Local Ports Adapt Through COVID Struggles

From the Top | Bryan Aucoin, CEO, M&A Safety Services
September 18, 2020
SCIA Remains Pillar of Oil and Gas Industry
September 18, 2020
From the Top | Bryan Aucoin, CEO, M&A Safety Services
September 18, 2020
SCIA Remains Pillar of Oil and Gas Industry
September 18, 2020

The oil and gas industry is a roller coaster, having upswings and downswings as the price of oil rises and drops, and at the beginning of 2020, it looked it was going to continue an upward trend.


However, the industry faced an unprecedented challenge with a global pandemic this year, as the price per barrel fell along with the demand for travel.

“I don’t think we or anybody expected the large economic impact on the world scale that took place,” said Chett Chiasson, Executive Director of the Greater Lafourche Port Commission (GLPC).

“Then once we saw what was going on and started to see the great impact that it had on other countries on the other side of the world from us, we identified that that was going to be a problem here,” he continued. “But I don’t think anybody could have guessed how big of a problem it turned out to be.”


The year started off seeing oil at $61.17 per barrel, and it later got as low as $11.26. At press time, it was just over $38.

For two local ports, Port Fourchon and the Port of Terrebonne, which thrive on substantial oil and gas production in the Gulf of Mexico, this year has been about moving forward and adapting through trying times.

Initially, for Port Terrebonne, business continued as normal.


“Our revenue comes from leases from property and infrastructure that we’ve built…The revenue never stopped,” said David Rabalais, Executive Director of the Terrebonne Port Commission. “…A lot of tenants had projects that they were working on already, and they continued to work as best they could.”

“And in the middle of all of this, the oil and gas prices just went haywire, and there were several things that went on there,” he continued. “Saudi Arabia and Russia were fighting over production, and so they started both producing as much as they can and glutted the market. And at the same time, everything got shut down, so there was no demand. So the prices just went down, down, down — and at one point, it was actually negative.”

Rabalais went on to note that due to the big economic shutdown in the eighties, fabricators, which are the port’s main employers, diversified, so they didn’t get hit as hard during this year’s drop in oil and gas production.


“The fabricators and our whole economy started looking at diversifying into other markets so that we wouldn’t get caught like that again,” he explained. “Back then [the eighties] 80 percent of all fabrication was all in oil and gas. Today, it’s just the opposite: 80 percent is other stuff, and only 20 percent is in oil and gas — if that.”

Both executive directors discussed the importance of implementing COVID-19 safety measures during the pandemic so they didn’t see a cluster at their respective ports.

“We had to adapt in several different ways. Initially, it was making sure we didn’t have an outbreak of COVID: everybody had to try to control and monitor, as much as they could, in their specific unit,” said, Chiasson, who noted that Port Fourchon could have about 5,000 employees working at it on any given day.


“Overall, things played out okay in the port; we didn’t have this huge outbreak,” he continued.

Chiasson went on to say it was then about monitoring what was going on in the oil and gas industry as people around the world started driving and flying less. “We had to do some things to work with our customers because of that economic impact that they had: a lot of their business went away,” he said.

“We worked with our customers and said, ‘look, don’t pay us basic land rental for the next three months,’” Chiasson continued. “And then we furthered that along with some of our customers that have bulkhead improvement rental; we offered them, by their request, to do some deferring of their improvement rental payments to try to help them get through this situation that we are still dealing it.”


At press time, Chiasson said business has slightly improved, but it’s not at the place they would like it to be, especially with the recent storms that took money away from projects that went toward repairs. “This industry is not out of the woods by any means, and we’re still having to pay attention to what’s going on on the world scale and try to keep COVID at bay as best we can so that business can get back and the energy demand can get back,” he said.

Chiasson added: “I think the [oil and gas industry] can handle blows like this, it’s just a matter of how the industry can move forward in the changing times.”

Both directors expressed the importance of the passage of the 2020 Water Resources Development Act (WRDA) to further production at their ports. The bill, which was passed in the U.S. House earlier this year, awaits approval from the U.S. Senate.


If the bill passes, Terrebonne Port Commission will be authorized to deepen the Houma Navigation Canal to 20 feet, adding an additional five feet.

“Since the mid-90s, the industry in this area has been screaming for a deeper channel because the oil and gas industry is going out into deeper water and they need deeper vessels, so 15 feet just isn’t enough,” Rabalais said.

For Port Fourchon, the GLPC will be authorized to deepen Bayou Lafourche and Belle Pass in the port from 24 feet to 30 feet if the bill passes, Chiasson said.


“So, we are going to be able to begin dredging and expanding the capabilities of the channel to meet the current needs that we have in the port, while we continue to work towards Belle Pass hopefully becoming a 50-foot channel in the next two years,” he continued,  “so that we can complete our future plans: to have a deepwater rig repair and refurbishment facility in Port Fourchon in the coming years.”

“Every time we do dredging, we utilize that material beneficially because we know the importance of coastal restoration, especially in this community,” Chiasson added. “It’s not just about the economy and bringing in new business. It’s about utilizing that material beneficially to better our environment and rebuild that coast. And that’s critically important as we move forward into the future.”