made about the moratorium and the way it was used to attack the Obama administration in Louisiana is to call them what they were: lies and propaganda.

The liar in chief was Governor Bobby Jindal who immediately recognized that the moratorium posed a financial threat to his legions of backers in the offshore oil services industry anchored primarily in coastal southeast Louisiana.

After GOP heavy hitter, former co-owner of the New Orleans Hornets, and Jindal backer Gary Chouest's companies threatened immediate layoffs after the moratorium was declared, Jindal spoke at the first anti-moratorium rally held in an Edison Chouest facility at Port Fourchon on June 11. Jindal spoke at the second anti-moratorium rally on June 24th which was held at the Gulf Island Fabricators facility in the port in Houma where that company is working on a Chouest project that is at least partially funded by the State of Louisiana.

That rally was held four days after the Jindal-ordered amicus brief filing in the suit against the moratorium in which the governor's attorneys, headed by Attorney General Buddy Caldwell, lied to the federal judge hearing the case. In the brief, Caldwell and the other attorneys said that the moratorium had cost thousands of Louisiana workers their jobs and cited the Louisiana Workforce Commission as the source of that information.

Only one problem. The claim was not true. It was not true then and was not true all through the summer when new unemployment claims in Louisiana showed no blip attributable to the moratorium. In fact, unemployment in Louisiana stayed below 2009 levels throughout the summer of 2010.

The fact-free attacks on the moratorium (and the Obama administration) reached a crescendo at the Lafayette Cajundome on July 21. On that day, the relentless campaign of economic fear waged by the industry, the Greater Lafayette Chamber of Commerce (technically, there is a difference), and state and local government culminated in the gathering of about 12,000 to get two hours of personally delivered lies.

All of mainstream media in Lafayette bought into the so-called "Rally for Economic Survival," setting aside any pretense of objectivity and shutting down any semblance of critical thinking. There were on-air editorials by local television stations; a front-page editorial by the Gannett daily and a heavy serving of fear-dripping op-eds by opponents of the moratorium.

At the event, then-interim Lt. Governor Scott Angelle delivered the speech he'd been perfecting on smaller audiences in which he claimed President Obama didn't like the oil and gas industry. There was a blatantly misleading presentation from the Louisiana Workforce Commission on the jobs that would be affected by the moratorium. The end of the economic world was near and Lafayette would be in ruins before the summer was out if the moratorium was not lifted.

In September, the BP Gulf Gusher was plugged. In October the moratorium was lifted. The industry whining continued because drilling and/or coastal destruction was not allowed to immediately resume.

After a quick dip in the fund-raising business, Angelle returned to his prior role as Secretary of the Department of Natural Resources where he faced a decision on how to tax his old buddies (and recent contributors) in the oil and gas industry. Some saw the glaring ethical issue that Angelle and his boss the Governor chose to ignore.

New Whinery

Now, with drilling activity officially sanctioned, the industry's apologists have cranked up the whinery again.

Their lies of 2010 rob them of any credibility.

We know for a fact now that the moratorium cost very few jobs in Louisiana and in the offshore drilling industry. There were fewer than 400 claims made on the $100 million fund set up to help compensate those who lost their jobs or income due to the moratorium. We know that the moratorium was never cited as the cause of any spike in job losses in 2010 in the Louisiana Workforce Commission's official reports (which is separate from the propaganda work they did at the behest of the Governor and the industry).

The best evidence of the lack of the impact of the moratorium on the economy, though, came in Lafayette. In December, City/Parish President Joey Durel (a speaker at the anti-moratorium rally in July) got the Lafayette Consolidated Government Council to approve a pay raise for Lafayette Parish governmental workers. Durel cited increased sales tax collections in Lafayette Parish as providing the fiscal underpinning for the raises.

If the moratorium had any economic impact, it was indirect. The direct impact was from the fear campaign waged by opponents of the moratorium who succeeded for a time in convincing people that the 2010 moratorium would send the region's economy into a tailspin that would rival the oil and gas industry collapse of the mid-1980s.

None of that happened.

The people who inflicted this hoax on Louisiana know it. The people know it. The perpetrators of the hoax must not be allowed to go unpunished for their deception.

Fear-Fanned Loathing In Lafayette

Wednesday, July 21, 2010, will go down as the high-water mark of in-state efforts to end the Gulf of Mexico deep water drilling moratorium imposed by the Obama administration in the wake of the Deepwater Horizon explosion and subsequent blowout.

