[Senate Hearing 111-1153]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 111-1153
 
THE DEEPWATER DRILLING MORATORIUM: AN ECONOMIC DISASTER FOR LOUISIANA'S 
                            SMALL BUSINESSES 

=======================================================================

                                 FIELD
                                HEARING

                               BEFORE THE

            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                            AUGUST 17, 2010

                               __________

    Printed for the Committee on Small Business and Entrepreneurship


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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                     ONE HUNDRED ELEVENTH CONGRESS

                              ----------                              
                   MARY L. LANDRIEU, Louisiana, Chair
                OLYMPIA J. SNOWE, Maine, Ranking Member
JOHN F. KERRY, Massachusetts         CHRISTOPHER S. BOND, Missouri
CARL LEVIN, Michigan                 DAVID VITTER, Louisiana
TOM HARKIN, Iowa                     JOHN THUNE, South Dakota
JOSEPH I. LIEBERMAN, Connecticut     MICHAEL B. ENZI, Wyoming
MARIA CANTWELL, Washington           JOHNNY ISAKSON, Georgia
EVAN BAYH, Indiana                   ROGER WICKER, Mississippi
MARK L. PRYOR, Arkansas              JAMES E. RISCH, Idaho
BENJAMIN L. CARDIN, Maryland
JEANNE SHAHEEN, New Hampshire
KAY HAGAN, North Carolina
           Donald R. Cravins, Jr., Democratic Staff Director
              Wallace K. Hsueh, Republican Staff Director



                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Landrieu, Hon. Mary L., Chair, and a U.S. Senator from Louisiana.     1
Vitter, Hon. David, a U.S. Senator from Louisiana................     9

                               Witnesses

Davis, Lori, Owner, Rig-Chem, Houma, LA..........................    11
Goodson, Charles, Owner, Charley G's Restaurant, Lafayette, LA...    17
David, Dewitt, Commercial Real Estate Broker, Van Eaton and 
  Romero.........................................................    21
Cloutier, Troy, Regional President, Midsouth Bank................    28
Angelle, Hon. Scott, Lieutenant Governor, State of Louisiana.....    32
Chabert, Hon. Norbert N., Louisiana State Senate, District 20....    52
Champagne, Hon. Simone B., Louisiana House of Representatives, 
  District 49....................................................    57
Williams, Hon. Arlanda, Council Chairwoman, Terrebonne Parish 
  Consolidated Government........................................    58
Matte, Hon. Timothy, Mayor, Morgan City, LA......................    65

          Alphabetical Listing and Appendix Material Submitted

Angelle, Hon. Scott
    Testimony....................................................    32
    Prepared statement...........................................    35
    Response to post-hearing questions from Chair Landrieu.......   125
Chabert, Hon. Norbert N.
    Testimony....................................................    52
    Prepared statement...........................................    54
Champagne, Hon. Simone B.
    Testimony....................................................    57
    American Energy Alliance Report: ``The Economic Cost of a 
      Moratorium on Offshore Oil and Gas Exploration to the Gulf 
      Region''...................................................    80
    E-mail from Heidi Martin.....................................   108
Cloutier, Troy
    Testimony....................................................    28
    Prepared statement...........................................    30
    Response to post-hearing questions from Chair Landrieu.......   122
David, Dewitt
    Testimony....................................................    21
    Prepared statement...........................................    23
Davis, Lori
    Testimony....................................................    11
    Prepared statement...........................................    14
    Response to post-hearing questions from Chair Landrieu.......   116
    Deep Water Activity..........................................   132
    Shelf Activity...............................................   133
    Deep Water Work History......................................   134
    Revenues.....................................................   135
    Moratorium Effect on Rig-Chem, Inc...........................   136
    Graph of Moratorium Effect on Rig-Chem, Inc..................   137
Freyou, Ernest
    Letter.......................................................   138
Goodson, Charles
    Testimony....................................................    17
    Prepared statement...........................................    19
    Response to post-hearing questions from Chair Landrieu.......   120
IHS Global Insight
    Special study................................................   110
Landrieu, Hon. Mary L.
    Opening statement............................................     1
    Prepared statement...........................................     5
    Fax letter from experts and attachment.......................    73
Mason, Joseph R.
    Report.......................................................    90
    Prepared statement...........................................    40
Matte, Hon. Timothy
    Testimony....................................................    65
    Prepared statement...........................................    69
Miller, Mark K.
    Prepared statement...........................................   140
Randolph, Charlotte
    Response to post-hearing questions from Chair Landrieu.......   130
Report
    Potential Economic Impacts of Proposed Increases in 
      Regulation and Taxes on Deepwater Drilling in the Gulf of 
      Mexica.....................................................   111
Tea Party of Lafayette
    Press release................................................   144
Vitter, Hon. David
    Opening statement............................................     9
Williams, Hon. Arlanda
    Testimony....................................................    58
    Prepared statement...........................................    61


THE DEEPWATER DRILLING MORATORIUM: AN ECONOMIC DISASTER FOR LOUISIANA'S 
                            SMALL BUSINESSES

                              ----------                              


                        TUESDAY, AUGUST 17, 2010

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                     Lafayette, LA.
    The committee met, pursuant to notice, at 10:02 a.m., in 
Suite 209, Louisiana Immersive Technologies Enterprise (LITE), 
537 Cajundome Boulevard, Lafayette, Louisiana, Hon. Mary L. 
Landrieu (Chair of the committee) presiding.
    Present: Senators Landrieu and Vitter.

 OPENING STATEMENT OF THE HON. MARY L. LANDRIEU, CHAIR, AND A 
                  U.S. SENATOR FROM LOUISIANA

    Chair Landrieu. If everyone would take their seats, I would 
like to thank you for coming. I am pleased to be here, and I 
have been particularly pleased to chair the committee the last 
year and a half.
    I will start with opening statements, as is our custom, and 
then we will go to our panelists and have five minutes of 
questions with a second round, if necessary.
    I want to begin by saying, first of all, thanks to the LITE 
Center for having us and also for Mark Miller and Brian Hanks, 
who helped, with the help of the Chamber and many other 
organizations, to put out the notice for this hearing. We are 
very, very grateful.
    A hundred-and-twenty-one days ago, the Deepwater Horizon 
explosion 50 miles off the coast of Louisiana took place. It 
took the lives of 11 men and sent an estimated five million 
barrels of oil spewing into the Gulf of Mexico, onto our shores 
and into our marshes. This accident has threatened our 
environment, our economy, and our way of life. The Macondo well 
may be capped, but the crippling economic impacts caused by 
this disaster and the ensuing moratorium continue to impact our 
communities in substantial negative ways.
    Louisiana's families and businesses are getting hit on two 
fronts. First, our seafood industry, which accounts for roughly 
40 percent of the lower 48's production, is suffering from both 
actual impacts from the spill and no less damaging the 
perception that our seafood is no longer safe. Shrimping season 
opened today. We are going to do everything we can to talk 
about how fresh and flavorful our Gulf shrimp are.
    Secondly, our offshore energy exploration industry and 
hundreds of businesses that support it have been put in 
jeopardy by the heavy hand of the Federal Government. 
Regrettably, the Administration reacted to the Deepwater 
Horizon tragedy by halting all deepwater exploration activities 
in the Gulf and canceling the scheduled Western Gulf lease sale 
which would have occurred this month. While some very limited 
shallow water drilling is underway in the Gulf, only two 
permits have been granted since April 20, and all deepwater 
drilling has been brought to a complete standstill as a result 
of this ill-conceived action.
    The decision to stop virtually all new energy exploration 
in the Gulf was uninformed, in my view, and it borders on 
reckless. Today, thousands of Gulf Coast businesses are 
fighting their way out of this government-imposed economic 
disaster that not only threatens our jobs and businesses, 
including the oil and gas field, transportation, fabrication 
companies, hospitality, and restaurants, but it also threatens 
our way of life just as surely as the massive oil spill did and 
perhaps even more.
    This Administration's decision to halt drilling activity 
did more than threaten the livelihoods of rig workers and oil 
service crews. It substantially reduced general economic 
activity throughout the Gulf region. We will hear testimony 
today that will highlight the hardships and challenges that 
this moratorium has imposed on Gulf Coast small businesses.
    While we are here today to discuss the moratorium's 
economic impact on local and regional economy, we cannot ignore 
the consequences to our environment and our national security, 
and I would like to address both just briefly.
    The Administration's stated goal of this moratorium is to 
protect the environment. I believe the action to impose this 
moratorium has actually increased environmental risk to our 
oceans and coastal wetlands, and this is why. The United States 
continues to consume 20 million barrels of oil every day. It 
did so the day before the Deep Horizon explosion and it is 
doing so today as we meet here at the LITE Center. Therefore, 
by stopping all new drilling here at home, offshore drilling in 
the Gulf, which is virtually shut down, the U.S. will 
necessarily increase oil imports from other countries with far 
weaker environmental standards than our own and regulatory 
regimes that do not function as well as ours. In countries like 
Niger, Angola, and Venezuela, the record shows that these 
countries suffer significantly more spills at a much more 
frequent rate, causing more harm to the world's oceans, not 
less.
    In addition, all of that oil must be tankered into U.S. 
ports. While tankers are much safer today than they were before 
the Exxon Valdez spill, the fact is that prior to the Deepwater 
Horizon, the record will show that spills from tankers were 
four times more volume and frequency than spills from the 
drilling rigs themselves.
    The negative impacts of the moratorium on national security 
should also not be overlooked. The U.S. demand for oil will not 
decline simply because Gulf Coast exploration has been shut 
down. This means that less oil used by Americans going forward 
will have been produced by Americans and more will have been 
produced offshore and imported to our shores. As we all know, 
some of these imports will invariably come from hostile 
nations, or nations hostile to U.S. interests. In 2008 alone, 
Americans transferred nearly $700 billion overseas to pay for 
oil imports. That number, in addition, will increase as future 
Gulf Coast production lags due to the long-term effects of this 
ill-conceived moratorium. This is a blow also to our national 
security, and one that we could do without.
    At a hearing I chaired in Washington, DC, last month 
through the Small Business Committee, we heard testimony from 
Louisiana State University Professor Joe Mason who said that 
under the current moratorium, the Gulf Coast region will lose 
more than 8,000 jobs, nearly $500 million in wages, over $2.1 
billion in economic activity, as well as nearly $100 million in 
State and local revenue. The moratoria's spillover effect could 
mean 12,000 jobs and nearly three billion nationwide, including 
almost $200 million in Federal tax revenues just in the first 
six months. This is a very serious issue, not only related here 
in Lafayette Parish and in this region, not only to the State 
of Louisiana, but to the nation as a whole. According to Dr. 
Mason, if the moratorium lasts longer, some 25,000 jobs could 
be in jeopardy, and we will hear from our panelists along those 
lines today.
    Another expert from a research firm, from Dun and 
Bradstreet, estimated that in Lafayette Parish alone, 780 
businesses employing close to 10,500 people could be negatively 
affected. Businesses here in Lafayette are some of the hardest 
hit, which is why I chose this site and this venue for this 
important field hearing today.
    Consider what we know. Idling deepwater rigs that were 
permitted to drill in the Gulf will immediately impact crew 
members, as many as 46,000 directly. According to the Gulf 
Economic Survival Team, which is represented here today by 
Lieutenant Governor Scott Angelle, and, I might add, has been 
ably represented by him, it says that the long-term job loss 
could reach 120,000 by 2014.
    While Gulf waters may be clouded by oil in some spots, the 
data that we are accumulating against this moratorium is 
crystal clear. We cannot close down the Gulf offshore oil and 
gas sector without devastating economic impacts to our region, 
increased environmental risk to our ocean, and weakening our 
national security.
    I think it is noteworthy that the Administration was forced 
to revise its stand in July after a Federal court decision 
ruled that its action was without solid legal basis. As one of 
the first Senators to call for a full investigation into the 
accident and request more effective safeguards against future 
spills, I share the Administration's goal of a safer oil and 
gas industry. We all do, but this blanket moratorium will not 
help us achieve or advance that goal.
    The fact is that Louisiana's coastline is a working coast 
that brings the country an abundance of energy, seafood, and 
provides navigation assets for commerce for the world. The 
Mississippi Delta is our home, and there is no one who wants 
drilling to be safer than we do, no one who wants the water to 
be cleaner than we do, and no one that wants the seafood to be 
fresher than those of us that serve it and consume it in our 
restaurants daily.
    I am confident that we can strengthen the safety record of 
Gulf drilling as we move forward while promoting a balanced and 
diversified economic future. But we also know that any hope for 
a prosperous future will be challenged by a prolonged 
suspension of deepwater drilling.
    We will hear today from grocery store owners, restaurants, 
real estate companies, and local banks and other small 
businesses that have been directly and negatively impacted by 
this moratorium. Our Federal Government has a responsibility, 
particularly in these difficult times, to make sure that these 
paychecks do not turn into pink slips. In this hearing today, 
we will build a strong case for lifting this moratorium now, 
and that is the purpose of this hearing, to hear directly from 
small businesses that are being adversely affected about this 
ill-conceived and heavy-handed action by the Federal Government 
that does not, as I have said already, and it is worth 
repeating, does not meet our environmental needs, our national 
security needs, and it most certainly does not meet our 
economic needs. It fails on every test.
    I believe this Congress needs to hear these stories of 
these small businesses, and I am very proud that my committee 
will be able to supply this for the record, and this record 
will stay open for two weeks. We invite all those in attendance 
to submit any written comments they feel perhaps were not given 
on the record today.
    I also want to take a moment to introduce a person that is 
here at my request, and I want you all to be polite. Mark Doms 
is the Chief Economist at the Department of Commerce. Mark, 
would you stand up just so people can recognize you? He is here 
to listen to this testimony. He is one of the lead officials 
that will be making the report to the President in September, 
and we hope that the report will lead to a lifting of the 
moratorium.
    I am committed, along with members of the Gulf Coast and 
our delegations, both Republican and Democrat are united across 
the board, from Texas to Louisiana to Mississippi to Alabama, 
to get this message out so this moratorium can be lifted.
    I was proud to introduce legislation in the Senate this 
month that will lift the moratorium and build on the work of 
others, most notably Representative Melancon in the House that 
has gotten the House on the record, both Democrats and 
Republicans, against this moratorium.
    If the Gulf Coast is going to recover from this nightmare, 
it will be because of the health and production of coastal Main 
Street small businesses that support the production of energy 
that fuels our nation. We cannot continue to support a policy 
that will close the doors on small businesses in Acadiana, in 
Louisiana, in Texas, or for that matter, throughout the United 
States.
    So I thank you all very much for being here. I now turn the 
opening statement over to Senator Vitter, a very strong member 
of our committee. Thank you, Senator.
    [The prepared statement of Senator Landrieu follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
OPENING STATEMENT OF THE HON. DAVID VITTER, A U.S. SENATOR FROM 
                           LOUISIANA

