"In addition,' he said, 'I know of three rigs that have been scrapped in the past year because of a lack of employment in the Gulf. They had been stacked for about two years and the owners, facing an expenditure of a half-million dollars each to repair them without customers in sight, simply made a business decision."

"For most drilling rigs, a team of 20 to 25 men is required to keep it operable. These include the drill crew, the welders, mechanics, caterers, etc. Each rig had two complete complements or teams, each working one week on and one week off.

"ABOUT 350 IDLE

"This adds up to as many as 350 men for the seven rigs now standing idle, but the problem does not end there.

"When the rigs are drilling, men and supplies are transported to the rigs in specialized boats which are leased from boat service companies. The boat service companies, in turn, employ operators, mechanics, and office personnel. Then, there are the supply companies that deal in mud, explosives, casings and the various other types of equipment that go into offshore drilling. There are also diving firms, food catering businesses, and scores of other businesses all directly related to the operation.

"When rigs become idle, there is a corresponding decrease in the demand for supplies, for boats, for food.

"The smaller companies feel the pinch first; for purely economic reasons, they are the first to have to let employees go. The largest companies, especially those with international operations, are able to shift employees around.

"Although it is difficult to pinpoint the number of men who may now be affected, it is a situation that many expect to become very apparent as the offshore activity continues to decline.

"OBVIOUS CONCERN

"In a city such as Morgan City, the concern is obvious. As the hub of the offshore industry, it would be the most directly affected area in the state. But spokes run from the hub. Rig workers and other connected with the offshore industry come from as far away as Alabama, Mississippi, Arkansas, Texas and Oklahoma, and from towns in Louisiana all along the coast and inland.

"In nearby Terrebonne Parish, it is estimated that as much as 70 per cent of the economy may be dependent on the petroleum industry. In that parish alone, some 267 firms are engaged in the oil business, and these firms employ nearly 12,000 persons. They have a combined income of $102 million, more than 50 per cent of all personal income in the parish.

"Of the top 20 taxpayers in the parish, 17 are oil companies.

"To the west of Morgan City is Lafayette, another city that has seen and felt and continues to feel the impact of the offshore oil industry.

"RECENT SURVEY

"Lafayette is surrounded by some of South Louisiana's largest and richest oilfields and most productive offshore installations.

"A recent survey of 14 oil and oil-related companies in Lafayette shows that when they first located there, 43.2 percent of their business was devoted to offshore activity. Today, the same companies devote 73.1 percent of their energy toward the oil-rich bottoms off the Louisiana coast.

"But Lafayette, unlike Morgan City—which is almost wholly dedependent on offshore activity-has onshore oil activity to fall back on when there is an offshore curtailment.

"ONSHORE BOOM

"We're not depressed on balance,' says Joe B. Clarke, Jr., a Lafayette businessman and chairman of the petroleum committee of the Lafayette Chamber of Commerce.

"He says that while offshore activity has declined, some of the oil companies' money that was earmarked for offshore exploration had been rechanneled into onshore exploration. As a result, there is a boom of sorts in onshore activity.

"But it's not a legitimate boom,' explains Clarke. 'It's simply something that has resulted from the inability of oil companies to buy offshore oil leases last December. When the lease sales are resumed, I think, this somewhat inflated onshore activity will return to normal. Still, we are fortunate that it is still economically feasible to look for reserves onshore here, because if it wasn't the money from the oil companies would have gone to other regions.'

"He says there is some unemployment, but only in the sense that some drilling companies are not working as regularly as they would like. However, some effect will be felt, he says, when the land leased in the 1970 sale has all been drilled.

"SUMMARIZES

"In Houma, R. V. Pierce, an oilman and chairman of that chamber's petroleum committee, summarizes Terrebonne's situation as follows: "It's hurting some of the service companies. There have been some layoffs, and some companies are carrying some people they don't need. And the postponement really upsets long-range plans. Once there has been a shutdown of sorts offshore, you can't just push a button and start up again; it takes time.'

"He says that many oil-related companies such as fabrication plants and marine repair yards are utilizing the slack period to do repair work, but he emphasizes that once this work is done, and unless the lease sale picture is definite, the employment picture could change."

[From the Times Picayune, Apr. 7, 1972]

"OIL INDUSTRY PUTTERING ALONG AT GREATLY REDUCED CAPACITY

("By Clarence Doucet)

"MORGAN CITY, LA.-There are at least a dozen fabricating plants in the Morgan City area employing some 2,000 people. The head of the largest operation says new jobs for bidding are off 75 per cent.

"H. W. 'Bill' Bailey, vice-president of J. Ray McDermott Co., Inc., and head of the McDermott Fabricators facility here, says:

"Last year we were bidding at least three jobs a week. Now we're lucky if we can bid three jobs a month.'

"He attributes it to the uncertainty of the offshore oil lease sale. ""The oil industry is not in a very rushed state,' says Bailey. 'It is puttering along at 65 to 70 per cent capacity onshore, and even less than that offshore.'

"The head of another fabricating plant puts it this way:

""The amount of construction work offshore is way off. All the pipeline is tied up in the yards. Once offshore exploration work stops, everything in the industry begins falling like a set of dominoes.'

"It is in the Morgan City area fabricating plants that the giant drilling structures and production platforms are constructed. Some of the companies, aware of what happened to the industry in 1970 because a 1969 offshore lease sale was postponed for more than a year, have attempted to diversify their operations.

"At present the fabricating yards are generally busy, but this is due principally to backlogs and construction projects not necessarily connected with the Louisiana offshore industry.

"For instance, the Bayou Black Division of Avondale Shipyards, Inc., is building three semi-submersible self-propelled drilling platforms that are committed to the North Sea.

