US Gulf workforce stretched as storm season looms

By Jeffrey Jones

NEW ORLEANS (Reuters) – With the next storm season looming,
the U.S. energy industry is stretched thin as it struggles to
rebuild Gulf of Mexico output from the ravages of hurricanes
Katrina and Rita amid surging prices, officials said.

With oil supply and demand in tight balance, segments of
the energy service and supply sector are having difficulty
keeping enough workers on the job to move equipment and finish
restoring platforms and pipelines in the key producing region.

The big thing is to keep crews working steadily, as many
oil workers deal with rebuilding their own homes and
neighborhoods that were hit hard by Katrina and Rita last
autumn, said Ken Wells, president of Offshore Marine Services
Association, headquartered in the New Orleans area.

“With the existing work force going through what everyone’s
gone through down here, companies have had to be very flexible
about giving employees ample resources to help get them through
their problems,” Wells said, adding many workers are trying to
keep in touch with families displaced by the hurricanes and
dispersed throughout the country.

Of the 55,000 people who work in the Gulf energy sector,
the majority live along the coastlines of Texas, Louisiana,
Mississippi and Alabama which got hammered by the hurricanes
last August and September.

There are about 4,000 offshore platforms in the Gulf and
dozens of refineries onshore. The area accounts for 30 percent
of U.S. oil production and 20 percent of natural gas output,
and much of the infrastructure was damaged by the hurricanes.

As Hurricane Katrina made landfall on August 29, 2005, 95
percent of oil and 89 percent of natural gas production in the
region was shut down, prompting prices to briefly pass $70 a
barrel for the first time.

And less than a month later, Hurricane Rita forced shut all
oil production and 80 percent of gas output in the Gulf.

According to the U.S. Minerals Management Service’s most
recent figures, 23 percent of U.S. Gulf crude production and 14
percent of the gas output is still off-line. About 5 percent of
the region’s refining capacity is still down.

Oil prices, meanwhile, have surged again. They settled up
98 cents at $70.30 a barrel on Monday, within sight of last
August’s $70.85 record.

In the first few months after the hurricanes, OMSA’s member
companies, which operate vessels that ferry supplies and people
to and from offshore sites, lost entry-level deckhands to
higher-paying reconstruction work onshore. But that has leveled
off, Wells said.

Much of the work done offshore, such as fixing production
platforms or laying pipeline on the ocean floor, requires
specialized skills, so onshore rebuilding is not sapping all
the workers, said Denise McCourt, director of the general
membership segment for the American Petroleum Institute.

“I would say that in some arenas we are competing for work
force that is being pulled to do all these other things, but
the other thing is that we’re competing, for example, to get
parts,” she said. “The challenge for our industry is to get the
parts made and have the skilled labor force that does that kind
of work.”

That includes making such specialized items as helicopter
pads and living quarters for platforms.

Wells also said the Coast Guard, its own coastal resources
stretched thin in the aftermath of the storms, faces a backlog
in dealing with certification for mariners sorely needed
offshore as the June 1 start to the hurricane season looms.

Its New Orleans regional exam center, the busiest one in
the country, was flooded by Katrina and thousands of
certification files on seamen were destroyed, he said.
Officials are working out of temporary offices.

“There are companies that have vessels tied to the dock
because they can’t find mariners, which is really ironic given
the need,” Wells said.