    Senator Vitter. Thank you. Thank you very much, Mary, and 
thanks for all your work chairing this committee, particularly 
on this topic. And as you mentioned, this is really a 
continuation of a hearing we had in Washington and it is a 
very, very important discussion.
    I also want to thank our hosts here at LITE and ULL and 
certainly our panelists and everyone for being here.
    As Mary said, the bottom line is real simple, and 
unfortunately, very stark. It is great news that the oil flow 
has stopped and the ongoing environmental damage is beginning 
to lessen. But the economic threat continues worse than ever 
because of this moratorium. And the bottom line is simple. If 
this moratorium continues even a few more months, we will lose 
more jobs because of it than we will lose from the oil itself 
and it will be devastating economically in the midst of the 
most serious recession since World War II.
    Also, as Mary suggested, it is not just the formal 
moratorium in deepwater. It is really somewhat of a broader 
discussion. Obviously, the formal moratorium in deepwater is 
perhaps the most serious and offensive thing we are here 
talking about. It is very serious. It is costing us a lot of 
jobs. Those major platforms, major investments are moving to 
other parts of the world as we speak.
    At the same time, there is a de facto moratorium in shallow 
water, as Mary noted. The Administration says there is no 
moratorium in shallow or ``open for business'' or ``open to 
issue'' permits. Great. Then you ask the obvious follow-up 
question, how many new drilling permits have been issued in 
shallow water since the Deepwater Horizon explosion, and the 
answer as of three weeks ago was zero, and the answer as of 
today is two. That means there is a de facto moratorium in 
shallow. That means because of the complicated, cumbersome, 
uncertain nature of the new rulebook even in shallow, even 
shallow is pretty much shut down.
    And then there is a third component to the threat, which is 
the new regulatory environment we are going to be going into 
which could continue this virtual shutdown even after formal 
moratoria are lifted. Just yesterday, the Interior Department 
issued a new policy moving away from the so-called categorical 
exclusion for Gulf drilling under NEPA that has been in place 
for decades. What this means is that every new project, every 
new well, will have to go through many more hoops of 
environmental review, even though the basic issues are the same 
throughout the Gulf, which is what led to the so-called 
categorical exclusion before.
    There is already an environmental review for every new 
project. For the Deepwater Horizon incident, there were five 
levels of NEPA work. There were nine comprehensive supporting 
environmental studies. Many of those were inadequate. I am not 
arguing that. But to add layers upon layers upon layers to that 
five-plus-nine is not protecting the environment any more. It 
is making many drilling projects completely unsustainable 
economically, and I think that is what the environmental left 
has in mind, quite frankly, pushing this ending of the 
categorical exclusion. So that is a big threat.
    What is at issue, as I said, as Mary said, is an enormous 
number of jobs and enormous amounts of economic activity. A 
recent study by IHS Global Insight, for instance, put some 
concrete, verified numbers on that. Independent oil and gas 
companies in the Gulf account for about half of the nearly 
400,000 jobs, $70 billion of economic value, $20 billion in 
Federal, State, and local revenue generated by the industry 
just in 2009.
    That same study says that if this policy or something like 
it continues into the future, by 2012, we could lose hundreds 
of thousands of jobs in the Gulf. It would also cost government 
major revenue, over ten years, $147 billion in Federal, State, 
and local revenue from the Gulf region. So there is a lot at 
stake for the country and for Louisiana.
    Again, I am eager to hear from our witnesses.
    In closing, let me say that, again, just like in our 
Washington, DC, hearing, I am very disappointed that our 
witnesses don't include any representative of the Obama 
Administration. In that Washington, DC, hearing, Mary and I 
both invited the Administration to send a representative to lay 
out the case and the economic analysis for the moratorium. They 
sent no one, complete, utter silence.
    For today, I again specifically invited the Administration 
to send a representative as a witness to testify, to lay out 
the case for the moratorium and their economic analysis. Again, 
they sent no one as a witness. I am happy Mark is here from the 
Commerce Department. What I, at least, requested--Mary probably 
did the same thing--is a witness to testify, to lay out the 
case, to lay out the reasoning that led to this draconian 
action, and they sent no witness. We are still waiting to hear 
the justification. The people of Louisiana are still waiting to 
hear the justification.
    But with that, I very much look forward to hearing from our 
witnesses. Thank you, Mary.
    Chair Landrieu. Thank you, Senator Vitter.
    We are going to begin with a terrific panel of witnesses 
that both of us have asked to testify. They represent, I think, 
a broad swath of business owners in this region. Of course, we 
could have filled up this room ten times over with businesses 
that are affected, but we are really very grateful to those of 
you that have prepared testimony in such a comprehensive way to 
help us build a Congressional record to get this moratorium 
lifted.
    We would like to begin with Ms. Lori Davis, who is 
President and co-owner of Rig-Chemical, Inc., a small family-
owned company located in Houma. Rig-Chem was founded in 1980 as 
a specialty chemical manufacturer distributor servicing the oil 
and gas industry. Lori is an active member of Petroleum 
Engineers and a member of American Association of Drilling 
Engineers. Thank you, Ms. Davis, for being here.
    Next, we will hear from Charlie Goodson, a very famous 
Lafayette leader. He has owned Charley G's for now, I think, 
celebrated, what, 25 years, Charlie? All of us have eaten at 
this wonderful restaurant. He also has a great deal of 
experience with other restaurants in the area, from Cafe 
Vermilion to Hub City Diner, and he is really an outstanding 
member of this community and we thank you, Charlie, for being 
here.
    Our next witness is Dewitt David, Commercial Sales Manager 
for Van Eaton and Romero Realtors here in Lafayette. He is 
very, very active in the community. He is Chairman of the 
Commercial Real Estate Committee and Realtors Association of 
Acadiana. We want people to understand this goes well beyond 
oil field service companies and the negative impacts that are 
being felt.
    Mr. Troy Cloutier serves as Senior Vice President, Regional 
President for MidSouth Bank. As a Regional President, his area 
includes Houma, Thibodaux, Morgan City, and Lafayette. Bankers 
like Mr. Cloutier are in a particularly front-row seat to see 
what is happening in this region and we are very grateful for 
you to be here, Mr. Cloutier.
    Because Scott Angelle's presence is required in North 
Louisiana--work never ends for our Lieutenant Governor--we have 
pushed him up to our first panel, and he will be the last 
panelist. Lieutenant Governor Scott Angelle from Breaux Bridge 
has been serving as Lieutenant Governor since May. Prior to 
that, he served as the Secretary for the Department of Natural 
Resources that has the jurisdiction over, of course, drilling 
here in our state. He is extremely knowledgeable and he leads 
our state's efforts right now to overturn the moratorium with 
the Gulf Economic Survival Team. Many organizations are a part 
of that effort, and he has been the leader of that. He is a 
graduate right here of Lafayette and a former President of St. 
Martin Parish.
    Lori, why don't we start with you? We are going to limit 
opening statements to five minutes. If you can shorten them to 
four or five, we will go through each and then have a series of 
questions for you.
    Ms. Davis.

      STATEMENT OF LORI DAVIS, OWNER, RIG-CHEM, HOUMA, LA

    Ms. Davis. First of all, I would like to say thank you to 
Senator Landrieu and Senator Vitter and for everyone here 
today.
    Today, I would like to paint for you a picture, a picture 
of a real American dream. During the oil crisis in 1984, when 
over 50,000 people left the industry----
    Chair Landrieu. Lori, pull the microphone closer to you, 
down, if you could. There you go.
    Ms. Davis. When my father, who had worked for an oil field 
service company for 21 years, was forced into early retirement 
at the young age of 50, with no formal education and a $25,000 
severance package that was given to him for his 20-plus years 
of experience, he took a chance, with my mother's support, to 
live a dream and buy into a small business. What he didn't 
realize at the time was that it would become a family business 
and would support his daughters, grandson, niece, and later a 
daughter-in-law, all as employees of the company now known as 
Rig-Chem.
    Picture today, 26 years later, we are in a very similar 
place. I, Lori Davis, co-owner of Rig-Chem, and my sister, 
Penny Molina, have no formal education. We are both close to 
the age my father was in the early 1980s and now being forced 
not into early retirement, but possibly out of business, and 
not by market demand, but by a Federal Government who is taking 
control of our industry and offering no help but to possibly 
force us all into unemployment, which is not the severance 
package I had hoped for and worked so hard to build. All of 
this because the government feels that one company's mistake 
should be borne by an entire industry that has operated safely 
and never had anything like this happen before in the Gulf of 
Mexico.
    We have been a company that was debt free, never had to 
borrow money to operate, never had to lay anyone off, always 
had paid a good income to our 17 employees, 14 that live in 
Louisiana, two in Texas, and one that lives in Maine. We offer 
our employees 401(k) matching of four percent. We have given 
profit sharing of 11 percent yearly per employee. And we pay 
100 percent employee health benefit, dental, disability, and 
life insurance, along with two weeks of paid vacation.
    We are now facing the worst year in the company's history, 
with six-figure losses and the reality that we can only hold on 
until December without having to take drastic measures, such as 
layoffs and pay cuts. This is hard to believe, but this is what 
the moratorium has done to Rig-Chem, an American dream.
    The only people that will profit from this tragedy will be 
big business. They are the only ones that can survive during 
this type of crisis. They have huge resources, established 
international divisions, bank support, government connections, 
and deep pockets with no real loyalty to employees, only to 
stockholders. Once this is all done and the moratorium lifted, 
they will emerge that much better, and they now have reduced 
competition due to this arrest in our industry forcing small 
business closures and access to our best employees.
    Small business is usually quick to react to change. That is 
why we have a niche in most markets. Small business can make 
things happen because we are the decision makers. We keep 
markets competitive. We employ and train talent that allow them 
to focus on their job, not corporate culture.
    Unfortunately, small businesses, the moms and pops of the 
industry, will not survive this moratorium if it is not lifted 
soon. To add insult to injury, we are receiving daily news of 
price increases on our core materials with concerns of 
shortages due to production changes, all of which are being 
driven by the fear of what will happen as the price of oil 
continues to rise, our demand for foreign oil increase, and the 
uncertainty of U.S. oil production and its future.
    Another blow to our industry is that our insurance company 
is not sure what will happen. As a business, we have to be 
profitable, which means we have to operate on budgets. But with 
all the uncertainty caused by the moratorium, it makes it very 
hard to project the budget. We are being asked to review MSA 
agreements with many clients and now being offered new 
agreements that have language included which there is no 
insurance coverage available, at least not to small business.
    The next hurdle we will have to endure is directly related 
to safety. We already work in an environment that adheres to 
high standards when it comes to safety and performance. We will 
be asked to comply and should to the new requirements that will 
be placed as a result of this incident, which will add yet 
another financial burden.
    Our picture is not unique. Most small business owners are 
in the same situation and may be some without the fortunate 
reserves to continue to battle through this lockdown and have 
nowhere to turn but to bankruptcy or foreclosure. We need help. 
We need to go back to work and be assured that we will have the 
support and commitment from our industry and legislators to 
help keep the American dream alive.
    This is not what my parents planned for our future, nor is 
it the one I planned for my son. Thank you very much.
    [The prepared statement of Ms. Davis follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. Thank you.
    [Applause.]
    Mr. Goodson.

