There is no shortage of work these days for Bay Ltd., which specializes in repairing offshore oil and gas platforms. The trouble is, the same hurricanes that slammed the Gulf of Mexico’s energy infrastructure and created this extra business also upended the company’s southern Louisiana workforce.
“If we had more people, we could definitely get more work,” said Mark Comeaux, manager of Bay’s fabrication plant in Belle Chasse, La., south of New Orleans. Comeaux, who lost half of his 80-person crew after Hurricanes Katrina and Rita, said employees moved or found better- paying jobs once federal reconstruction funds began flowing.
Enough work, not enough workers – a familiar refrain among companies supporting the gulf’s oil and gas industry. It underscores one of several major problems the industry faces as it struggles to rebuild a complex web of platforms, pipelines and processing plants before the next hurricane season arrives.
With demand outstripping supply for inspection and repair crews, supply ships and power tools, the price for all of them is going up. Also on the rise are wait times for much-needed oil- field services and equipment as competing producers sign longer-than-usual contracts to avoid finding themselves at the back of the line.
“There’s so much work down here for diving, it’s unbelievable,” said Jeff Sikut, president of Avondale, La.-based J&J Diving, an underwater pipeline-inspection and repair company that is turning away two to three potential new customers a day.
Sikut said he would love to hire 50 more divers and take on more work but that the available labor pool is shallow, and those who would consider relocating to southern Louisiana often can’t find reasonably priced housing.
Labor and housing aren’t all that’s scarce. Sikut said projects have been slowed by the shortage of hydraulic and pneumatic tools – a byproduct of soaring construction demand throughout the Gulf Coast – as well as a tight market for the jet pumps used to move sand to bury pipelines.
Even when all the best crews and equipment are available, it is slow going.
“There are boats sunk everywhere. Platforms were mangled, and the pipelines look like spaghetti,” Sikut said.
To be sure, oil and gas producers have made significant prog ress in restoring production in spite of these challenges.
Still, about a quarter of the gulf’s daily oil output, and one- fifth of its natural-gas output, remains off-line, and the progress is expected to slow in the months ahead, a trend that could keep upward pressure on energy prices.
Todd Hornbeck, chairman and founder of Covington, La.- based Hornbeck Offshore Inc., said that if current weather patterns persist and more oil and natural-gas drilling occurs in the gulf, the industry may find itself in a “perpetual repair cycle.”
However, Hornbeck said the current labor crunch shouldn’t come as a surprise. It is partly a reflection of the industry’s history of boom and bust cycles, whereby employees laid off during periods of low energy prices move on to other skilled professions and do not return.
