Examining The Effects Of Drilling Moratorium The Obama administration's six-month moratorium on offshore drilling may force many of the rigs in the Gulf to look for work elsewhere. Michele Norris talks to professor Eric Smith, the associate director of Tulane University's Energy Institute, about what effect -- if any -- the moratorium is having.
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Examining The Effects Of Drilling Moratorium

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Examining The Effects Of Drilling Moratorium

Examining The Effects Of Drilling Moratorium

Examining The Effects Of Drilling Moratorium

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The Obama administration's six-month moratorium on offshore drilling may force many of the rigs in the Gulf to look for work elsewhere. Michele Norris talks to professor Eric Smith, the associate director of Tulane University's Energy Institute, about what effect — if any — the moratorium is having.

ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MICHELE NORRIS, host:

And I'm Michele Norris.

It's an argument we've heard repeatedly in public and on this program since President Obama ordered a six-month moratorium on all oil and gas drilling in the Gulf of Mexico. It goes something like this: The ongoing oil spill is taking a terrible toll on the Gulf Coast economy. But this drilling ban could potentially be even worse. The moratorium has been in place since last month. Just today, in federal court in New Orleans, oil industry lawyers argued for a temporary injunction to lift the ban.

To help us understand what affect, if any, the moratorium is having, we turn now to Professor Eric Smith. He's the associate director of Tulane University's Energy Institute.

Welcome to the program, Professor Smith.

Professor ERIC SMITH (Associate Director, Energy Institute, Tulane University): Well, thank you for having me.

NORRIS: We're hoping that you can give us a bit of a primer to help us understand this. First, how many oil rigs in the Gulf have been forced to shut down as a result of this moratorium?

Prof. SMITH: Well, there are 34 rigs that are currently qualified to drill in deepwater and 33 of those are drilling in deepwater, according to the president's definition, at 500 feet. Those 33 rigs are generally very expensive pieces of equipment. And to get them built, you have to sign long-term, take-or-pay contracts, which briefly means that the owner of the rigs - the Transoceans of the world - could care less whether you use it or not, you're going to pay for it one way or the other.

So if you shut down the ability to drill, those rigs have no choice but to go somewhere else where they're more welcome. And the most likely thing they would do is pull up stakes and go to Brazil or West Africa.

NORRIS: People along the Gulf Coast are worried about this moratorium because they're worried about the economic well-being of the region. Let me ask you about jobs here. How many jobs are we talking about per rig, if these rigs pick up and move?

Prof. SMITH: Well, the math is pretty easy, Michele. Anybody can do it. Each of these rigs has a crew of 120 people or so on board at all times. You have two crews because the people don't work, you know, four weeks in a row. They work two weeks and the alternate crew comes on board for two weeks and they go home and rest. And they come back two weeks later and start working again.

So we have 240 official crewmen, if you will, times 34 of these rigs, and you pretty quickly come up to eight or 9,000 people. Then I'd put on that multiplier and I say, well, yeah, but there's three people on shore supporting everyone of those 240 people off shore. So I can, you know, jack it up by a factor of four, if you will.

And when I start talking about the people at the 7-Eleven and the people at the Shell filling station and all of the college professors and everybody else that's involved, I can double it again. So I can very quickly get up into the 50,000 plus category.

NORRIS: Professor Smith, it's clear in talking to you that you don't think that this moratorium is a good idea. But there are real safety questions, particularly in the wake of this BP spill since oil is still spilling into the Gulf.

From what you know about the other 33, 34 rigs that are in the Gulf, what could be done in, say, a six-month moratorium to make sure that the rest of them are safe enough to continue operating?

Prof. SMITH: Well, I think the first thing you could do is take 33 of your inspectors from MMS and put them on board those rigs and say, you have a right to veto any decision that shortcuts the rules that exist.

I mean, part of the issue here is that the MMS has not been, in my view, properly funded to inspect everything all the time. So they have tended over time to put most of their regulatory, you know, scrutiny on the smaller players who are less adequately financed and perhaps less attention to the majors like the BPs and the Shells and what have you.

NORRIS: Professor Smith, it's been good to talk to you. Thank you very much.

Prof. SMITH: Well, Michele, I've enjoyed it.

NORRIS: That was Professor Eric Smith. He's the associate director of Tulane University's Energy Institute.

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