 STATEMENT OF CHARLES GOODSON, OWNER, CHARLEY G'S RESTAURANT, 
                         LAFAYETTE, LA

    Mr. Goodson. Senator Landrieu, Senator Vitter, and members 
of the Senate committee, thank you for allowing me to testify 
before you today and thank you for holding this hearing. I 
appreciate the opportunity to tell my story of the possible and 
very probable effects of the continued deepwater drilling 
moratorium.
    My name is Charlie Goodson, owner with my wife, Del, of 
Charley G's Restaurant. We have been in the restaurant business 
for over 30 years and I have operated Charley G's concept for 
the last 25 years.
    The Louisiana restaurant industry is the largest private 
sector employer in the State, 145,000 people directly and 
another 70,000 people indirectly. The restaurant industry in 
Louisiana has had to overcome some significant challenges in 
the last five years, Hurricanes Katrina and Rita in 2005, Ike 
and Gustav in 2008, and five years and a national recession 
later, things are finally looking up for Louisiana restaurants. 
Along comes the BP oil crisis. The deepwater drilling 
moratorium will cripple Louisiana's economy and force many 
restaurants to lay off workers or even close their doors.
    Traditionally, summer is a slow season, and combined with 
another hurricane season, times could not be more desperate. 
Owning a restaurant in Louisiana has been a roller coaster 
ride, with some terrific highs and some soul-searching lows. 
With only what I can describe as a stubborn will to stay in 
business, we have survived. In the mid-1980s during the oil 
bust, it was particularly hard for Louisiana restaurants and 
our city. We pulled out all the stops, any marketing strategy 
we could think of. For a time, we ran a promotion, lunch for 
two for the price of a barrel of oil. I served lunch for two 
for $5.40, definitely not a profitable situation.
    With the deepwater drilling moratorium of six months, I 
believe we are headed back to those struggles, those economic 
times. As small business owners, we hang on economic decisions 
made by others that can take us down in a matter of months. We 
work hard at our business and we budget our sales every year on 
a day-to-day basis. This year, I budgeted a seven percent net 
income before taxes. We probably will do somewhere between four 
and five if we don't have any major problems. This moratorium 
could be that major problem and put us into negative for the 
year.
    Our management team, my daughters and my wife have started 
to prepare our company for a major slowdown if there are jobs 
lost in the oil industry in our area. Our first line of defense 
would be a hiring freeze, then a salary freeze, then a halt on 
all leasehold improvement. Our second tier of defense would be 
to discontinue our lunch service. By discontinuing lunch, we 
will be able to eliminate six kitchen positions, four service 
staff positions, and one manager. That represents 25 percent of 
my entire staff, 11 jobs in one small local restaurant.
    Our daughters are now at the age where they will be getting 
involved in the management of our family business. We hope to 
pass this healthy and growing business on to them. The 
moratorium casts big doubts over the future of this small 
business.
    Each and every one of us understands the importance of safe 
offshore drilling to prevent another spill such as the April 20 
explosion of BP's well, not to mention the devastating loss of 
life. However, reckless shutting down of the industry will 
result in a tsunami sized wave of economic impact on the other 
industries in Louisiana.
    Thank you, Senator Landrieu, Senator Vitter, for allowing 
me to speak today.
    [The prepared statement of Mr. Goodson follows:]

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    Chair Landrieu. Thank you, Mr. Goodson.
    [Applause.]
    Mr. David.

 STATEMENT OF DEWITT DAVID, COMMERCIAL REAL ESTATE BROKER, VAN 
                        EATON AND ROMERO

    Mr. David. Well, good morning, and also, thank you for 
allowing me to be here to share my thoughts on the impact of 
the moratorium on the local real estate market.
    After receiving the invitation to speak with you this 
morning, I spoke with dozens of real estate agents, investors, 
developers, and others involved in our real estate community 
and all agree that this moratorium is having a devastating 
effect on their business. I would like to share a few quotes 
with you from some of the individuals that I spoke with.
    First, a couple of residential agents. ``I had a ready, 
willing, and able buyer under contract to purchase. Given the 
moratorium and rumblings at his job about cutbacks, he walked 
from the contract.'' Another said, ``My phone quite literally 
quit ringing when the moratorium was announced. Three clients 
who were on the verge of buying decided to sit tight. They were 
concerned about whether or not they would have jobs in a year, 
and if they did, whether the job would be based in Acadiana.''
    The vast majority of residential sales are reported to our 
local MLS and there are some disturbing numbers which may 
illustrate the impact that the moratorium has had on our 
residential market. If you compare the residential pending 
sales, which some people call ``under contracts,'' for the 
period June 1 to August 13 of this year, which I call the basic 
moratorium period, with last year, we find, I think, some 
startling numbers.
    Last year during that period, 565 families made a decision 
to buy a residential property. Through that same period this 
year, what I call the moratorium period, that 565 dropped to 
437. That is a 22 percent drop in the number of people who made 
a decision to buy a residential property, and there is no doubt 
since the moratorium went into effect, buyers are taking a 
waiting and see attitude before they purchase a home. What is 
interesting, this is in spite of the fact that interest rates 
are near all-time lows and home prices in the past several 
months have gotten to be pretty competitive. And, of course, 
our local commercial market is also showing some signs of 
slowdown.
    Since much of our commercial market is not reported to a 
central database, it is difficult sometimes to quantify exactly 
what effect the moratorium is having on the market. But I spoke 
to dozens of commercial agents in our area and all agree that 
since the moratorium has been in effect, we have seen a drastic 
drop in our business and it also seems that it is close to 
being at a standstill.
    Now, our industry, the commercial real estate market, is 
heavily dependent on the oil industry. These folks lease and 
buy hundreds and hundreds of industrial facilities from here to 
New Iberia to Houma and they occupy thousands and thousands of 
square feet of our office space. I would like to share with you 
a few comments from a couple of our commercial brokers.
    ``I was working with an investor from a major city to buy a 
very large apartment complex here in Lafayette. He states, `No 
go until the moratorium is over and the economy back in 
check.''' Another said, ``I lost a sale to an oil field service 
company for a tract of land. The contract was signed. They were 
in their due diligence period. Then the moratorium was 
announced. They canceled the agreement and said because of the 
moratorium, they no longer had a need to expand.''
    A study that was just completed by the Louisiana Realtors 
Association projects that the Deepwater Horizon catastrophe 
will result in an initial loss of commission income to South 
Louisiana Realtors of over $6 million from May to April of next 
year. It also cautions that the effects could possibly spread 
over many years and impact our real estate market for years to 
come. And note this includes only the projected lost commission 
income for the spill. This does not include what we assume is 
surely coming, a loss of revenue from the moratorium.
    So both in the areas in our local market of residential and 
commercial, the phones just aren't ringing and we hear clients 
saying they are cautious, they are afraid, they are uncertain. 
The perception is that the worst is yet to come, and there are 
very few people out there in a position to make a commitment on 
a long-term real estate deal not knowing what our economy will 
bring.
    Many of us here remember the oil bust in the mid-1980s. The 
reality was, we were all in the oil business, but we didn't 
realize it until that bust hit us right in the face. Home 
builders, electricians, plumbers, grocers, beauticians, 
restaurant owners, dance instructors, you name it, we all 
depended then and we still do on the jobs that are generated by 
this great industry.
    We have all heard the numbers, that for every one job on a 
deepwater drilling rig there are eight conciliary jobs. But I 
contend there is a much greater impact than those numbers 
indicate. The rig workers, their eight supporting workers and 
the companies they work for are now carefully analyzing their 
spending habits.
    The bottom line is this. The moratorium is not just on the 
drilling and the jobs supporting that drilling. The moratorium 
is a strain on everyone in our area. It is critical to our 
economy that the ban on deepwater drilling be lifted 
immediately so the air of uncertainty and fear that is hanging 
over our heads be removed.
    Senators, I urge you to bring back to Washington our 
message loud and clear. Lift the moratorium. Thank you.
    [The prepared statement of Mr. David follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. Thank you.
    [Applause.]
    Thank you, Mr. David.
    Mr. Cloutier.

 STATEMENT OF TROY CLOUTIER, REGIONAL PRESIDENT, MIDSOUTH BANK

    Mr. Cloutier. Good morning, Senators Vitter and Landrieu. 
Thank you for this opportunity, and also, Mark from the 
Commerce Department, thank you for taking time out of your 
schedule to come here.
    My name is Troy Cloutier. I have worked at MidSouth Bank 
for over 18 years. MidSouth Bank is a $950 million bank 
headquartered in Lafayette, Louisiana. MidSouth is one of the 
biggest users of SBA programs in the State, so we thank you for 
your work with SBA that you have done over the past few months.
    MidSouth is an oil and gas bank with numerous lines of 
credit extended to companies to pay their daily expenses during 
payroll, insurance, payables, and other expenses that arise 
during a business cycle. We also do boat loans, equipment 
loans. Currently, 32 percent of our portfolio is in the oil and 
gas industry or commercial and industrial, so we are the people 
who lend to the oil and gas people.
    Right now, we have $80 million in loans in the South 
Region, which consists of Terrebonne, Lafourche, and St. Mary 
Parishes. Over the past few months, we have seen an increase in 
companies using their lines of credit for oil field cleanup. We 
have seen boats that we couldn't get to work go to work because 
of the cleanup. Because of these issues, we have increased in 
loans $11 million since March of this year. So you can see that 
oil companies are currently--the service companies are 
currently working, or have been working because of the clean-
up.
    Going forward, though, we see businesses being very nervous 
about what is going to happen in the oil industry. Because of 
the moratorium on deepwater drilling, some of the big companies 
are going overseas because they have the financial resources to 
do so. The smaller companies, however, like the seven that I 
put in business over the past five years with SBA loans, are 
very fearful that work will dry up when bigger companies move 
overseas and hire other providers. They are holding on to their 
money and making sure that they do not buy any new equipment or 
have any additional expenses that might compound their problem 
once a slowdown occurs.
    During the moratorium, they have already--before the 
moratorium, they have already scaled back where they could just 
because of the slowdown in the economy today. They have laid 
off people and do not plan on hiring them back anytime soon. I 
have talked to a machine shop owner the other day and he told 
me that him and his wife will work the machine for the next six 
months and not hire any new people. He has let five people go 
since the beginning of the year and does not have any plans to 
hire any of them back.
    Because businesses are trying to prepare for new 
regulations when the moratorium is lifted, some of the business 
owners fear that the cost of doing business in the Gulf will 
skyrocket, and not just the deepwater operations. So they are 
holding on to their cash now. They are worried about the 
profits of their business going forward, so they are taking 
care of their families first. Many of them just recovered from 
Hurricanes--not Hurricane Katrina, but Gustav and Ike, which 
hit the area very hard, and now are faced with this. We hear so 
much about Hurricane Katrina, but we do not hear anything about 
the other hurricanes that devastated the areas below New 
Orleans.
    I have talked to oil field executives the other day who 
pointed out the irony of the fact that businesses moved to the 
Gulf the last few years because of the political landscape 
here. Now they are moving out of the Gulf because of the 
political landscape here.
    Those who will be hurt the most are the employees, who are 
already leveraged as much as they can be financially. Many of 
the employees were working 50 to 60 hours a week a year ago and 
now they are being laid off today. They have seen a decrease in 
salaries just because of the overtime not there, and today, 
they face the layoff ahead of them. They cannot get home loans 
today because of the regulations. I personally just moved into 
a house and the mortgage process was a nightmare, and I have 
great credit. So that is why they are not buying as many 
houses.
    Consumers have a lot of credit card debt. Most consumers 
today have a very high debt-to-income ratio, so it is very hard 
for them to get credit today. It is easy to say that they 
should have done a better job managing their finances, but the 
fact of the matter is, they live paycheck to paycheck and they 
do not have any money in reserve to pay for being laid off in 
the next 30 to 90 days. The only way they can make it is to get 
credit cards from the big banks.
    Many of them do not have the skill to go get another job. 
They come out of college and they see that they can make 
$60,000 to $70,000 a year in the oil field and that is what 
they go to do. This is what they want to do, and we ask you to 
put them back to work.
    On behalf of community banks, I would like to urge both of 
you to get with BP, ask them to put their money, their $20 
billion in local community banks because that will be the banks 
that will help the communities and the businesses go forward. 
So I ask you to get with them to put the money in community 
banks. And I also urge you to continue your work on the jobs 
bill, Bill 5297. I know you all have worked very hard on that. 
That is key for community banks to start lending again to 
companies like Lori Davis's and others out there. The community 
banks will be the ones to come in and help these companies in 
the future.
    So thank you for what you all have done today and I will 
answer any questions.
    [The prepared statement of Mr. Cloutier follows:]

