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Vol. 231 No.7 |
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| GUEST COLUMN, BILL COATES, PETROLEUM EQUIPMENT SUPPLIERS ASSOCIATION |
An open letter to Secretary Salazar
In its 77 years in existence, PESA has never written an open letter to a government official. But I felt the letter below to the Secretary of the Interior was necessary given the immense threat to our membership—companies and suppliers that directly and indirectly support the employment of more than a million people. While teams are working around the clock to contain and stop the oil spill, decisions by our government are setting a potentially grim future for workers in the Gulf of Mexico.
It is my belief that ordering a six-month deepwater drilling moratorium as a result of one accident is equivalent to painting a picture with one broad brush. Risks are different with every well; for instance, most rigs that were drilling in deep water were not working on wildcat wells as was the Deepwater Horizon. After the April disaster, every single deepwater rig in the Gulf passed an inspection of its blowout preventer. Simply put, is it truly just to blanket an entire industry based on one rig?
June 28, 2010
The Honorable Ken Salazar
Secretary of the Interior
U.S. Department of the Interior
Dear Secretary Salazar:
The Petroleum Equipment Suppliers Association (PESA) represents 190 companies, some big, some midsize, and some small. We supply the equipment, the technology, and everyday services and supplies that are needed to produce oil and gas. With few exceptions, these are American-owned and operated companies rooted in the Gulf Coast. PESA member companies employ more than 400,000 people, have 200,000 suppliers and support directly or indirectly more than 1 million jobs. We operate in 37 states and nearly every major technological advance that has impacted the oil and gas industry in the past 30 years has originated from within a PESA member company.
Like everyone, we are shocked and saddened by the Deepwater Horizon accident and want the leak stopped and oil cleaned up as soon as possible. We believe that effective and timely improvements in tsafety systems can be put in place to ensure that such an accident does not happen again.
In response to the Deepwater Horizon event, however, the Department of Interior (DOI) instituted an offshore drilling ban for all wells in water deeper than 500 feet. We understand the circumstances that led to the moratorium, but are concerned that inadequate time and analytical effort was spent understanding its consequential impacts. While the Gulf Coast states of Louisiana, Texas, Alabama, and Mississippi will see an immediate impact through the loss of industry jobs, our country will suffer from delayed and lost production of oil and gas as well as the potential movement of critical industry talents to overseas opportunities. Make no mistake, the experience and technical abilities of the oil and gas workers of the Gulf Coast are world class.
Layoffs have already started and many of our companies simply do not have the resources to survive a six-month drilling ban. In short, American oil and gas production—its jobs and tax base in tow—will be compelled to move overseas, and perhaps permanently so. There are simply too many jobs and too many American companies at stake to leave a broad offshore drilling ban in place.
We urge the DOI to reconsider both the scope and purpose of the deepwater moratorium and are willing to discuss reasonable alternatives that allow our member companies to put people back to work.
Sincerely,
William Coates
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The moratorium further threatens our industry because we just don’t know when it will be over. While currently set at six months, it seems as if the government is treating this as an open-ended problem. How are companies expected to plan around such uncertainty? Aside from the possibility of companies redeploying assets overseas, what about all of the jobs that are left in limbo?
People living in the Gulf states—and I mean those with oil in their backyards—are asking for the moratorium to be lifted. They recognize that the long-term effects of the moratorium on their local economies will be devastating. People unaffected on a daily basis by the oil spill, i.e., those in non-Gulf states, want the moratorium. I see this mismatch as a big problem that has to be considered by policy makers.
Here at PESA, our deepest condolences go out to the people most affected by the Deepwater Horizon accident—those who lost loved ones in the tragic event. I ask Secretary Salazar to consider the consequences of the 1 million-plus people affected today, tomorrow and in the coming years by his decision. It is not about 3,000 jobs. It is about saving the livelihood of the Gulf of Mexico petroleum industry. 
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THE AUTHOR
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Bill Coates is the current Chairman of the Petroleum Equipment Suppliers Association, and Vice President of Sales and Marketing for Schlumberger. Before assuming that position in January 2010, he served as the company’s President for North America, in which position he was responsible for strategic direction of business operations in the US and Canada. He previously held positions at Schlumberger as GeoMarket Manager of Schlumberger Oilfield Services’ Gulf of Mexico operations, IT and E-Commerce Coordinator for Oilfield Services and Manager of the Austin Product Center. Mr. Coates began his career with Schlumberger in 1988 as a Wireline Field Engineer at Houston Offshore. He holds a degree in mechanical engineering from Virginia Tech University.
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