About 11,000 people turned out at the Lafayette Cajundome for the "Rally for Economic Survival." Getting that many people to turnout for anything other than a sporting event in Louisiana takes some doing. But, the 'doing' that got them there reveals that opponents of the moratorium are engaged in blatant and obvious fear mongering, and have frittered away what little credibility they had on the issue with the lies and distortions included in statements made leading up to and during the event.

Make no mistake about it, what happened in Lafayette on Wednesday was an anti-Obama political rally organized by the oil and gas industry and fronted by Governor Bobby Jindal and his hand-picked interim Lieutenant Governor, Scott Angelle. Angelle was among friends, having run the Department of Natural Resources until Jindal elevated him this spring. Republican Lieutenant Governor candidate Sammy Kershaw provided entertainment (not sure if he just sang or if he read from his federal tax liens, too).

There was steady buildup leading up to the event. In Lafayette, the Greater Lafayette Chamber of Commerce lead the drive to build attendance. Ultimately, all of Lafayette's mainstream media fell in line, becoming virtual (if not outright) partners in the promotion of the event. The Daily Advertiser ran a front page editorial calling for an end of the moratorium on the day of the event. ABC affiliate KATC's station manager delivered an on-air editorial calling for an end to the moratorium. Radio stations did live remotes from the event.

Lies, Damned Lies and Statistics

This buildup was based, in fact, on a carefully orchestrated distortion of what the moratorium is, then building a statistical house of cards atop those distortions. The Louisiana Oil and Gas Association (LOGA), and its president Don Briggs, were prime movers in the effort to ramp up the climate of economic crisis that helped produce the turnout in Lafayette. Briggs is a long-time player in the Lafayette business community, serving on the board of the Lafayette Chamber. LOGA and Briggs have long-standing ties with the Lafayette Economic Development Authority (LEDA) and the LSU Center for Energy Studies, both of which produced economic reports painting horrific stories of the potential impact of a six-month moratorium.

The advisory council for the LSU Center for Energy Studies gives the distinct impression that this is an advocacy group hiding inside academia. This must be where the industry gathers when Lafayette's Petroleum Club is booked. It is not surprising that the rally included a presentation from the Center and the picture painted was bleak.

Do you think they would have been allowed to make a presentation that said anything different? No. Only the finest store-bought statistics were allowed at this privately-funded propaganda event.

The premise of all the pre-event propaganda and the presentations made during the rally is that the Obama administration has shutdown all drilling in the Gulf of Mexico — not just deep water drilling — and that the moratorium will become permanent.  This might be good short-term politics, but it is not supported by the facts.

And while companies like Diamond Drilling have made a big show about moving two rigs out of the Gulf of Mexico to other drilling locales, the fact is that decisions on when and where to drill in permitted waters are made by the big oil companies — not by the drilling companies, not by the service companies, and not by lobbying groups.

What are the big oil companies thinking? They plan to resume drilling in the Gulf of Mexico once the moratorium is over and new rules are promulgated. That announcement was made on the same day as the rally, but strangely did not get much press coverage in south Louisiana.

Governor Bobby Jindal has been milking the BP Gulf Gusher for all the political gain he can get from it, having spent almost three months on the coast chasing down cameras and microphones for opportunities to criticize the federal response to the industry-caused disaster. With a presentation made at the rally, Jindal has apparently put the Louisiana Workforce Commission to work in advancing his political agenda.

The thrust of all of this is that economic ruin will result from the moratorium. To paint this picture, the impact of the oil and gas industry must be inflated and the discrete segments within the industry must be ignored.

Enter the Louisiana Workforce Commission. In a presentation on the rally website (see graphic), the commission includes people who work at "Gasoline Stations" to ramp up the employment numbers of the industry in the state. According to the June employment report issued by the LWC, this adds 18,600 workers to the "industry" payrolls. That means convenience store cashiers and clerks are considered part of the energy industry.

It is also worth noting that, according to the LCW's official job statistics for June (page 8 in the PDF), those 18,600 gasoline station workers out number all of the people engaged in oil and gas drilling and extraction in Louisiana. That is no quirk due to the moratorium. This has been the case in every report this year.