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    Chair Landrieu. Thank you very much.
    I have already sent a letter to the Administration and BP 
asking them to put those deposits into local banks along the 
Gulf Coast, which would make a lot of sense, and I hope that 
that is exactly what will happen.
    Now we will hear from Scott Angelle.

STATEMENT OF HON. SCOTT ANGELLE, LIEUTENANT GOVERNOR, STATE OF 
                           LOUISIANA

    Mr. Angelle. Good morning, Madam Chairlady and Ranking 
Member Vitter. I bring greetings to you from Governor Bobby 
Jindal and the men and women of Louisiana who have been working 
for the past 120 days to restore our way of life. I thank you 
for bringing this hearing of the Senate Committee on Small 
Business to Louisiana, which proudly holds America's most 
prominent oil and gas economy.
    Since oral testimony is limited to five minutes, I will 
offer brief comments and introduce a few faces of the 
moratorium to make certain the public record reflects that this 
policy is a burden imposed mostly on the middle class of 
America.
    I thank each of you for your public service and your 
continued interest in a strong, safe domestic oil and gas 
industry. I say strong and safe because that is what we have 
been about and are about in the Gulf of Mexico, with a proven 
track record of nearly 50,000 wells drilled over the last 60 
years. The issuance of a six-month moratorium on deepwater 
drilling is an overreach, not necessary, and has been deemed 
arbitrary and capricious by the Federal courts.
    Not only did five of seven of Secretary Salazar's experts 
chosen to review his safety study publicly oppose the 
moratorium, saying, quote, ``it will not measurably reduce risk 
further and it will have a lasting impact on the nation's 
economy,'' but in addition, at least five independently 
conducted studies, referenced in my written comments previously 
submitted, forecast a huge negative impact on the small 
businesses of America. I am not speaking of the stockholders of 
BP, Conoco, Shell, Exxon, or Chevron. I am speaking of the 
middle-class American men and women who work on the drilling 
rigs, the ones who put on their hardhats and steeltoed boots, 
kiss their families goodbye for weeks at a time, and do the 
tough work of exploring the energy to fuel America.
    But that is not all. The companies that employ welders, 
fabricators, diesel mechanics, pipefitters, boat captains, and 
forklift operators are seeing a decrease in business. And that 
is not all. The companies that employ hotel workers, retail 
clerks, auto mechanics, restaurant workers, and caterers are 
impacted. And that is not all. The banks, auto dealers, and 
real estate folks are feeling the pressure, I might add, 
probably the three industries that have most been discussed on 
Capitol Hill, the banks, auto dealers, and real estate folks, 
and we are at a time having a disconnected policy in South 
Louisiana relative to those industries.
    I have said before, this moratorium is not about big oil. 
It is rather about the Calais, the Sheramies, Depueys, the 
Roberts, the Boudreauxes, and the Thibodauxes [ph.], just a few 
of the South Louisiana middle-class families that have taken 
the risk, borrowed the money, created the jobs, paid the taxes, 
found the energy, built our economy, and have done nothing 
wrong, and yet find themselves in the bullseye of this poor 
public policy to shutdown deepwater drilling.
    [Applause.]
    But don't just take my word for it. Todd Citron of Hub City 
Ford reports a 20 percent drop in sales of both new and used 
cars since the moratorium. Flo Meadows, a Lafayette realtor, 
reports that she has had more commercial contracts dropped 
before closing in the last five months than in the the last 
five years combined. Ken Veron, who employs 38 workers in his 
family-owned Cafe Vermilionville restaurant, reports his 
holiday event schedule is normally booked at this time by oil 
field service companies with deposits in hand. Today, he does 
not have a single oil field service company booked for a 
holiday event, and two other energy companies have recently 
canceled events.
    Layoffs are happening all around us for all the wrong 
reasons. This comes at a time when our nation has invested 
nearly $800 billion in stimulus funding to boost the economy 
and create jobs, yet we still have an unacceptable unemployment 
rate. There is not one shred of evidence of systemic failure 
for operations in the Gulf of Mexico, yet we are being treated 
with a one-size-fits-all approach. We certainly have the 
wherewithal in America to immediately institute enhanced safety 
practices if we are serious and have a sense of urgency about a 
strong and safe domestic oil and gas industry.
    So the rest of the country can be clear that there are real 
people impacted by this moratorium, allow me quickly to 
introduce you to a few great Americans, to Dustin and Gwen Guy 
[ph.], a family from Broussard. Neither are employed in the oil 
and gas business, but because Dustin's employer, a flooring 
contractor, has experienced a slowdown in work from oil and gas 
companies, they have been forced to cancel their home building 
plans, an example of a cascading impact on the economy.
    Bayou Country Harley-Davidson--since the moratorium, owner 
Mike Bruno's stores in Slidell and Houma have seen a 38 percent 
decrease in sales revenue and a reduction in net operating 
profit in excess of $400,000. He has eliminated all 
advertising, reduced inventory, and laid off 14 of the 
employees pictured here.
    From Cut Off, Kirk and Sheila Rouse and their six children, 
ages six to 17, Kirk is the owner/operator/truck driver and 
terminal manager hauling offshore equipment and earning 
commission for the loads he transports. The dramatic increase 
in work since the moratorium has the Rouse family unsure of how 
they will send their oldest son, a heart patient, to college 
this fall because now they can't afford to pay health insurance 
premiums.
    Dwayne Webstock invested $3 million in a Port Fourchon 
multi-service dock facility that opened less than three months 
before the moratorium. Since then, he has laid off 30 of his 
employees and made other cutbacks, and he has attempted to find 
work not related to the oil and gas industry just to keep his 
doors open.
    Again, thank you Senators Landrieu and Vitter for having me 
here today, for your extreme leadership and your courage in 
continuing to fight, and with your help, Louisiana will not 
give up on this fight, not today, not tomorrow, not ever. Thank 
you very much.
    [Applause.]
    [The prepared statement of Mr. Angelle follows:]

