No Surprise: Drilling Moratorium Costs Jobs

By August 20, 2010Economy, Energy

Big story posted online in advance of Saturday’s Wall Street Journal, “U.S. Saw Drill Ban Killing Many Jobs“:

Senior Obama administration officials concluded the federal moratorium on deepwater oil and gas drilling would cost roughly 23,000 jobs and freeze up to $10.2 billion in oil-industry investment, according to previously undisclosed documents detailing their internal debates….[snip]

The administration hadn’t previously disclosed its estimates of the economic effect of the controversial halt, ordered after the April explosion at a Gulf of Mexico well. The documents doing so were filed in a New Orleans federal court by the Justice Department earlier this week as part of the latest round of litigation over the moratorium.

The moratorium on drilling was represented as one affecting only deep-water operations, but the effect was more encompassing. The Houston Chronicle this week reported on “DISASTER IN THE GULF: Drillers fear sinking in shallow waters“:

A post-oil-spill delay in issuing new federal drilling permits in the shallow waters of the Gulf of Mexico, at first an inconvenience, has suddenly emerged as a real threat to the future of companies in the business, industry executives said Wednesday….[snip]

So far, permitting delays have idled 14 of the 46 available jackups in the Gulf and forced offshore companies to cut several hundred jobs. Each rig employs about 100 workers and supports many additional indirect jobs at supply boat companies, oil field services companies and other businesses.

If the delays continue, 30 rigs could be idled by the end of September, the Chronicle reported.

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