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U.S. Chamber: Restart Gulf oil drilling; redouble safety efforts (6/29)

June 29, 2010
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Last week a federal judge halted the Obama administration’s six-month moratorium on Gulf oil drilling, stating the “the administration acted arbitrarily and capriciously in issuing the moratorium.” The administration has promised to issue a new moratorium and to appeal the judge’s decision.

Following a meeting with Gulf region business leaders in Baton Rouge, Louisiana, the U.S. Chamber of Commerce this week is intensiying its efforts to convince the Obama administration to reconsider its six-month standstill on offshore exploration in the Gulf of Mexico. The moratorium imposed by the U.S. Department of Interior last month has become a de facto moratorium on all offshore exploration and is leading to thousands of lost jobs and billions of lost government revenue, according to a U.S. Chamber press release.

“The lack of clear direction on new offshore drilling rules and regulations from the administration has had a chilling effect on activity in the Gulf,” said Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy. “While a renewed focus on safety measures, spill prevention, and advanced technology must continue to be pursued aggressively, it must be concurrent with responsible development. Keeping American energy resources offline in the Gulf will only lead to sending more money overseas for oil, less energy security in the short- and long-term, and the loss of thousands of American jobs in a region that cannot afford this hit.”

Already weakened by the devastating accident at the Macondo rig in April, Louisiana faces losses of up to 10,000 jobs this summer if the moratorium persists, with more than 20,000 job losses possible in the next 12-18 months, according to the Louisiana Department of Economic Development. Offshore operations in the Gulf of Mexico support more than 150,000 jobs and account for more than 30% of domestic oil production. In addition, energy contributes $65 billion to Louisiana’s $210 billion economy.

In an effort to assess the economic damages from the spill and subsequent moratorium, the U.S. Chamber has been on the ground meeting with hundreds of members in the region, with plans to report its findings back to administration officials, along with the latest data quantifying the impact of the moratorium.

“We must avoid snap decisions following the spill that would threaten U.S. energy security and harm our economy,” Harbert said. “Ending this moratorium while redoubling our focus on safety will ensure that we have the American energy, jobs, and growth needed to rebuild the Gulf region and ensure a competitive 21st century economy.”

Sixty-four percent of active leases in the Gulf are for deepwater operations (more than 1000 feet) and at least 20 different companies were operating deepwater rigs. Due to the ongoing moratorium, companies have signaled plans to move their equipment and operations to other countries, citing mounting costs to keep rigs idle. The rigs affected by the moratorium passed federal safety inspections in the immediate aftermath of the April spill, and were determined to be safe for operations.

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