Are gasoline station workers affected by the moratorium? No. But, it heightens the purported importance of the industry of the state's economy and, thus, fits nicely within propaganda objectives of the conference organizers.

Off The Deep End

People say things in unscripted moments that they later sometimes regret. So, in an attempt to provide opponents of the moratorium the kind of fairness they will not provide supporters of the moratorium, this segment will focus on the prepared written statements by Rally organizers which The Daily Advertiser published on the morning of the event.

Reading these, it becomes clear that truth was among the first casualties in the ramp up for the rally.  These otherwise staid community and business leaders have been scared witless by what they have been told about the economic impact of the deep water drilling moratorium. They are spouting gibberish based on lies they've been sold.

The statement by Don Briggs is a clear example of how the facts are conflated and mixed to create a potential outcome that has no basis in reality. Here are the first two paragraphs:

Louisiana's oil and gas industry has a more than $70 billion annual impact. The industry supports more than 15 percent of household income in the state — $12.7 billion annually.

The continuing moratorium on offshore drilling affects many more people than the 320,000 working jobs in Louisiana supported by the oil and gas industry. As a result, it also affects far more than the 58,000 Louisianans working in extraction, refining and pipeline jobs.

Reading the first paragraph, one is left with the inescapable conclusion that the deep water drilling moratorium is going to wipe out the oil and gas industry in Louisiana. Someone apparently forgot to tell the industry. According to a chart on LOGA's website, there were 184 active drilling rigs in Louisiana last week. This is almost two months into the moratorium. Baker Hughes, Inc., which provides its own count, said there was more drilling activity in Louisiana last week than there was a month ago.

If anyone knows this, it is Mr. Briggs. After all, it is his job and that of his organization to know the Louisiana oil and gas industry. Drilling activity has surged in the Haynesville Trend area of northwest Louisiana. Yet, Mr. Briggs insists on pretending that the deep water drilling moratorium threatens the entire industry in the state.

This fundamental dishonesty undermines legitimate concerns about the economic impact of the moratorium. Yet, this failure to be content with the facts is rampant in the public statements and presentations given in support of the rally and against the moratorium.

Then there is the matter of the jobs. Briggs' second paragraph would lead one to believe that the moratorium on deep water drilling threatens to wipe out, at the very least, all of the jobs related to "extraction, refining and pipeline" work. The Louisiana Workforce Commission's Monthly Employment Bulletin does not break out jobs according to the categories Briggs uses, meaning there is no ready way to verify his numbers other than, you guessed it, relying on the estimates of industry groups like LOGA— a sponsor of the rally and among the leading industry opponents of the moratorium.

Another moratorium opponent given space in The Daily Advertiser is Ovide N. Mercure Jr., Controller of Frederick's Machine and Tool.

Mr. Mercure writes:

Our accidents are tragic and our mistakes are costly, so we work hard to ensure they don't happen. The industry is one of the most heavily regulated in existence. Penalizing an entire industry for the failures of a single company will be catastrophic for your families and neighbors.

Actually, the deep water drilling industry was among the least regulated deep water areas of operation in the world. Operating under rules made during the Bush/Cheney years, the industry wrote their own rules in the Gulf of Mexico. In fact, many of the safety rules the industry said it did not need to use in the Gulf of Mexico are safety rules they are required to meet in deep water drilling operations in the North Sea and other locales.

We heard two things repeatedly throughout the 85 days that the well gushed uncontrollably into the Gulf: 1) the best minds in the industry were helping BP try to deal with the blowout; and, 2) the various approaches used to try to cap the well had been used successfully in shallow waters but "never before at this depth."

Rob Guidry, President and CEO of the Greater Lafayette Chamber of Commerce, claims the win, though, for most outlandish statement when he wrote in The Daily Advertiser, the following:

President Barack Obama has placed economic sanctions on Louisiana, and eventually the United States, beyond those imposed on Iran!

Obama's moratorium on oil and gas drilling is already negatively impacting the jobs of our families and friends. Tens of thousands more jobs will be lost on a daily basis as the irrational moratorium continues.

A temporary moratorium on deep water drilling is worse than U.S. sanctions on Iran? Proof please! Have assets been frozen? Have accounts been seized? Have companies been banned from doing business in Louisiana?

Mr. Guidry is a good man, but he's got a head full of bad information.