"McDermott Fabricators had a multi-million dollar backlog of domestic and foreign construction.

"Smaller companies are not as fortunate.

"EXPECTS TROUBLE

"Says one official of his plant:

"Right now our fabricating yard is doing well and we will be busy until late summer, but if there is no lease sale by late summer, then we might be headed for a period like we had last year when we were in serious trouble.'

"At the present time, this official said, his company is bidding on work for delivery up to November. As far as later decisions regarding 'reducing overhead," he said this would have to be considered if lease sale prospects do not improve.

"We will attempt to remain at full force as long as we can without reducing overhead. In 1970 we tried to keep as many employees as possible.'

"There will definitely be a pinch for most plants. The degree of pain will vary.

"DATE MENTIONED

"The earliest date mentioned for the next sale is late summer. If it is held then, say in late August, it would be in late January or February, 1973, before the oil producers would be asking for construction. bids on offshore production platforms. And it would be months later before fabricating plant work would begin peaking.

"Thus, those companies with enough work to see them through the late spring of 1973 remain in fairly good shape as far as a late summer, 1972, sale is concerned. But, if additional problems arise and the sale is postponed again, then a very serious industrywide work slump could present itself next year.

"Kenneth Dupont, Avondale vice-president and head of the company's Bayou Black Division, says:

"Many peoples' memories are short-lived regarding the proposed early 1969 sale and the postponements that led to the situation in 1970. There was a shortage of work that is almost indescribable, and it all stemmed from the failure to hold an orderly and timely lease sale.'

"FIRE AND SPILL

"The early 1969 lease sale was first postponed because of the Santa Barbara incident and the situation became more aggravated by the Chevron Oil Co. fire. Some say there were serious political implications connected to the moratorium.

"When the moratorium continued,' explains Dupont, 'we noticed our work starting to decrease gradually, and we could see a real economic slump coming.'

"The sale was finally held in December, 1970, but in the 12 months preceding the sale the fabricating plants had suffered because of a severe shortage of work.

"It was the Spring of 1971 before the plants were able to begin construction stemming from the 1970 sale, and that construction now is almost all completed and delivered.

"FORCE DECREASES

"Because of the industry-wide slump for fabricating plants in 1970, the Bayou Black Division work force dropped from an average high of 560 just prior to 1970 to some 390, a reduction of over 30 percent in personnel.

"It was such a shock that we have tried to diversify the nature of the type work we were doing, but it is not easy to take facilities designed primarily for the offshore oil industry and convert them.'

"To bridge the gap between the slowing down to work generated by the December, 1970 sales, and what was expected to be the peaking of work generated by the proposed December, 1971 sale, Avondale bidded on and was awarded contracts for the three semi-submersible self-propelled drilling platforms. Now, because of the postponement of last December's sale, the long-range picture changes somewhat.

"Dupont agrees that new sizable jobs for bidding are off as much as 75 percent.

"Speaking of the industry, he says that if the lease sale is further postponed into 1973, fabricating yards will be competing 'for every bread crumb.'

"Competition would become fierce, he adds, as companies weighed how badly they wanted to retain employes versus margin of profit. "Without timely and orderly sales, he said, a yo-yo policy develops in which businesses tend to gamble with investments and then try to recoup their investment and make a profit as soon as possible. This, in turn, drives costs up, and in the oil industry, the higher costs paid by the oil producers are passed on, as in any industry, to the consumer. "As there are about 2,500 products currently produced wholly or in part from petroleum, what goes on in a fabricating yard in this south Louisiana offshore oil center as far as costs are concerned can ultimately affect the pocketbooks of people all over the country."

[From the Times-Picayune, Apr. 8, 1972]

"SOUTH LOUISIANA WORKING MAN HAS STAKE IN LEASE SALES

("By Clarence Doucet)

"To the working man in South Louisiana who earns his living from the offshore oil industry, environmental efforts that affect or threaten his family's finances are difficult to equate with being in his interest. "One industry official put it this way:

"I think we have to pursue a rational course, and this means developing our resources in an orderly, timely fashion in accordance with our environment. But we must maintain economic stability, and the economic progress we've made should not have to come to a screeching halt.'

"On the environmental question, another man who earns his living from the offshore oil industry said:

"The fish and fur people go to bat for us. Edible and sports fish are being caught in greater numbers, and a lot of the increase in fishing is due to the better transportation into the oil field canals because that's where the fish are. There may be some ecology problems related to commercial fishing, but on the whole the fishing industry supports us." "An oysterman in Terrebonne Parish says there have been some changes to the ecology of the marshlands, but he says he is confident the two industries-fishing and oil-can co-exist.

"We are constantly learning more and more about how to operate without creating real problems,' says another offshore oil industry official.

"In the end, irregular sales of offshore oil leases affect the working man whose livelihood depends on the industry.

"The oil companies look for stability that comes from regularly scheduled lease sales, but as one oil company official said:

"No matter how irregular the sales may be, we can't afford to stay out despite the problems. When the sale is held we will be there and after the sale, exploration and development drilling will take place even if it means hauling in equipment from all over the world. These things will be done. A real problem with this on-again off-again policy is the impact it has on the South Louisiana working man who is cast in an economy of feast and famine.'

"The point is, he explains, that the more than 67.000 people who are dependent on the offshore oil industry in South Louisiana want stability and security.

"What becomes important is not so much what he pockets this year as what are his expectations about next year,' the official said.

"The working man who wants to buy a new car or purchase a home must base his decision on the stability of his paycheck. If the lease sales are not held regularly, then the working man does not have that security.

"Another factor that enters the picture because of the irregularity of recent sales is it causes a lot of workers to look elsewhere for jobs,