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    Chair Landrieu. Thank you, Lieutenant Governor. We 
appreciate your leadership on the coalition.
    I understand you may have to leave, and just excuse 
yourself when you do--we were happy to accommodate your 
schedule--we are going to ask the panel a few questions and 
then move to our second panel. Lieutenant Governor, let me 
start with you.
    We have gotten a terrific response throughout Louisiana for 
overturning this moratorium, and I think because of the work 
that we have all done, that message clearly is getting out to 
our state. The issue is how to get it out around the nation. 
You have traveled to Washington. You have been meeting with 
other delegations. Could you give us some insight into how the 
committees have been receiving the testimony that you have 
given here and if you feel like we are making some progress or 
not in getting this message out around the country, and not 
just to other delegations, but to other cities and elected 
officials around the country?
    Mr. Angelle. Certainly, my concern is that we are talking 
to only our friends. Certainly, our folks in Texas and 
Mississippi certainly understand what it is that we are doing 
here and we have attempted to reach out to as many folks across 
the nation. I would tell you that my observation is that many 
folks across the nation do not have a full understanding of the 
value of what happens in the Gulf of Mexico, and we will only 
know that value when they begin to see energy prices rise 
because of the lack of production that will come from this 
moratorium and the cascading impact of the regulations that we 
believe are coming as the other shoe drops.
    Certainly, we have worked with the National Association of 
Counties. You have perhaps received a resolution. The National 
Association of Counties, representing counties across America, 
has adopted a resolution opposing the moratorium. We have seen 
manufacturers across the nation opposing this.
    However, I am concerned that America does not yet 
understand that what happens in the Gulf of Mexico is so 
important to the daily lives of the families of America. Fully 
a third of the oil and gas production comes from the Gulf of 
Mexico and 90 percent of it comes from deepwater wells. We will 
do everything we can to continue to get that message across. 
Again, I think there are some biases. Somewhere along the way, 
the oil and gas industry helped to create a strong America and 
somebody hijacked that message and began to convince people 
that what we were doing was somehow dirty and not American and 
nothing could be further from the truth.
    Chair Landrieu. Thank you very much.
    Could you also comment--I am going to move to others for 
questions--the meeting that I was able to help establish with 
you and Michael Bromwich about three weeks ago in Washington. 
The meeting went on for eight hours, I understand. Was any 
progress made in terms of the shallow water regulations, 
because you all were getting down into some real detail about 
how to move that forward? Is there anything you would like to 
report here on that?
    Mr. Angelle. I would like to say, to borrow a phrase, I 
think the spirit is willing, but the flesh is weak, and what I 
mean by that is I get into meetings and we hear about the 
things that we are trying to get done from a shallow water 
perspective, but the proof is really in the numbers and there 
have only been two wells, in fact, two new permit for gas 
wells, relatively low-risk wells, that have been issued. We 
continue to grind, and in ways that I have never seen before.
    We hosted a meeting here last week at the LITE Center with 
operators doing everything we can, sharing best management 
practices, trying to put the kind of things that we can in 
front of the regulators. There is a strong disconnect between 
the home office and the regional office. There is a culture of 
fear within the Bureau of Ocean Energy. There is a feeling that 
to do the work that both the President and the Secretary have 
said is legal in America, to drill for shallow water--to issue 
shallow water permits, we believe that there is a fear in that 
agency. There is a culture of better to not issue a permit than 
to issue a legal permit and have someone question your job 
performance.
    And, look, it is tough. I served in a position in a 
regulatory environment. It is tough to do this work, but that 
is what the folks signed up for. The work that you--the meeting 
that I think that you hosted did help us identify the issues. I 
thank you for that. And I think we are moving in a direction to 
get shallow water permits. I think we are in the red zone, if 
you will allow me to borrow a sports analogy, but we need to 
push it over the end zone, over the goal line, in a relatively 
soon manner.
    Chair Landrieu. And finally, I just want to be clear that 
while the official moratorium is for deepwater drilling and 
there were about 33 rigs with, I think I understand, four 
additional that were on the way when this happened, into the 
Gulf, that what we are hearing, the testimony is that for all 
practical purposes, drilling in the entire Gulf, including the 
shallow, is shut down. So I hope the members that are 
representing the Administration here put that into their 
calculations. It is not just the deepwater drilling.
    Let me ask one final question to the panel and I will turn 
it over to Senator Vitter. For all of you, it is important, and 
I think, Charlie, you hit the nail on the head when you said we 
didn't know we were all in the oil business, but when the crash 
happened in 1980, we figured that out. I mean, I can remember 
what a ghost town not only Lafayette, the West Bank of Orleans 
and Jefferson felt like, Iberia, Vermilion, Lafourche, 
Terrebonne. I mean, it was like the movies with the sagebrush. 
You got that feeling going through a lot of our neighborhoods. 
It doesn't quite feel like that yet, but we are getting sort of 
the first ripples of it.
    Can you describe--you described for your restaurant, but if 
each of you would just take 30 seconds and talk about one of 
your suppliers or one of your neighbors or someone that is 
related that is being negatively affected so we can get as many 
stories on the record as possible, if something comes to mind. 
I don't know, Charlie, do you want to start?
    Mr. Goodson. Right off the top of my head, speaking with 
Gerald Breaux over the last few days with the Lafayette 
Visitors and Convention Bureau----
    Chair Landrieu. Speak a little louder, if you could.
    Mr. Goodson. The motel industry in town locally is really 
suffering. The vacationer dollars seem to be there. The tourist 
dollars are still there. But the traveler, the business 
traveler is way, way down, and Gerald told me somewhere around 
25 percent, that the hotel-motel--and that is so directly 
related to us. A business person comes into town to do 
business, entertains their guests, so if they are not coming, 
it also affects my business, as well.
    Chair Landrieu. Mr. David.
    Mr. David. Yes, Senator. We think that it appears that 
somewhere between 16 and 17 agents that we are aware of have 
left our industry since the first of June to find employment 
elsewhere. I mean, you saw the Louisiana Realtors' projections 
that we are going to lose considerable commission dollars in 
the next 12 months. My fear is that we are going to lose good 
people, experienced people that just can't make it unless homes 
and buildings are selling and leasing. So we are beginning to 
see some of the agents seek employment elsewhere.
    Chair Landrieu. Mr. Cloutier.
    Mr. Cloutier. I have customers all the time who say that 
they are laying off and going to continue to lay off, but I 
also deal with mergers and acquisitions and there is a ton of 
banks in the Florida-Alabama area that are failing, and this 
summer was supposed to be their resurrection year. They are 
going down much further than they ever thought they would.
    But I would like to offer a solution, because I don't like 
people coming to my office and throwing a lot of problems on 
the desk----
    Chair Landrieu. Please.
    Mr. Cloutier [continuing]. Without solutions.
    Chair Landrieu. We are looking for them.
    Mr. Cloutier. I was with a retired engineer this weekend 
and he said that he is working harder now than he ever did 
because of all the new regulations. He is having to find ways 
to get the rigs out there. He says he is working six days a 
week and he only wants to work two to three days a week, at 
most, and spend time with his grandchildren after that.
    So I would offer that there are 33 rigs that you said, 
which he said the same number, 33 rigs on the deepwater. If MMS 
would look at hiring two retired engineers to go through the 
processes of these rigs and make sure they are meeting the 
regulations as for the deepwater, and I am sure there are at 
least 66 retired engineers out there that would be interested 
in doing it on a part-time or full-time basis----
    Chair Landrieu. That is excellent, and we have generally 
suggested along those lines a SWAT team concept that Lieutenant 
Governor Angelle and the coalition have pressed the 
Administration to try to put into place and use the experience 
here.
    Ms. Davis, and then I will turn it over to you, Senator 
Vitter. Just another story or two about a supplier or a 
neighbor or----
    Ms. Davis. Well, I mean, we represent--we do business quite 
a bit with companies in Louisiana, but because of the nature of 
our industry, we do have to reach out into other States. I 
mean, 30 percent of revenues for one of the suppliers that we 
do business with that is in Atlanta, Georgia, is being affected 
by the downturn in our purchases. We have another supplier in 
Howell, Michigan, that is feeling the same effects. And it is 
not just Louisiana.
    So when we think about this, it is going to reach further 
and further because that person that is 30 percent down in 
Atlanta, Georgia, is going to have to cut back somewhere in his 
business and some of the things that he is doing. So it is more 
than just a Louisiana problem.
    Chair Landrieu. Thank you for bringing that up, and I think 
that is one of our strategies moving forward, to get these 
small business owners that are outside the Gulf to start 
calling their Congressmen and their Senators and saying how 
they are being directly affected, and I think that is a good 
strategy.
    Senator Vitter.
    Senator Vitter. Thank you, Mary.
    Mr. Lieutenant Governor, I want to go back to the broader 
issue of not just the formal moratorium in deepwater, but the 
de facto moratorium in shallow water and the threat of 
unreasonable regulation. You have been working with us and 
others on this shallow water problem, as you alluded to. 
Secretary Salazar told me that is going to get solved six weeks 
ago. Is that solved today?
    Mr. Angelle. No, sir. The problem is not solved. There is a 
strong disconnect between what home office in Washington, DC, 
is trying to implement and their ability to communicate that to 
regional offices throughout America. There is no question that 
the shallow water fleet is getting stacked by the day. We will 
have fewer shallow water rigs working this week than we had two 
weeks ago, and that continues to be the forecast with the 
uncertainty of these regulations.
    Senator Vitter. Is it fair to say, because shallow water 
rigs and projects are smaller and the lead-in time is much 
shorter--it is something like 30 days in terms of getting a rig 
operating--that the negative economic impact is going to be 
felt even more quickly in shallow?
    Mr. Angelle. That is absolutely right. I think some of the 
issues that you are hearing about, real estate folks and 
banking folks and car dealers and those kind of things, are all 
just tied to some of the poor public policy of not being able 
to communicate what it is that we want in this country from a 
shallow water standpoint. Again, the President and the 
Secretary have both indicated publicly that shallow water 
permitting is a legal business enterprise in this country, yet 
the numbers don't indicate that the government is issuing the 
license to do that.
    Senator Vitter. Right. And just to be clear for the record, 
as of three weeks ago, the number of those new drilling permits 
in shallow since the Deepwater Horizon explosion was zero. As 
of today, it is two. The month before the explosion, for a one-
month period, that number would have been what, I think in the 
40s or 30s?
    Mr. Angelle. That is correct. I think it was upwards in the 
high 30s. So clearly, a significant drop-off, even in spite of 
the fact that it is legal to permit and to prosecute those 
drilling plans.
    Senator Vitter. Now, in this context, it just happened 
yesterday, but do you have any comments or reaction to this 
move by the administration, at least in deepwater, possibly 
broader, to get rid of this NEPA categorical exclusion, to have 
the NEPA process a whole lot more complicated for projects?
    Mr. Angelle. I think it is terrible public policy. It has 
been longstanding public policy in this country between 
Presidents of different parties for a long time to recognize 
the categorical exclusions, that when the Federal Government 
produces its five-year plan for leasing, it takes into 
consideration the activity that goes on in these areas, and as 
a result, companies are then able to use the environmental 
reports the government, in fact, provides to indicate that the 
prosecution of drilling plans is, in fact, synonymous with what 
the Federal Government looks to avoid from an environmental 
standpoint.
    To now have a situation that we are going to roll back 
longstanding policy, at least in the deepwater situation--I am 
not certain yet what kind of impact it has on shallow water, I 
am continuing to follow that--but in the deepwater, this is 
going to be a significant, significant slowdown, even if we 
lift the moratorium early. If we lift it today, we still, as a 
result of this announcement yesterday, are going to have 
significant issues getting permits issued in a shorter period 
of time.
    Again, the fact that five out of seven disagree, the fact 
that there is not one shred of systemic evidence here, the fact 
that we have gone to court and the courts have said it is 
arbitrary and capricious, the fact that the day after we 
issued--the day after the courts issued their order, the 
Secretary testified to a question by Senator Alexander, if the 
fact--was he aware of the fact that the day before the Federal 
courts had issued and vacated and called it arbitrary and 
capricious, would he simply issue another moratorium, he said 
yes.
    So it is clear to me that there is a ``damn you'' attitude 
towards the science and to the analysis. It is clear to me that 
there is an effort at play to move this country artificially or 
to accelerate a move away from the use of hydrocarbons to fuel 
this country. And there are some folks who are going to look at 
this opportunity, and shame on them for using the loss of life 
of 11 Americans to try to bring about a change in the use of 
where we get our energy. If we are going to have an energy 
debate in this country, we ought to have it----
    [Applause.]
    If we are going to have an energy debate in this country, 
we ought to have it, but we ought to not use this event as the 
reason. Seven percent of America today gets its energy from 
alternatives and renewables and I think that this was about--we 
all believe that this can't be business as usual. You have 
testified, both of you have testified, it can't be business as 
usual.
    Death by a thousand cuts is what is happening. It is a 
moratorium today. We beat it. We get another one issued the 
following day. We go to court on that on August 25. There will 
be another one. Then we get regulations that are rolled out. 
Then we can't understand the regulations because the people who 
wrote them have the duty to explain them can't explain them 
fully to us. You just begin to get the sense there is something 
at play a lot more than just moratorium and deepwater drilling. 
I think you get the play that this is about an effort to move 
this country off of hydrocarbons premature.
    Senator Vitter. Thanks. Just one----
    [Applause.]
    Thank you. One closing comment to the other panelists who 
are talking about the investment business environment. You 
know, for a lot of businesses, particularly worldwide 
businesses, one factor they look to in terms of investing in 
different places is political risk. What I am scared to death 
about is that for energy companies and related industries, all 
of a sudden, the political risk in the United States of America 
is higher, is worse, is more threatening than it is in West 
Africa or a lot of other places in the world, and that is quite 
a comment.
    Would any of you all like to expand on what you think this 
is doing to that business investment environment, including for 
small business here in Louisiana?
    Mr. Cloutier. I would say that what we are seeing is that 
there are people who can go overseas that are moving overseas 
because they are just as worried as we are about what it is 
going to be going forward. I mean, we don't know what it is 
going to be going forward. We don't know when they are going to 
open up the permits to the shallow water or the deepwater and 
what is that price going to be going forward. How much is the 
insurance going to be? What are you going to have to do to get 
that permit?
    So those people who have the financial wherewithal to go 
overseas, and a lot of them already have had offices overseas, 
so it is very easy for them to bring their rigs, their boats, 
their equipment overseas, they are gone overseas. And I know 
Anandarko just moved three rigs, I think three months ago.
    So we are seeing the movement to overseas and that is going 
to hurt the small businesses here because they are not going to 
be able to move overseas with them. So, yes, that is a big 
concern of ours, is the political landscape and the price of 
doing business in the Gulf is going to go through the roof to 
us.
    Chair Landrieu. Would you all go quickly so--I wanted to 
get this in----
    Mr. David. Senator Vitter, I am so glad you asked that 
question, because I had a little blip here, but I didn't have 
enough time. This is from an investor developer. ``Over the 
past decade, my partners and I have invested more than $3 
million per year in the real estate in this area. In 2009 
through early 2010, we invested close to $20 million. Since the 
moratorium, we had four build-to-suit projects canceled. The 
prospective tenants were all multi-million-dollar companies. We 
lost our option monies and all our pre-development costs. At 
this time, we are no longer looking at this area for investment 
and strongly considering investing in Brazil.''
    Chair Landrieu. Charlie?
    Mr. Goodson. Quickly, I think as a community, we are where 
we eat and we are where we shop. Local restaurants, local 
stores are who we are--Charley G's, Cafe Vermilionville, 
Judy's--and there is only one of those in the whole world, 
right here in Lafayette. So as a small businessman, I would 
like to do another project in Lafayette with my daughters, but 
that is not going to be the case. I cannot take that risk. I 
cannot venture out until there is some kind of final solution 
to this problem. So I think more small business, like myself, 
to open up individual local restaurants is going to be very, 
very hard.
    Chair Landrieu. Ms. Davis.
    Ms. Davis. I would like to say, the oil and gas industry is 
a very global industry, and even as a small business owner, we 
have had to position ourselves, even before the moratorium, to 
be able to compete in a global market because many of our 
clients are overseas.
    What I am seeing as a result of the moratorium, companies 
and agents that I had been working with and working through in 
Saudi Arabia, Nigeria, other parts of the world, are very 
pleased with what is happening here because they are now going 
to capitalize on the fact that we need to do business there. We 
will be able to send our technology there. We will be able to 
send our people there. We will be able to focus more time and 
energy to developing those business relationships and making 
them stronger. And it is going to be a real pain for us.
    Chair Landrieu. Well, that is a perfect place to end, a 
perfect place as a challenge to end this first panel. We have a 
second panel. You all were excellent. I want the Administration 
to take note that even Secretary Chu, the President's hand-
chosen person for Secretary of Energy, said that this country 
is going to be needing a tremendous amount of oil and gas for 
the next 50 years. I would strongly suggest we get as much of 
that oil and gas here, right here at home on American soil, 
right here along the Gulf Coast. The Administration's policies 
are in a direct conflict even with the statements of the 
Secretary of Energy.
    Thank you. While this panel is moving and the other panel 
comes forward, I am sorry I cannot recognize people in the 
audience at an official field hearing. If you want to submit 
anything for the record, you may, and I am going to remain 
afterwards for a few minutes for anyone who wants to talk to me 
personally. I thank you all very, very much for coming.
    Would the second panel come forward, please? To save time, 
I am going to introduce them as they come forward.
    First, we have State Senator Norby Chabert. Senator Chabert 
was born and raised in Petit Caillou. He represents District 
20, which covers the southernmost sections of Terrebonne and 
Lafourche Parish. He is one of the rising stars in our 
legislature, a dynamic leader in the state, and will speak from 
a perspective--his family, of course, has been in and around 
the business for many years.
    Representative Simone Champagne is a lifelong resident of 
Jeanerette, who worked for First National Bank of Jeanerette 
for 23 years. She served as Chief Administrative Officer of 
Iberia Parish Government. She is currently a member of the 
legislature and an excellent leader. We are very pleased to 
have Representative Champagne with us today.
    Honorable Arlanda Williams is the Parish Chairwoman of 
Terrebonne Parish, the first female to hold this position. She 
currently serves her first full-time term of District 2 on the 
Council. She was Immediate Past President of Louisiana Police 
Jury Association, of the Black Caucus, and current President of 
the National Association of Black County Officials, and she has 
testified in Washington and we thank you very much for your 
leadership.
    And, of course, Mayor Tim Matte from Morgan City, which is 
the gateway to the Gulf of Mexico for shrimp and oil field 
industries. Because of the importance of these industries to 
the local economy, Morgan City has the Annual Labor Day 
Louisiana Shrimp and Petroleum Festival, and that has been 
getting a lot of attention around the country as people start 
to really understand how we can shrimp and drill in the same 
waters on the same day and have done so successfully and safely 
for many decades, and we thank you for being the spokesperson 
of that community.
    Let us begin, if we can, Senator Chabert, with you, and if 
you will limit your testimony to four to five minutes and then 
we will have a round of questions.