Some of those ideas might be coming from Mr. Briggs who sits on the Lafayette Chamber's Board of Directors. Or they might have come from David H. Welch, the President and CEO of Stone Energy, and chairman of the Chamber's Board of Directors. According to Forbes magazine, Mr. Welch is a man with deep ties to deep water drilling, BP. He's also got extensive ties with the energy industry as a whole, serving as a director of the National Ocean Industries Association. It's just a simple twist of fate that this year the Lafayette Chamber would be headed by a man with such a deep history with BP and its various North American operations.

Return to Business As Usual ASAP!

What the rally and the push to end the moratorium are about is an attempt by the oil field service industry and the political leaders dependent upon them for campaign financing to get back to business as usual in the Gulf of Mexico just as quickly as possible. Interestingly, organizers did not meet their goal of getting 15,000 people to attend. Some local television stations were predicting 20,000 attendees with spillover being shuffled into the Cajundome Convention Center next door. Didn't happen.

That means getting back to destroying Louisiana's coast at the alarming, but less conspicuous rate of a football field every 38 minutes. The people who are making the push are careful to preface their call with the obligatory nods of acknowledgment to the 11 workers lost in the original explosion on the Deepwater Horizon and the damage all of the resulting gushed oil is causing to the coast, to fisheries, to fishing families, etc.

But, really, what the push is about is saying that their right to wreck the Gulf and our coast trumps the interests of all others. Nothing is more sacred than their right to make money off what is essentially a colonial extractive operation where workers are expendable and the comparable pittance in royalty money and taxes directed to property owners and the state is part of the cost of making people in other parts of the world wealthy.

Oil and natural gas are essential parts of our economy. But, the BP Gulf Gusher is a defining moment that demands that we change the way we live — the way we power our homes, our vehicles, and our way of life. There is no such thing as cheap oil any more. What happened to BP can happen to other companies drilling in such deep water where margins for error are so tight and unforgiving.

The Rally for Economic Survival at the Cajundome was the last gasp of an old order trying with all its might — by hook or by crook; with conflated facts and distorted data — to cling to an era that has ended. The world will never be the same as it was before the explosion on the Deepwater Horizon.

What has happened since then in terms of economic and ecological damage proves that we cannot — as a state, as a nation, as people who believe we are bound to be responsible stewards of our state and our environment — allow anything approaching a return to business as usual.

As was just demonstrated by the killing of climate control legislation at the federal level, the energy industry will fight policy changes fiercely. But, we can be stronger. Whatever policy they can buy or block in Washington and Baton Rouge, we can circumvent by making changes in our own lives. Getting solar panels. Reducing energy consumption. Getting more efficient vehicles. Riding bikes. Pushing for high-speed rail.

Change has arrived in Louisiana and that the BP Gulf Gusher brought it. The politicians don't get it yet.

But, that's the way it always is.

My Letter to the LCG Council: Ignore The Chamber

On Friday afternoon, I hand-delivered a letter to all nine members of the LCG Council to the Council office. Subsequent to that, I emailed each councilman a copy of that letter.

The core argument is this: The Greater Lafayette Chamber of Commerce has no special standing on the issue of Charter Repeal. Their concerns about the potential impact are legitimate, but those concerns are best discussed in public with the only entity with standing to decide the form of government we will live under here — the voters of Lafayette Parish.

The process that got us here was legitimate and straightforward. Any attempt to delay or defer putting this matter before the public will undermine the credibility of the Council, the Charter, and those organizations seeking to stop this from going to voters.

Here's the full text of the letter:

Friday, February 26, 2010

Council Chair, Jay Castille, District 2

Councilman Purvis Morrison, District 1

Councilman Brandon Shelvin, District 3

Councilman Kenneth Boudreaux, District 4

Councilman Jared Bellard, District 5

Councilman Sam Doré, District 6

Councilman Donald Bertrand, District 7

Councilman Keith Patin, District 8

Councilman William Theriot, District 9

Gentlemen,

I write today to urge you to vote on Tuesday to preserve the integrity of Consolidated Government and the current Charter. You can best do this by voting to approve the proposed ordinance that would call a November parishwide referendum on the question of whether or not to repeal the Parish Charter.

By voting to proceed with the ordinance and the referendum you will instill voter confidence in you, your processes and in the Charter amendment process that will serve the parish well regardless of the outcome of the vote on Charter repeal.

The credibility of the Council and Consolidated Government are at stake here because of the manner in which this issue was raised and the sole route the current Charter provides for resolving this issue.

