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More than once in these posts I've cited the work of Times-Picayune business reporter Rebecca Mowbray. She is deeply knowledgeable in many of the industries that affect our state's economy, particularly energy and insurance. And this Sunday, she drove a stake through the heart of a simplistic talking point at the crossroads where those sectors meet.

It's commonly believed in Louisiana that the president's declaration of a six-month moratorium on new drilling off the state's coast is "a bigger blow than Katrina or the BP spill." Local pols are competing to see who can condemn the moratorium the lousest, shouting to any nearby mic or camera about the jobs it's going to cost.

Not just the predictable Republican corp stooges, either. Unable to find a mic or camera on the weekend, Charlie Melancon wrote an LTE to the Times-Pic Sunday, declaring

Offshore drilling stands at the very foundation of Louisiana's economy, and this fight is too important to be sidetracked by Washington politics or partisan games.

Yes. Washington politics. That buttinsky federal government, perfectly personified in the socialist Dr. Evil, President Obama. He's killing our jobs! Stand at the border with your ear cocked and you can almost hear them:

Point of fact, the president's just momentarily stunning our jobs. The kill needle is next up the chute, gripped in the invisible hand every pol looooooves to kiss: the free market.

Mowbray's article points out what should be obvious to all, particularly to market-lovers: the Deepwater Horizon disaster is going to kill jobs in the drilling sector even if the president lifts the moratorium tomorrow, because the effects of this hell are already being factored into the cost of doing business.

DRILLING INSURANCE COSTS SET TO SKYROCKET
Impact could dwarf moratorium's

Insurance costs for deepwater drilling are poised to rise by as much as 50 percent after the Deepwater Horizon disaster, and the increases are sharp enough that it could make some exploration and production projects too expensive no matter what happens with new regulations in Washington.

. . .

The impact is particularly potent in deepwater, meaning depths of greater than 1,000 feet, the areas of the Gulf of Mexico that hold the most remaining oil reserves.

Drilling in deepwater is more price-sensitive than other types of oil exploration, because it requires expensive state-of-the-art equipment, detailed analysis of hard-to-reach geology and long planning horizons for projects. Many deepwater exploration and production projects are viable only when oil prices are expected to remain high, so increases in the costs of drilling could render some projects unfeasible.

Currently, many oil companies self-insure their wells, or use "captive" insurers, ostensively independent companies whose sole raison d'etre is to act as underwriters for particular companies. With the economic hit of the Deepwater Horizon disaster sure to top even the $10 billion cap that business-friendly Republicans like David Vitter are willing to set for oil hell liability, this in-house insurance will have to be augmented with real coverage from real insurers, kicking the cost of covering wells up by half or more.

The repercussions will mean oil companies will have to make tough decisions on which fields to lease and drill. Economic reality, the unfettered market, will inevitably mean some holes just won't get poked, and the pokers will get fewer jobs. That's how capitalism works, right?

Oh, we have options. We could simply lift the moratorium and allow drilling, in shallow water or deep, with no change in regulations and let stand the $75 million damages cap, in effect telling the oil companies that hells like the Macondo lease blowout are perfectly acceptable, but even the Vitters of the world aren't about to grab a third rail like that. We could embrace a higher cap and tougher regulations and let the price of oil come closer to matching its cost, letting the market function as it was designed.

Then again, for a camera-mad pol, where's the fun--or electoral advantage--in patiently explaining that capitalism really is a game with rules, a game that yields winners and losers?

Really, isn't it ever so much easier to just blame the president?





A very sad postscript: The first link here leads to a diary entitled "Oilies." I wrote it back in May, when the extent of the oil hell was just becoming clear. In that post, I speculated on the possible diaspora of Louisianians left jobless or otherwise unable to continue life here. At the time, I was thinking mostly of people in the fishing, oil and maritime sectors.

Which goes to show Cassandra was an optimist.

Today, GF got an email from her friends at BECA Gallery, an immensely important contemporary art exhibition space that opened in New Orleans after the flood. It reads, in part:

Dear friends and supporters,

We are writing to let you know that we will be relocating our offices, at least temporarily. For the past two months, until the last week of this past May, we were busy viewing new larger exhibition space opportunities here in New Orleans with hopes of locating an intermediate sized space to better accommodate our future exhibitions while working on planning/developing the larger scale BECA ICAD exhibition facility.

On the heels of the closing of our May exhibition 'FUTURE FORWARD', the horrible and catastrophic oil spill disaster in the gulf turned into a personal nightmare for one of our volunteer directors, Melissa Roberts. During the last week of May, Melissa began experiencing a sudden onset of a burning throat and difficulty swallowing whenever she went outdoors. No other symptoms that would be associated with allergies, etc. were present. Since she had experienced allergies in the past, she knew that what she was experiencing was not anything that she had previously experienced. Within the next week we began hearing from dozens of others experiencing the same symptoms here in New Orleans and after contacting both poison control and the LA Dept. of Public Health as well as the LA Dept. of Environmental Quality, she was told, "Your symptoms are to be expected because of the spill and the dispersants and you should stay indoors". Our questions were, "For how long and why is this OK and why aren't there adequate health advisories being dispatched outside of 'stay indoors'? We took a short trip out west for possible relief for Melissa and to our relief and disappointed, she was able to breathe without difficulty the entire time she was away. The difference was enough for us to make an emergency decision to begin a relocation plan until we've learned more from independent scientists about what is actually unfolding.

As the days and weeks began to unfold, the nightmare became all of our personal nightmares with no real action nor solid leadership from the federal government and with criminals left in charge of the crime scene. As we finalize our relocation plans to remove ourselves from what's blowing in from the oil spill, the toxic dispersants and now the massive burn offs, we are learning that hundreds of people along the gulf coast and inland are now experiencing a variety of adverse health effects: http://oilspill.labucketbrigade.org/...

We are remaining hopeful that we will one day be able to return here to New Orleans.  BECA directors and volunteers have made many personal and financial sacrifices since we opened a small gallery space back in Jan. 2008 to help contribute to the renewal of the arts here in NOLA. Being forced out of your home is unfair and unacceptable but we can thank BP's negligence for creating the mess that we all must now deal with in the manner which makes the most sense to each of us individually. Those with pre-existing health problems seem to be having the most problems with the chemicals, etc. in the air. Our volunteer director, Melissa Roberts, who was diagnosed with SLE Lupus 10 years ago, has been forced to stay indoors as much as possible since she first began experiencing adverse reactions the last week of May. It seemed to coincide with the spray area of BP's aerial spraying of the toxic dispersant moving closer to shore, but we have no real way to know for certain.

The changes wrought by The Hell have barely begun. . .

Originally posted to Crashing Vor on Sun Jun 20, 2010 at 09:00 PM PDT.

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