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Louisiana Gulf Coast Businesses Lament Losses

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Louisiana Gulf Coast Businesses Lament Losses

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Louisiana Gulf Coast Businesses Lament Losses

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Now from the environmental impact of the Gulf spill to the economic impact of the deepwater drilling ban that followed. Yesterday, the White House lifted its six months moratorium. But many businesses that depend on the oil industry say the Gulf Coast is only beginning to feel the full impact of that drilling ban.

NPR's Kathy Lohr reports.

KATHY LOHR: A recent federal government report played down the damage, saying the moratorium had created only a temporary loss of some eight to 12,000 jobs. Many in Louisiana say that's just not true.

Professor ERIC SMITH (Associate Director, Tulane Energy Institute): We might have had three or four percent unemployment and now it's creeping up.

LOHR: Eric Smith is associate director of the Tulane Energy Institute in New Orleans. It is true this region has been sheltered from high unemployment that much of the country has seen, and that's largely because of the success of the oil and gas industry.

But Smith says the region has lost at least 10,000 jobs directly due to the moratorium and thousands of others indirectly. And Smith says some of the jobs created are not the same kind of stable, high paying jobs that have been lost.

Prof. SMITH: So if I lay off 500 drilling workers and I hire 500 people that I pay $12 an hour to sweep up the beach, that's a net loss for Louisiana.

(Soundbite of heavy equipment)

LOHR: About 100 miles south of New Orleans, Port Fourchon is a key support center for the oil and gas industry. But it's a lot quieter these days. Helicopters that used to take thousands of employees out to drilling rigs each month are now silent.

Chet Chiasson is the port's director.

Mr. CHET CHIASSON (Executive Director, Port Fourchon): You see this parking lot that could probably handle about 350 cars or so. And you might see, what, 35, 40 cars in this parking lot. Before April 20th, this parking lot was full.

LOHR: Chiasson says companies have moved out much of their equipment. Rigs are no longer being serviced and the port cut its rental rates by 30 percent to try to keep business here.

Mr. CHIASSON: What many companies have had to do is cut hours, cut overtime, cut salaries, freeze salaries. They've had to look at themselves and say, well, we can't spend money on that. We can't expand. We can't do this maintenance work.

LOHR: Smaller businesses that support the oil industry have also had a hard time since last spring when the BP well exploded. Rig-Chem in Houma, Louisiana, employs 50 people. It provides chemicals to deepwater drillers when they're finishing off their new wells.

Ms. LORI DAVIS (Co-Owner, Rig-Chem): When there are no rigs operating there's nothing for us to do.

LOHR: Rig-Chem co-owner Lori Davis says the company has been through hurricanes that have temporarily shut down the business, but she's never seen a more difficult time than this. And for the first time ever, she's had to apply for a line of credit.

Ms. DAVIS: Getting money from banks, it's very hard right now. And then, when you don't have the receivables to pledge to get a line of credit, banks don't want to take the risk. So if you don't have a good relationship with a bank right now, you're really in trouble.

LOHR: Davis got the line of credit but she still doesn't know when she'll see business pick up. If things don't improve by December, Davis says she'll have to cut jobs.

(Soundbite of scooping ice)

LOHR: Over in Golden Meadow, Louisiana, Rose's Cafe is not as packed as usual. Billy Joe Brunet(ph), a contract welder, is one of the regulars here who is lamenting his situation.

Mr. BILLY JOE BRUNET (Welder): You know, if the oil field is not spending money then it doesn't trickle down to us.

LOHR: People who live in this area are angry at BP because of the oil spill, but they're just as angry at the federal government for having banned deepwater drilling. Brunet says it was the government that created economic uncertainty that didn't exist before and he remains pessimistic.

Mr. BRUNET: Down here in Lafourche Parish, I want to say we were in the top 10 in the nation, as far as having the lowest unemployment. You know, if you can't find a job down here, you don't want to work. Okay, basically. But we're going to be 10 percent, 15 percent unemployment down here because of a moratorium, because of one company's mistake.

LOHR: Even with the drilling ban lifted, businesspeople along the Gulf say it could take months or even years for them to recover.

Kathy Lohr, NPR News.

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