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U.S. Sen. John Cornyn, R-Texas, and Houston area Congressman Pete Olson, R-Texas, will be in the Houston area Tuesday, July 6, to take a firsthand look at the impact the deepwater drilling moratorium is having on local small businesses, jobs, the Houston economy, and the nation’s energy security.
The two lawmakers will begin the day with a tour of the Noble Danny Adkins drilling rig in the Gulf, roughly 220 miles south of Houston. This new, state-of-the-art, semi-submersible rig has received all of its safety permits from the U.S. Coast Guard and other entities but is unable to begin intial drilling operations until the moratorium is lifted.
Industry sources say that if the moratorium continues to be enforced, operators who lease units such as this under long term contracts may be forced to consider relocating these rigs abroad. Given the lengthy process involved in such a relocation, they say, it would be likely the rig would not return to domestic waters for quite some time, if at all.
Roughly one-third of domestically produced oil originates in the Gulf of Mexico, and 80 percent of that oil is produced by deepwater rigs – or rigs located 1,000 feet or deeper. Olson’s office said the current moratorium halts drilling operations on 33 deepwater rigs in the Gulf—threatening as many as 400 jobs per idle rig directly and countless more onshore service jobs needed to support drilling operations. All told, employee wages lost as a result of the moratorium could be more than $165 – $440 million per month, according to the congressman’s sources.
Following the rig tour, Cornyn and Olson will visit the Houston suburb of Stafford, where small business Sunbelt Machine Works Corp. manufactures tools for the oil and gas industry and stands to suffer layoffs and significant setbacks due to the moratorium. Family-owned Sunbelt Machine Works currently employs a staff of 70. Sunbelt has already been forced to cut back hours and productivity as a result of the moratorium. Cornyn and Olson will tour the facility and host a media availability Tuesday afternoon.