Jobs versus the Drilling Moratorium, Oil and Gas Taxes

By September 3, 2010Economy, Energy, Taxation

Responding to today’s report the national unemployment rate had risen to 9.6 percent in August, President Obama made a statement at the White House expressing concern about joblessness. He then continued:

But I want all Americans to remind themselves there are better days ahead. Even after this economic crisis, our markets remain the most dynamic in the world. Our workers are still the most productive. We remain the global leader in innovation, in discovery, in entrepreneurship.

That’s right, and the President’s reminder is useful as context and reassurance.

Still, the statement must clank painfully against the ears of all the people who are out of work or who face the loss of their jobs because of Administration policies on energy, specifically the moratorium on deepwater drilling, and the proposals in Congress to raise taxes on the oil and gas industry. On Wednesday, about 5,500 people, including a heavy representation of energy workers, workers, turned out for “Rally for Jobs” events in held in Houston, Port Arthur and Corpus Christi to protest those policies.

As Jack Gerard, President of the American Petroleum Institute, observed, “Today energy citizens in Texas sent a clear signal to Congress that lawmakers should focus their efforts on reviving our economy and creating more jobs. U.S. unemployment is high and Americans are increasingly concerned about the slow pace of economic recovery.” That message certainly resonates even more today with the latest unemployment report.

API has put together a video report on the Wednesday’s rallies at the EnergyTommorow blog, “Energy Workers Fight for Their Jobs.” More events are scheduled next week in Canton, Ohio, Farmington, N.M., and Joliet, Ill.

The drilling moratorium’s toll on jobs continues to add up. The 33 drilling platforms support between 800 to 1,400 workers each – offshore and on.  This means that as many as 46,200 jobs could be idled by the moratorium in the short term. If a moratorium carries forward, API estimates the loss of jobs could reach 120,000 by 2014. And of course, the economic activity that normally flows through local communities is stifled. (For more figures, see this report from the Louisiana Mid-Continent Oil and Gas Association.)

With the moratorium, it’s as if the Administration is saying: “Jobs. JOBS! Just not those jobs.”

But wasn’t there another rig fire on Thursday? Doesn’t that prove the need for a moratorium?

Only if the standard is the impossible to meet “no risk, ever.” As Charlotte Randolph, president of the Lafourche, La., Parish and an outspoken critic of the moratorium, told The Associated Press, the outcome of Thursday’s platform fire proved that the oil and gas industry practices effective safety procedures: “The people were safely recovered. The oil did not spill. It’s everything the Deepwater Horizon was not.”

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