Houma Today reported that steel sheets bound for local shipyards and fabrication shops will no longer come from the Delta Steel warehouse on Railroad Avenue in Morgan City as it will close. Most workers will be laid off.
It is the first of what state and local business leaders fear could be many south Louisiana companies that close in the wake of a federal ban on deepwater drilling. The six month ban, enacted after the April 20th 2010 Deepwater Horizon oil rig explosion that killed 11 workers and started the giant oil leak in the Gulf of Mexico, has been struck down by a federal judge. But the administration is appealing, sowing uncertainty about the near term future of oil and gas exploration in the state.
Mr Bob Lewis assistant general manager at Delta Steel said that "Somebody had to be first. If this continues for six months, we'll certainly not be the last ones."
Mr Lewis said that Delta Steel's leased 68,000 square foot building will revert back to its owner and all the equipment will be transferred to sister offices across the country. The decision to close was made three weeks ago.
US President Mr Obama announced on May 27th 2010 a ban on drilling in waters deeper than 500 feet with the aim of giving an appointed commission time to research the causes of the explosion, review safety standards and make recommendations. But a federal judge has overturned the ban and now the issue is being appealed by the federal government, which could take months to resolve.
Ms Jane Arnette executive director of the South Central Industrial Association said that "I feel as though everyone in the business is in a hold pattern and rightfully so because no one knows what’s going to happen."
The SCIA and other business groups, as well as state politicians, have rallied against the ban, saying it will devastate the region’s economy. But some politicians and organizations in other parts of the country have said the ban is a prudent move in light of the catastrophic consequences of the well explosion. They’ve said the country should move toward renewable energies, a leap local business leaders say will not happen overnight.
Ms Arnette said that "The fact is our nation is dependent on oil and until another modality of service is created and executed, oil is still a prime commodity for this nation."
Mr Lewis said that Delta Steel, which is part of Reliance Steel and Aluminum, set up shop in Morgan City because of the area's strong footing in the oil and gas industry. He added that "And we did well until the economic slowdown, starting in 2008 and hit hard in 2009. Things had gotten kind of tough, but they were looking up."
(Sourced from www.houmatoday.com)