 STATEMENT OF HON. NORBERT N. CHABERT, LOUISIANA STATE SENATE, 
                          DISTRICT 20

    Mr. Chabert. Thank you. Madam Chairwoman, distinguished 
members of the United States Senate Committee on Small Business 
and Entrepreneurship, my name is Norbert Nolty Chabert, but 
everybody down in the bayou calls me Norby. I am a Louisiana 
State Senator for District 20, and I want to first thank 
Senator Landrieu and Senator Vitter for their service on the 
committee and for giving this serious matter the attention that 
it deserves.
    Louisiana's 20th Senatorial District is a very unique and 
special place. Geographically, it is comprised of the 
southernmost portions of Terrebonne and Lafourche Parishes. It 
is home to some of South Louisiana's most famous bayous, Bayou 
Terrebonne, my home of Bayou Lil Caillou, and the most dominant 
and legendary bayou of them all, Bayou Lafourche. The names of 
the towns there are synonymous with Louisiana living--Houma, 
Cut Off, Cocodrie, Dulac, and Golden Meadow. District 20 is a 
microcosm of our State.
    It is flush with shrimp boats, vast sugar cane fields, huge 
mills, fertile hunting and fishing grounds, thousands of camps 
and boat launches, and miles and miles of America's wetlands. 
It is also the hub of offshore support and supply for oil and 
gas exploration in the Gulf of Mexico. And no disrespect to our 
dear friends and colleagues here in Lafayette, St. Mary, and 
Iberia Parishes, but it is now the epicenter of the economic 
impact of the Department of Interior's moratorium on offshore 
drilling.
    You see, members, District 20 is not only the home of the 
Louisiana Offshore Oil Port, commonly referred to as LOOP, 
where over 13 percent of our nation's oil is piped through over 
50 pipelines in the Marsh Pipeline System, but it is also home 
to Port Fourchon, Louisiana's offshore supply super-port. 
Currently, each and every one of the 33 rigs that have had 
their drilling suspended by this moratorium are based, 
supplied, and serviced out of Fourchon, every single one, 
members. Much has been made of the consequences of the job loss 
on those 33 rigs. It is estimated that there are between 6,500 
and 7,000 workers combined on the moratorium rigs. However, it 
must be noted that were are over 5,000 workers on the docks of 
Port Fourchon alone, Fourchon, to say nothing of the 8,500 
direct jobs of men and women who drive in and out of that port 
every single day to provide the goods and services needed to 
make that port and our oil and gas industry operate.
    But neither the port nor the large companies that lease 
space there are why I come before you today. Those companies 
are directly feeling the pain, the financial burden of this 
moratorium, as much as anyone. But they have lawyers and 
lobbyists to fight their fights for them.
    I come before you as a representative of the thousands of 
mom and pop operations in my district, small businesses like 
Tom's Gas Station in Golden Meadow, Pat's Dress Shop and Paul's 
Drive-Through, both of Chauvin, the Galliano Twist, Marcel's 
Supermarket in Bayou Blue, Blackie's in Lockport. These are 
places where the workers of the oil field buy their tires, they 
get their groceries, they purchase their children's school 
uniforms, and they pick up a hamburger or a six-pack after a 
long day of work.
    But there aren't a whole lot of extra burgers being bought, 
not a whole lot of dresses being sold. Everyone in my district 
is feeling the effects of the economic depression that has been 
wrought upon us through no fault of our own. Every conversation 
that I have with my constituents, whether it is at a coffee 
shop on a Monday or after church on a Sunday, is filled with 
the concern of the impact it is having on their businesses and 
the worry about whether or not they are going to keep their 
job.
    Just this past weekend at my local Rouse's Market, I was 
stopped seven times by people telling me of the hard times that 
they were facing. Now, Senators, this is not a scene that is 
unfamiliar to us. Public service is the life we have chosen. 
However, the testimony of these constituents was very much the 
same, yet drastically different.
    A teacher was worried about the progress of her classroom, 
where three of her kids' parents had lost their jobs and were 
going to move. A woman working in a print shop had seen a 50 
percent downturn of orders just in the last three days--excuse 
me, last 30 days. A man who owns a tool rental company has had 
to lay off two of his ten workers in his shop just because 
their services are no longer needed. Every one of their 
testimonies is because of this moratorium on drilling.
    Over the last half-century, the hard-working people of 
South Louisiana have built the energy infrastructure that 
powers this country. The people of the Tenth Ward in South 
Lafourche practically invented the international boat business. 
Oil and gas is the lifeblood of our economy, from top to 
bottom, and that blood has stopped pumping due to nothing more 
than political posturing.
    In the coming weeks and days, more and more companies will 
lay off employees. Shops will shut their doors for good. Car 
payments will not be made. Mortgages will not be paid. In 
Terrebonne and Lafourche Parish, the welcome sign will once 
again read, ``Last one out, turn out the lights.''
    Once again, I would like to thank the Chairwoman for her 
leadership and Senator Vitter for his leadership, as well, as 
well as the attention that the committee is paying on this very 
important issue. Thank you.
    [The prepared statement of Mr. Chabert follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Chair Landrieu. Thank you, Senator.
    [Applause.]
    Representative Champagne.

   STATEMENT OF HON. SIMONE B. CHAMPAGNE, LOUISIANA HOUSE OF 
                  REPRESENTATIVES, DISTRICT 49

    Ms. Champagne. Thank you. First of all, I would like to 
thank Senator Landrieu and Senator Vitter for being here today 
and listening to us. We really appreciate all the hard work 
that you all are doing in our capital to make the rest of the 
nation understand how important Louisiana is in the oil and gas 
industry.
    I also, and in your package you will receive, I included a 
survey from an independent oil and gas industry people that did 
a survey on the economics and gives you a little more stats 
than what I will provide.
    To start off, I represent District 49, which is Coastal 
Iberia and one-third of Coastal Vermilion Parish. I am very 
proud of the fact that we don't compete necessarily with Port 
Fourchon, but we try to complement Port Fourchon on our 
industry. What we have in District 49 are two waterports that 
do topside as well as fabrication, as well as an airport that 
is home to the Helicopter Training Center that utilizes a lot 
of the oil and gas industry air providers. I also am proud that 
we are the home of the Henry Hub, which provides 25 to 30 
percent of the electricity throughout the nation. This, I 
believe, is what we need to make Washington understand, how 
much we provide the rest of the nation, what we do for them on 
a daily basis.
    In my testimony, I also have written from Ms. Heidi Martin, 
who owns Prologue, another woman-based industry, and she is 
located on Highway 90 in Iberia Parish. She does rental and 
lease for offshore oil storage facilities and drilling. She has 
received 80 to 85 percent reduction in her sales and lease 
since the moratorium has taken effect. On the bottom of her 
statement, which I did provide for you all, she gave me a 
wonderful quote. ``Courage is not denying a situation, but 
denying its power over you.'' Today, my testimony is going to 
be about not denying the power that the moratorium has put on 
the good people of Louisiana.
    I, like Norby, visit those supermarkets on a daily basis. 
We have families. We have to go home and cook their meals and 
take them to the ballpark and everything else that moms and 
dads and grandparents do on a daily basis. So my testimony 
today will be about the small businesses that I visited in the 
last several months about the moratorium.
    First was Prologue, a woman-owned business that is getting 
80 to 85 percent decrease. The others are our mud cleaning 
businesses. We all talk about how the drilling rig, how they 
are pumping mud into the Deepwater Horizon. Well, all of that 
has to be cleaned out at some point in time, and that is what 
drilling does. So we have a lot of that industry in District 49 
and across the coastal parishes. So they are hurting, because 
if they are not working, if they are not drilling, they are not 
cleaning.
    I also visited with supply companies. We have very many. 
Now, we look at supply companies sometimes as giving those 
fittings and the piping, which they do, but we also have supply 
companies that will daily ship to our businesses supplies such 
as groceries, air conditioners, and heating, linen supplies, 
our galley hands. If they are not drilling and we are not 
producing oil and gas, they are not working. So these people 
are out of work. They run the risk of not having a job in the 
next six to nine months or as long as this will last, and for 
eternity.
    I also visited our uniform companies that have had a 
decrease of about 50 percent in their sales for uniform 
companies and printing. So all of this, along with I had an 
interesting conversation on Friday with a caterer, and what she 
said was--another woman-owned business that employs about 35 
people--she said, people think of caterers as being the wedding 
people or the special planners, which they are. But I know in 
the district I represent, they also go out to our ports. They 
furnish daily meals for the industry that they sell to workers. 
And all of these specialty items, they can no longer furnish 
because these are some of the things that are being cut back in 
our economy because of this moratorium. They also buy from our 
local restaurants and our local grocery stores.
    So it is not about the trickle-down effect. It is about the 
trickle-up effect, how it is climbing the ladder. And this will 
reach Washington very shortly. When this and many others don't 
work, local sales taxes are down. That affects the services 
that we provide as public servants when it comes to our schools 
and our drainage issues that we have along the coastline.
    We need the rest of the nation to understand how hard 
Louisianans work to provide the many products that are derived 
from this industry. We are the energy corridor. We don't have 
to be dependent on foreign oil.
    As a wife, mother, and sister of oil field employees, I 
understand the hazards of the industry. I also understand the 
dilemma that families face firsthand about the layoffs that 
they soon will see. My husband and I went through the 1980s, 
the oil bust of the 1980s, with two small children to feed. The 
uncertain future for these families will cause great stress 
amongst them. We have hard working, resilient people in 
Louisiana. Allow us to continue to provide the quality of life 
our constituents deserve and have worked for for years to 
accomplish.
    Katrina and Rita issued a huge blow to the Louisiana 
economy. Gustav and Ike kicked us in the gut. The oil spill 
brought us to our knees. But this moratorium and the cease of 
drilling permits will sign our death sentence.
    I ask the Administration to please lift the moratorium, not 
in October or November or September, but today. Let us get back 
to work. Thank you.
    Chair Landrieu. Thank you.
    [Applause.]
    Ms. Williams.

