50,000 jobs could be lost or moved out of U.S. as drilling moratorium hits energy industry

The environmental aspect of the gulf oil spill has been grabbing all the headlines. But in Houston, where the energy industry drives economic growth, they’re starting to about the jobs that could be lost by the government-imposed, six month drilling moratorium:

Last week, Houston oil field services giants Halliburton Co., with 2,200 workers in the Gulf of Mexico, and Baker Hughes, with 2,000, said they will relocate personnel to other regions while the ban is in effect, and rivals are likely to follow.

In addition, at least two independent oil and gas firms in Houston, Plains Exploration & Production Co. and Newfield Exploration Co., have openly questioned whether they should continue operating in the deep-water Gulf.

And major offshore rig contractors, including Transocean and Noble, said oil companies have invoked forcemajeure provisions to get out of rig-rental contracts in some cases worth up to $500,000 per day. The provisions allow parties to escape contracts after natural disasters, war or other major events that significantly disrupt business.

“Six months could be 50,000 jobs that either people get laid off or redeployed out of the region, which means their money is not being spent here,” said John Hofmeister, former president of Shell Oil, who anticipates a “multiyear setback for hiring, employment and for spending” for the offshore industry.

Beltway ConfidentialenergyOil spillUS

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