The Charter Committee formed with the approval of the full LCG Council was duly constituted and charged with reviewing a range of issues relating to the functions of government under the current Charter. This committee was anything but radical; in fact, some argued that the committee was stacked with those with vested interest in the current Charter for any significant change to come from its work. After all, three of you were members of that committee; City/Parish President Durel was a member; two members of the original Charter Commission, Jeannie Kreamer and Nelson Quebedeaux, were members; and Greg Davis, a public employee who manages the Cajundome, was a member.

I attended both meetings of the committee. This was no wild-eyed bunch.

Importantly, the committee vote on this issue was unanimous. There was no dissent. There was no split vote. Your duly appointed and constituted committee charged with reviewing and addressing deficiencies in the Charter voted unanimously to recommend that you let the voters of Lafayette Parish decide whether they want to continue under this present form of government or not.

That is the issue that will up for consideration on Tuesday: will you allow a credible process for reform and/or repeal of the Charter run its course by allowing the people to vote; or, will you succumb to the special pleadings of The Greater Lafayette Chamber of Commerce to delay this matter?

The Chambers concerns about the possible impact of deconsolidation are valid. Their request for a delay in action calling the vote is not. At no point has the Chamber or anyone else suggested that there was anything suspect about the manner in which the Council created the Charter Committee or in the way that Committee conducted its business.

Cynics would argue that The Chamber's request to table the matter for 90 days is an attempt to reduce voter participation in this matter while enhancing the organization's relative power in a low-turnout election.

By The Chamber's own admission, if you vote to table the ordinance, the election cannot be held in November when turnout will be relatively high due to the referendum sharing the ballot date with federal elections. A spring ballot would ensure lower voter turnout for this election the critical nature of which The Chamber accurately assesses.

Viewed in this light, The Chamber is trying to shape the outcome of the election by shifting the election date.

The Chamber says they want to slow this down because there are too many unanswered questions. This is precisely the reason to proceed. Here's why: The form of government that we chose to live under is, by definition, the Public's Business. This requires a public debate. Not a series of closed door meetings involving Chamber operatives and members of the Council or the administration.

This debate belongs in the public square and a referendum is the only way to force it to take place there.

Because no procedural, legal, or ethical questions have been raised by anyone regarding the process through which this proposed ordinance was arrived at, there is no legitimate basis for The Chamber's request to be honored.

The Charter does not give the Chamber right of first refusal on reviewing Charter amendments. They have no special standing in this matter, other than the fact that their representative Bruce Conque has been the source of a series of poorly though-out suggestions — freezing current council districts for five years, extending the current council term to five years, and, now, letting the Chamber sit as a sort of House of Lords, deciding on the appropriateness and timing of matters under consideration by the council and which of those that might be allowed to find their way to the voters.

The power of changing, even repealing, the parish Charter is reserved exclusively to the voters of this parish. Acting in good faith, you created a committee and set in motion a process that produced repeal of the Charter as a unanimous recommendation to you. Doing anything less than allowing this issue to go to the voters as quickly as possible would call into question your credibility and the credibility of Consolidated Government.

You are not being asked to vote your opinion of repealing the Charter. You are being asked to call an election on this question that will not only allow, but force proponents and opponents of change to make their case to the voters of Lafayette Parish — the ultimate arbiters of this matter.

Like any other citizen of the parish, you will have the opportunity to study the facts, make a decision, pick a side, and argue your case. That is one thing the framers of the current Charter got exactly right: the real power of government in Lafayette flows directly from the people.

Your credible process resulted in this matter being elevated to a matter of public debate that can only be properly resolved by a vote of the people. Trying to now stifle or cut off that debate would demonstrate contempt for voters and their judgment that so far only the Greater Lafayette Chamber of Commerce seems willing to publicly express.

The Charter says that Lafayette voters have the final say on this matter. The issue has been raised through a credible process. The Chamber has no special standing that could justify their request for a delay in putting this matter up for public debate and vote. Call the vote, let the debate begin, and let the facts on consolidation and de-consolidation come out.

This will provoke the kind of vigorous discussion this issue needs and cries out for.

Honor your processes. Respect the work of the committee you appointed to handle this matter. Trust the voters. Ignore The Chamber. Pass the ordinance.

Sincerely,

Mike Stagg