    STATEMENT OF HON. ARLANDA WILLIAMS, COUNCIL CHAIRWOMAN, 
           TERREBONNE PARISH CONSOLIDATED GOVERNMENT

    Ms. Williams. Thank you. Good morning, Senator Landrieu and 
Senator Vitter. Thank you guys for inviting us here.
    I bring you greetings from the good earth, Terrebonne 
Parish, where I currently chair the Parish Council. The French 
words ``terra bonne,'' meaning good earth, good soil, and good 
land, are more than fitting, as the citizens of our parish have 
supported themselves and their families with the blessings of 
nature, our unique geography that creates abundant fisheries, 
our beautiful landscapes, and a warm culture that draws many 
every year. Our parish symbols, the oil rig and the fishing 
vessel, represent the importance of the oil and gas industry 
and the seafood industry to the economy of our great parish, 
with approximately 60 percent of our workforce directly or 
indirectly related to the oil field and approximately 20 
percent directly or indirectly related to the seafood industry.
    The explosion of the Deepwater Horizon caused devastation 
to 11 families who lost fathers, sons, brothers, or friends, 
something that many of us have probably never experienced, a 
death with no proper closure. Moreover, the events after the 
explosion have caused detriment to thousands along the Gulf 
Coast, a reality that some of us never thought we would be 
faced with.
    Although we understand the position of safety, a six-month 
moratorium would destroy parishes and counties along the Gulf 
Coast that rely heavily on oil and gas as a way of revenue. In 
our case, six months is the equivalent of two to four years. 
When a company that installs and dismantles offshore platforms 
in the Gulf of Mexico ties up a derrick barge, that act ripples 
through the region and States' economies. It results in 
employee layoffs, approximately a crew and staff of 100 people, 
and the subsequent reduction of their income, the impact on 
their ability to pay mortgages, household bills, tuition, fewer 
dinners out, shopping trips, and other dollars that can be 
spent in our local economy.
    My parish depends more or less on services related to the 
oil field industry, so when one company reduces its spending 
with numerous other companies who supply that operation--
groceries, welding suppliers, pipe, sheet metal, safety 
supplies, chemicals and cleaning fluids, field, truck 
transportation, water, driving companies, and even the 
scrapyard that would be used to buy those scrap materials--and 
those suppliers lose their business, when this happens, they 
lose their ability to spend dollars on those supplies and 
services and can be forced to lay off employees. This is just 
from one derrick barge that services shallow waters, where 
permits are still not really being issued.
    In Terrebonne Parish, all of this reduced disposable income 
has hurt a local restaurant. Big Al's, known to many when they 
come and visit our parish, is a long-established seafood 
restaurant that had to close one of its locations. The closure 
was the result of a decrease of income of $15,000 to $20,000 a 
month for the last 90 days and the difficulty in buying seafood 
to prepare and sell. He was affected by both the loss in 
seafood and the lack of employees coming in because the oil 
field services always came in and did lunch meetings or dinner 
meetings with Big Al's. While this means no purchases are being 
made from seafood suppliers, neither are purchases being made 
from suppliers of other ingredients, supplies, or utilities. 
These workers have lost their jobs and no longer have the 
ability to spend money as freely as they previously did.
    The effect of the moratorium will have more of a lasting 
effect than anyone can conceive. With a Master's in criminal 
justice, I understand social strain, and this is a theory used 
in criminal justice to describe increased criminal activity and 
certain offenders. It is the inability to live the quality of 
life you are accustomed to, thus resulting in increased 
criminal activity which happens when that father or that mother 
cannot bring home the food and the money that they are used to 
and their children cannot live the lives that they have been 
accustomed to living. They result in doing things that are 
unseen and unknown to many because they want their family to 
continue to go and live the life that they have lived for so 
many years.
    But the most important thing are our children. The 
Terrebonne Parish School District went into Reduction in Force 
for the 2010-2011 school year, highly related to a $9 million 
sales tax decrease, a drop in child enrollment causing their 
MFP to decline because of migration out of the parish. The 
school system receives 46.22 percent of sales tax revenue and 
will begin this school year in need of $11.3 million to balance 
the general fund, and that is before the true effects of this 
moratorium begins. These numbers are expected to almost double, 
and to put a burden on an already financially burdened school 
system.
    The basis for which this country's future lies is in our 
children and they are now becoming the sacrificial lambs at the 
end of the situation. Because the public school system will 
have to prepare for an increased amount of students that will 
transfer in from the parochial system, thus causing overcrowded 
classrooms mixed with all types of behavioral problems, yet 
there will be no increase in the sales tax, to increase the 
teaching staff will be unattainable, thus making ``No Child 
Left Behind'' to be changed to ``No Generation Left Behind.''
    Am I my brother's keeper? Am I my sister's keeper? E. 
pluribus unum, out of many, one. It is this fundamental belief, 
I am my brother's keeper, I am my sister's keeper, that this 
country works off of. But if you live in a little area called 
Pointe-Aux-Chenes, a community built on the seafood industry, a 
community rich in faith and hope, a community strong enough to 
weather every catastrophic storm that has touched the Louisiana 
Gulf Coast, and yet not another disaster has taken away the 
very industry that they need to survive, and now many is taking 
away the only backup plan that they ever had.
    I beg upon you to take back these fundamental beliefs to 
the administration to let them know that we are a people that 
can stand and we can weather anything. But when you take food 
out of our mouths, when you stop educating our children, then 
we begin to fight, and our fight is not one, but it is all 
standing together.
    I thank you guys for your support and I thank you guys for 
having this meeting today.
    [The prepared statement of Ms. Williams follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. Thank you.
    [Applause.]
    Thank you, Madam President, very much for that moving 
testimony.
    Mayor Matte.

 STATEMENT OF HON. TIMOTHY MATTE, MAYOR, MORGAN CITY, LOUISIANA

    Mr. Matte. Good morning, Chairwoman Landrieu and Senator 
Vitter. Welcome to South Louisiana and the Cajun Coast. My name 
is Tim Matte and I am presently serving my 14th year as Mayor 
of the City of Morgan City.
    Morgan City is a community located 70 miles south of here 
at the bottom of the Atachafalaya Basin, the largest overflow 
river swamp in the United States. We are very proud of the fact 
that we are the birthplace of the offshore oil and gas 
exploration business. In 1947, Kerr McGee drilled the first 
successful oil well outside of land just south of Morgan City 
and brought about this vital industry. At the same time, our 
community was known as the Jumbo Shrimp Capitol of the world in 
recognition of the huge fleet of shrimp boats ported out of 
Morgan City, harvesting the jumbo shrimp from the waters of the 
Central Gulf of Mexico. Today, both of these industries are 
prominent contributors to our local economy, although the 
support of offshore oil and gas exploration and production make 
up the majority of our economic base.
    The businesses that call our community home include small 
marine fabricators, shipyards for both new construction and 
repair, diesel repair shops, equipment rental companies 
providing equipment utilized by drilling companies for all 
phases of exploration and production of oil and gas, vessel 
operators, food supplying catering companies, and diving 
contractors and remote operating vehicle manufacturer and 
operators, as well as companies providing support for all of 
these businesses.
    Our resident companies are primarily small businesses, but 
we also are home to some of the larger names in this vital 
business, such as the fabricator of many of the offshore 
structures and production facilities, J. Ray McDermott, 
Transocean, Halliburton, Cameron, the manufacturer of sub-sea 
equipment, such as blowout preventers, and Oceaneering 
International, the manufacturer and operator of those ROVs, or 
underwater robots that we all watch working on the plugging of 
the Deepwater Horizon well.
    We are also home to the companies that developed and 
constructed the Big Gulp, the barge skimmer that successfully 
worked in removing large quantities of oil from the Gulf, and 
the sealing plug was fabricated here in our parish. We are also 
home to a variety of small retailers that rely on the 
employment provided those that work offshore and for those 
service companies.
    I would like to make a few initial comments as an overview 
of our feelings towards the moratorium, offer some examples 
from my community of the impacts we are seeing and anticipate 
seeing as a result of the moratorium, and wrap up with a few 
comments about the need for safety in the industry.
    It is my understanding that there are 33 rigs seeking 
permits to drill in deepwater in the Gulf of Mexico. I also 
understand that two rigs have already left the Gulf for other 
projects in foreign waters. And I understand that up to six 
rigs have already sent notification that they will be leaving 
the Gulf of Mexico. My view of the moratorium is that it is 
punitive to small business in Coastal Louisiana. I believe that 
this is not the intention of the effort, but without a doubt, 
that is the result.
    The larger oil companies will not be adversely affected by 
the withholding of drilling permits as they will simply exploit 
a resource in some other part of the world. The drilling 
contractors may only suffer minimal impacts as they compete on 
a worldwide basis and have opportunities to drill elsewhere. 
But our small business community primarily serves the Gulf of 
Mexico activity. The movement of these rigs will cause a loss 
of jobs and economic opportunity for our resident companies as 
they will not be in a position to follow the activity to 
foreign areas. In some cases, they would even be prohibited 
from doing so.
    Let me offer a few examples from my community. Morgan City 
is the home of an offshore caterer, a family-owned business 
that has been operating here since the 1960s, serving companies 
with their food and related product needs out of a downtown 
Morgan City location. They employ 70 to 90 people, depending on 
workload, and of the 33 rigs in question, they have contracts 
with six. When operating, those six rigs represent 30 percent 
of their gross revenue. The loss of these rigs would lead to a 
reduction of the staff by as many as 30 people. Since he would 
not have the workload, he would also have to return a number of 
trucks that he has presently under lease, and, of course, the 
fuel purchases and all of the other costs associated with that 
would have to be reduced.
    One of our small fabricators, another example, builds flow 
line jumpers for these offshore wells once the well is drilled 
and moved to development. He has reported that he has had 
orders postponed for nine jumpers from one oil company and from 
six from another company delayed. He expects this to impact his 
revenues by over $1 million. He does market to companies that 
do work in foreign areas. However, he has not been very 
successful in doing that in that he finds that fabrication is 
one area where some foreign governments have put a requirement 
of local content in their projects, therefore putting him at a 
competitive disadvantage.
    Each of these 33 drilling rigs will have one to two ROVs 
for its drilling operation. One of our resident companies had 
committed 29 ROVs to those 33 drilling rigs. From a company 
perspective, he hopes to continue to serve those rigs if they 
move. However, they will be crewed by employees from those 
foreign offices that he has. That is going to result in the 
loss of United States employment, without a doubt.
    Our area is also the home to a helicopter company which 
happens to probably have locations in every one of our 
locations. They have contracts with 22 of those 33 rigs. That 
is going to have an impact all across the Gulf Coast.
    These are just a few examples that we have seen thus far 
with the moratorium. This burden is falling on small business, 
and consequently it is going to fall on a community like mine 
as we are forced to adjust our budget by reducing the number of 
people we have working for us, thus exacerbating this problem.
    St. Mary Parish was in the disaster area for each one of 
the hurricanes, Katrina, Rita, Gustav, and Ike. We have come 
through some pretty tough times. These tough times, one of the 
results of that is that it causes a depletion of our reserves. 
We just don't have reserves to fall back on to wait around. We 
don't have the luxury of waiting out better times when a 
drilling moratorium might be lifted and when these rigs might 
come back to the Gulf of Mexico.
    In my conversation with some of the business community, I 
was told that the economic downturn and the effect the 
moratorium has had in some cases has been softened by the 
opportunities derived by responding to the spill or providing 
services to BP and their contractors, and this has had the 
result of putting some offshore supply vessels and towboats 
back to work and barges to work.
    I had one crewboat operator tell me that he has had four 
jobs canceled in deepwater, but he has got five boats working 
on the spill. I believe he has already got notification on one, 
and the notification on those other four are coming shortly. 
Those boats are going to be laid off. So in addition to losing 
these four from the deepwater projects, he is going to have 
another five vessels sitting at his dock, not spending money, 
not employing people, and so forth. Two vessel crews have 
already been let go. That is 24 people. You know, you operate 
those vessels around the clock. It takes a lot of people to 
operate them.
    Another contractor, another offshore supply vessel operator 
told me that he has fully one-half of his fleet today committed 
to BP and has already received a notification about those 
contracts. So while we have talked about some very bad things 
that will happen as a result of this, I think the worst is yet 
to come with the moratorium because this BP work will and has 
to end.
    We all see that this work is now coming to an end, and our 
parish right now has an unemployment rate of ten percent. That 
is as of June 2010. That is up from 8.7 percent last year. Once 
again, I think that clearly demonstrates that this moratorium 
is punishing the wrong people.
    A common theme I am hearing from my business community is 
that the new office replacing MMS, namely the Bureau of Ocean 
Energy Management, is contributing to a reduction in economic 
activity in the Gulf of Mexico causing the de facto moratorium 
that we have referred to. One local businessman referred to the 
office as chaotic in processing a permit request, and delays 
are resulting in the processing of permit requests for 
activities that have absolutely nothing to do with deepwater 
drilling activities other than the fact that they both occur in 
the Gulf of Mexico. And I will add to that, not only is it 
shallow water drilling permits, but it is permits for 
activities in shallow waters that have nothing to do with 
drilling. This is having an impact on many of the service 
providers in our community that have traditionally served 
shallow water and the shelf areas going back to the early days 
of the Gulf of Mexico.
    And lastly, let me finish up with one point that I would 
like you all to leave here regarding--my comments regarding 
safety of offshore oil and gas production and exploration. I 
think the Macondo Well incident, most of you would agree that 
prior to that incident, the industry had a pretty good safety 
record. While there is and will be much debate about the cause 
of this very tragic incident and what should be done about it 
to prevent a future incident, I want to offer this observation.
    I think it is very significant that the loudest voices 
protesting the institution of this moratorium is coming from 
mayors and parish presidents and workers and their families 
from Coastal Louisiana. Those are our sons and daughters on 
those rigs. Those are our brothers and sisters on those rigs. 
None of us take their health and safety for granted. We demand 
a safe workplace. We have proudly served our nation by putting 
ourselves at risk by undertaking this important task because it 
is noble work, it is important work, and it is work that this 
country needs done.
    I think our willingness to continue this work deserves some 
recognition. Our citizens want to go back to work. And I thank 
you for this opportunity to share these thoughts with you.
    [The prepared statement of Mr. Matte follows:]

