UPDATED: Injured football player ‘responding’, but still in critical condition
September 30, 2015
Alfreda Richoux
October 6, 2015
It’s no secret that the local oil and gas industry has been slower than normal for a few months now – one of the longest dips we’ve had here since the BP oil spill.
But folks over at Port Fourchon don’t think it’s time to panic. In fact, they’re already preparing themselves for when things pick up and work gets back to normal.
Even amidst the downturn, work remains steady at Fourchon – the small goldmine of a port that furnishes almost 20 percent of the nation’s oil supply each year.
Port Director Chett Chiasson said the current dip has slightly affected the port’s future plans, but not at a rate that is a cause for widespread concern just yet. He added that one thing he’s learned about the oil industry is that once it goes down, it almost always finds its way back up again. That experience, combined with projections that experts have made to support a future upswing, has Chiasson optimistic that brighter days are ahead in the future.
“We’re watching the market with a close, concerned eye, obviously,” he said. “I think at this point in time, it’s safe to say that everyone is doing the same. But we’re anticipating a pickup to come in the future. We’re crossing our fingers, but we think it’s going to happen early- to mid-2016. It could be shorter just like it could be longer. I guess we’ll see. But the one thing we pretty much believe and know is that the price of oil always makes its way back up. It will again, and when it does, we’ll be ready.”
STAYING IN FRONT OF THE LULL HAS HELPED FOURCHON FLOAT
Chiasson said the port has been out in front of the downturn since it first started earlier in the year.
The Greater Lafourche Port Commission voted this past spring to lower rent for Fourchon’s tenants by 20 percent – a price change that went into effect on April 1, 2015 and will last for one year.
Chiasson said the decision to lower rent will cost the port $3 million in gross revenue, based on revenue numbers from years past. But the port director said the decision to go forward with the discounted rent prices was a good one, because it ensures that business can continue to operate. By lowering the rent, Chiasson said it will keep things chugging along at Fourchon if and when the price of oil goes back up and business returns to normal.
“Our hope with lowering the rent was that we’d keep our tenant base the same – both today and for the long term,” Chiasson said. “That’s why we did what we did. Our tenants were getting pressure from the oil and gas companies to lower their costs, which, of course, trickled down to us. So far, doing that has been successful and has kept things moving along about as well as can be expected.”
Don Briggs, the president of the Louisiana Oil and Gas Association, agrees. He said lowering the rent was a no-brainer for Fourchon if it wanted to keep its tenant base numbers in tact.
“The industry is slower than folks had become accustomed to and companies were struggling to pay,” Briggs said. “That was the best thing for them to do – lowering that rent.”
GROWING EVEN IN THE MIDST OF THE STORM
While waiting for things to get back to normal, Fourchon has taken steps to grow, as well.
“It’s been a little slower than we thought it’d be, but we have done some expansion,” Chiasson said. “Even with as slow as it’s been, we’re taking steps to grow and to move forward.”
Chiasson said work is ongoing to continue to build bulkheads in Slip C of Port Fourchon. The port director said plans are also moving forward on Slip D, which will be the port’s newest addition and expansion in the future.
Slip D’s construction is part of the port’s continued push for northern expansion. It will add 300 acres of developed property to the port, which will create more than 10,000 linear feet of waterfront to Fourchon, once completed. Chiasson said the project broke ground in July and will take six to eight years to fully be completed, which is exactly why work is going on right now.
Times may be tough today, but they likely won’t be in the future when the project would be complete, so the Port has to continue to plan and be ready for expanded growth.
The project is estimated to cost $100 million total. The good news, according to Chiasson, is that when expansion work is done during a slow economic time, it’s often easy to get work done at a more competitive price than normal, as contractors troll the market for jobs.
“The Port Commission has been pretty aggressive in expanding during slow times knowing that the next wave is going to come,” Chiasson said. “We do that so that we can put ourselves in a position to meet the demand when that next wave comes. It’s cyclical. It was like that in the ’80s. It was like that in the ’90s. It was like that after the oil spill. We’re thinking that history is right and is going to repeat. We’re cautiously aggressive. We’re picking the right places to invest the public’s money to get the most bang for their buck.”
STILL AN UNAPPRECIATED NATIONAL TREASURE
Even with all of the improvements in the works, Chiasson and others still believe that Fourchon is an underappreciated treasure to the average American not from the Houma-Thibodaux area.
According to statistics provided by the port, more than 1.5 million barrels of crude oil per day are moved via pipelines through the port. Because of that, nine of the Top 10 Lafourche Parish taxpayers operate from and/or utilize Port Fourchon for some of its operations.
The port services more than 90 percent of the Gulf of Mexico’s deepwater oil production – a business that contributes billions of dollars into the nation’s economy each year – all from a place that looks like a grain of sand on a map.
“People not from here have no clue of the supply chain that their energy has to go through to get to them,” Chiasson said. “They don’t understand that it all starts here.”
“Your area is one of the most important areas in the entire United States of America,” Economist Loren Scott added. “Things that happen at Fourchon dominate your economy, of course. But they also dictate the quality of life and the ways that people live all across the United States of America.”
So when things aren’t going so well, it is a cause for concern. But on Chiasson’s watch, the port has endured hurricanes, slow economic periods, an oil spill and a subsequent moratorium.
The industry recovered from all of the above and grew back bigger than ever.
He has confidence it will happen again, and the nation’s hidden gem will continue to grow more and more to service the industry’s needs.
“It’ll bounce back,” Chiasson said. “It always does. It’s been down before. It’ll be down again. It comes back. We’ve dealt with this too many times before. We know not to overreact.”
