CROWLEY — Baker Hughes is planning on closing its Crowley facility amid continuing lawsuits and a general downturn in the oil and gas industry.
The third largest oil- and gas-service company in the world is set to close the doors on its cement and pumping division in the heart of Acadia, The Advertiser reported.
Baker Hughes isn’t the only company to close down some or all of its operations in Louisiana. The downturn in the oil industry, coupled with litigation, has hit hard for those in the oil and gas industry, especially in the Gulf Coast state.
“I would assume this is just consolidation,” Gifford Briggs, Louisiana Oil and Gas Association president, told The Louisiana Record about why Baker Hughes might be shutting down the Crowley facility. “They’ve got some pretty sizable operations throughout Acadiana, so I would assume two things: one, just general consolidation, and two, the industry continues to more or less be in a downturn, where we’re down from 2,200 rigs down to 550 rigs so companies are going to continue tightening their belts.”
Belt-tightening is something that Briggs has seen from a lot of oil and gas companies in the region in recent years, and he said there are a lot of factors at play in the industry and the area. “Certainly, the legal environment that exits in Louisiana means that there’s less exploration for oil and natural gas in Louisiana, and that likely means that those dollars are being diverted to Texas or other places,” he said. “So as companies sort of look at their footprint, if there’s an opportunity to relocate jobs or people or to employ people in one area or the other, you’re going to choose the ones that are closer to where the activity is, certainly over the long term.”
The ongoing battle over coastal land loss litigation with oil and gas companies has created what might be called a negative business environment for oil and gas exploration and production in Louisiana.
“I’m not going to attribute the closing to the lawsuit or to the legal environment in Louisiana, but certainly the lawsuits, and the coastal lawsuits in particular, weigh heavy on investment decisions and when companies aren’t investing and producing, the service companies that service them are going to go find them, and that certainly is the case,” Briggs said.
Briggs believes that the legal environment in the state is harming the industry. When asked what he sees is necessary for the legislature or general public to do to help return the jobs to the area and entice companies to return their people and investment to Louisiana, he said the first order of business would be to address the civil-lawsuit issues.
“Well, the biggest thing we can do, as I’ve said over and over again, we need to reign in these abusive legacy and coastal lawsuits, and we need to change our rhetoric with regards to them in the state,” he said. “You know, it’s one thing when you’ve got individual landowners suing us — we’ve had that since the beginning of lawsuits — but when the opponent that’s filing the lawsuit ends up being local governments, ultimately the state of Louisiana and the permitting agency that gives you the permit to go operate, you know, that just sends off every red flag that you can possibly imagine.”