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    Chair Landrieu. Thank you.
    [Applause.]
    Well, ladies and gentlemen, we have had two excellent 
panels this morning and I think the testimony has been some of 
the best that I have heard, either chairing a meeting or 
participating, in the hundreds that I have participated in 
since becoming a Senator. So I really appreciate it.
    I want to submit for the record, following up Scott 
Angelle's testimony, the letter from the five experts, the 
Administration's own experts, who have testified and advocated 
against the moratorium. I want to make sure that that gets in 
the record.
    [The information follows:]

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    Chair Landrieu. I also want to submit for you, 
Representative Champagne, the document, the survey of small 
businesses that you referred to in the record.
    [The information follows:]

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    Chair Landrieu. I have one question for the whole panel, 
and we will then turn it over to Senator Vitter so we can wrap 
up at the appropriate, expected time.
    Part of the feedback that we have gotten when we have been 
discussing the ending of this moratorium with people is, well, 
the situation isn't as bad, Senator, as you describe because 
there are so many people being employed or hired by the clean-
up. We try to explain that that in no way substitutes for the 
loss of the permanent jobs and the anxiety that is out there 
because of just the unknown.
    So I would like to ask you all to respond to this. This 
hasn't been officially on the record, but we get these comments 
in private meetings that we have. Would you try to take a 
minute, each of you, to explain to the public the difference 
between the jobs for the clean-up, which might be temporary and 
sometimes are hiring workers that aren't even from our area, as 
versus the jobs being lost from the moratorium? I don't know, 
Mayor, if you want to start----
    Mr. Matte. I would be happy to. I think what we have seen 
in our community, primarily, those jobs have involved the 
hiring of vessels. And in some cases, these boats were not 
working, so they were able to put those back on. The best 
example I have, the two marine operators that I mentioned 
earlier, both of them have crew boats and supply boats, and the 
crew boats are the--that is the low cost per day rentals. They 
are very thankful for the fact that they were able to put those 
vessels to work because what is happening is the larger 
offshore supply vessels, those in the 260 even up to over 300-
foot-long vessels that leave Port Fourchon for the deepwater 
areas, those are the much higher day rates, require much more 
employment to staff those vessels. Those are the ones that are 
laid off. They are kind of supplementing it with these crew 
boats and some of the smaller boats that are serving the spill.
    But they have already gotten notification, that is it. That 
is over. That is gone. Will it be another week, another month? 
That is probably the outside time frame we are talking about. 
Over the next month, those jobs will go away.
    Chair Landrieu. So it was an inadequate and temporary 
substitute for the jobs lost, and now that is even coming to an 
end.
    President Williams.
    Ms. Williams. Yes, Senator. In Terrebonne Parish, as you 
know, BP has one of their stations is right, unfortunately, 
right in my district, as well. But we had a serious problem 
with them even hiring our local vessels of opportunity. So to 
say that people are working, people are making money, that is 
true, but it will not last past 90, maybe 180 days at most. But 
these people that have been placed out of these other jobs, it 
is going to take them, just like I said earlier, two to four 
years before they can make the living that they used to make.
    So you are going from $2,500 a week, example, to $235 a 
week. So that is the false that they are being sold that they 
are making money, but you are not making money every day. You 
are not guaranteed to go out every day. I have been stopped 
several times. ``Ms. Williams, we go down there and they sent 
us back home.'' So that is not a job. A job is you know that 
you have to go from eight to five or eight to six, not if I go 
and they feel like bringing me, then I am going to work that 
day. So that is a false that everybody needs to understand. You 
may see people working today, but tomorrow, you may not.
    Chair Landrieu. Representative.
    Ms. Champagne. Thank you, Senator. Yes, I agree, and I 
think where we get this false sense is people are confusing the 
oil spill with the moratorium, and every day when we go out in 
our districts, I know in District 49, my fishermen, my 
shrimpers and my fishermen have been put to work by BP and they 
are working their boats. What the moratorium is doing is it is 
affecting the stable industry that we have with oil and gas 
throughout Iberia and Vermilion Parish as well as the whole 
coastline.
    We have oil field service companies and fabrication 
companies at the Port of Iberia that are already setting up 
shop in Brazil. These will not come back. If they leave totally 
and the economy base in Brazil helps them and the climate in 
Louisiana and the United States is not good enough, they are 
not going to come back. But they can't take all of our people 
with them when they do this.
    So the false sense that people are actually working is 
exactly that, a false sense of people actually working. The 
moratorium is longstanding, and when I say longstanding, not 
today or tomorrow, a month from now. This is years. It will 
take years for our economy to come back, if it will at all.
    Chair Landrieu. Senator.
    Mr. Chabert. One point that has not been touched upon that 
I know both of you have a tremendous amount of experience in, 
in terms of those jobs that are out there relative to the oil 
spill, what you have during a time of emergency and tragedies 
like this is the influx of profiteers. Unfortunately, we have 
seen that up and down all of our parishes, where you get folks 
who are not even from the State, much less from the area 
affected, coming in and capitalizing on some of the 
opportunities that were there, be they vessels of opportunity 
or catering contracts or any of the number of things that have 
been discussed thus far today.
    You know, secondly are those jobs that have absolutely 
nothing to do with the oil spill that we have talked about 
repeatedly today. How do you equate a teacher who is going to 
lose their job due to a reduction in MFP and a decrease in the 
workforce, how do you say, well, that person can go to work for 
an oil spill clean-up job? It is unfortunate that there is that 
misconception out there, but completely understandable that it 
does exist.
    Chair Landrieu. Thank you all for clearing that up.
    Senator Vitter.
    Senator Vitter. Thanks. I just have two questions. First, 
for the Senator and Representative. You mentioned you both 
represent significant ports, Port Fourchon, Port of Iberia. 
What percentage of those ports' activity is directly related to 
offshore oil and gas? And if the formal or de facto moratoria 
continue for six months or more, what will those ports look 
like?
    Ms. Champagne. Thank you. The Port of Iberia is 100 percent 
oil and gas related, and if we see a decrease, what will happen 
is, like we are seeing right now, some of our port facilities 
are looking at overseas employment. So they will decrease and 
these yards will be substantially decreased in furnished 
product here in the United States as well as overseas, but I 
can see if this continues, a reduction of at least 75 to 80 
percent.
    Mr. Chabert. And as we have stated before, 33 of those rigs 
that are affected by this moratorium are based out of Port 
Fourchon, so that would speak directly to them, but 100 percent 
of what Fourchon does.
    More importantly, I want to speak to something that we have 
all worked on, and I see my good friend, former Senator 
Cravens, Chief of Staff of the committee, you know, the hard 
work that we put in paying for long-term projects to get money 
down to things like Port Fourchon that we all agree are a State 
asset but they are a national asset, we are all familiar with 
the Leeville Bridge and the money that we have all worked so 
hard to allocate to that. We have tied directly the payment of 
bonds to pay for that bridge on the amount of traffic that is 
going to go to service Port Fourchon via the way of tolls. 
Well, no one has been able to calculate the loss of revenue 
that has been generated due to the number of trucks and heavy-
load vehicles, which we all know those tolls vary depending on 
what type of vehicle passes over that bridge.
    So, again, the true impact of this moratorium on things 
like that, that folks possibly in DC aren't seeing, has yet to 
be measured.
    Senator Vitter. Right. And Ms. Williams and Mayor Matte, 
again, if the formal and de facto moratoria continue for six 
months or more, what revenue impact will your jurisdiction and 
your local school systems see, and what service cuts will that 
lead to?
    Ms. Williams. In Terrebonne Parish, you are looking at a 
possible 40 percent reduction in sales taxes, which would 
affect not only our school system, which receives 46 percent of 
it, but it would also affect our levee board, who receives 
about $5 million a year through our sales tax revenues, thus 
prohibiting them from continuing with projects that they have 
already started. Definitely, we have already started with a cut 
in our school system, so we would definitely not be able to 
increase the staff.
    On the parish side, we have already started looking at 
different measures as far as cutting back. We are only hiring 
now those positions that are absolutely detrimental to the 
parish. So with a 40 percent decrease in our sales tax, you 
would definitely see lots of layoffs on the parish side, and 
then probably even more layoffs on the school systems side.
    Mr. Matte. Well, Senator, in my parish--first off, I am 
fairly conservative in my budgeting. I budgeted a five percent 
reduction in sales tax for this year and am keeping my fingers 
crossed that that is going to be a sufficient number. We are 
getting ready to go through the budget process for this 
upcoming year, and, of course, this is a big question mark.
    Secondly, you heard me say earlier, my unemployment rate is 
already ten percent. One of the things that I think you 
probably agree with, unemployment has a tendency to create more 
unemployment as those dollars--there are fewer and fewer 
dollars turning over, it broadens its impact and we are going 
to feel it very dramatically.
    I am already not buying equipment and not buying supplies 
and not buying things to avoid having to lay people off, but 
there is no question that that is the only other place that, 
from a community like Morgan City, the only other place we can 
go is to begin to lay off employees. A moratorium that would 
continue on from here would cause--ultimately would cause the 
layoff of city employees. That would be the only response I 
would have.
    Mr. Chabert. And Senators, if I may, on the Mayor's point, 
it needs to be noted for the record that the lowest 
unemployment in the country prior to this moratorium and the 
oil spill was right here in South Louisiana, with Terrebonne, 
Lafourche, Lafayette, and St. Mary.
    Chair Landrieu. And now it is headed to one of the highest.
    All right. This hearing is going to come to a close. I just 
want to say again how much we appreciate the testimony, 
heartfelt, specific, very detailed, that is going to help us 
build the Congressional record necessary to get this moratorium 
lifted immediately and permits issued expeditiously. So we 
thank you all very much.
    The record of this hearing will stay open for another two 
weeks. We encourage other testimony to be presented. And I can 
commit to you all, as the Chair of this committee and as a 
Senator from Louisiana, I am going to put the full weight of 
this committee behind the lifting of this moratorium as soon as 
possible.
    Thank you. The meeting is adjourned.
    [Whereupon, at 11:58 a.m., the committee was adjourned.]



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