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.”

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.

The Senate has gone on recess until September 13, but a few Senate committee chairmen and members are scheduling field hearings during the month away from Washington. They look like interesting sessions, with some manufacturing implications.

The Senate Commerce Committee has a field hearing set for Tuesday in the far, far north of Barrow, Ak., “The Changing Arctic: Implications for Federal Resources and Local Communities.” Sen. Mark Begich (D-AK) is a member of the committee.*

Sen. Mary Landrieu (D-LA), who chairs the Senate Small Business Committee, is holding a field hearing Tuesday in Lafayette, La., “The Deepwater Drilling Moratorium: An Economic Disaster for Louisiana’s Small Businesses?”

Sen. Kent Conrad (D-ND), chairman of the Senate Budget Committee, is tending to home-state issues with three field hearings in eastern North Dakota. (During the last recess in June, he held field hearings in western North Dakota.)

• Monday, West Fargo, “Devils Lake Flooding Disaster: A Red River Valley Perspective”
• Tuesday, Lisbon, “Devils Lake Flooding Disaster: How Should Downstream Impacts be Addressed?” (A great, great location for the hearing: The Stake Out Supper Club and Lounge)
• Wednesday, Wahpeton, “Transportation Infrastructure’s Role in Economic Growth,” with testimony from representatives from Bobcat and Cargill.

Flooding in the enclosed Devils Lake Basin is an amazing natural phenomenon, the result of 17 wet years during which Devils Lake has risen 30 feet and quadrupled in size. The associated costs are in the hundreds of millions of dollars. (Nearly $200 million for roads alone.)

* The hearing in Barrow was planned before the death of Sen. Ted Stevens, the former chairman of the Senate Commerce Committee. The current chairman, Sen. Jay Rockefeller (D-WV), paid tribute to Stevens in a statement.

Attorneys for the Department of Interior will be in federal court in New Orleans Wednesday to argue for the dismissal of the suit by Hornbeck Offshore Services Inc. of Covington, La., challening the federal moratorium on deepwater drilling. (New Orleans Times-Picayune, “2 offshore drilling firms to argue the legality of Obama moratorium.”

We recommend this opening statement to Interior’s lawyers: “Your honor, we ask you to dismiss this lawsuit because it has become moot. Secretary of Interior Ken Salazar today ordered the lifting of the moratorium.”

Absent that smart choice, the legal question is whether Interior has the authority to issue a moratorium despite its failure to lay out solid, fact-based case for the action. The Administration has, in effect, embraced the “precautionary principle” — because there’s some slight, slight, slight, slight danger of another catastrophic spill, drillers must affirmatively prove that there is NO risk. And you can’t prove a negative.

U.S. District Court Judge Martin Feldman has previously ordered the lifting of the federal moratorium because of Interior’s “arbitrary and capricious” case versus the economic harm the halt to drilling inflicted on the Gulf Coast.  But since then, the Administration has analyzed the economic impact and concluded the risks justify the effect on local economies and jobs. Right? There’s been an in-depth, serious analysis?

From “Meet the Press,” Sunday, August 8, David Gregory interview with White House energy and environmental advisor Carol Browner:

MR. GREGORY:  You talk about all the work here being done for safety.  Did the White House do any economic analysis about what a moratorium–what impact it would have on jobs in the Gulf Coast?

MS. BROWNER:  There is, there is an economic analysis being done.  It’ll be ready later…

MR. GREGORY:  But it was never done before the moratorium was put in place? Because those who are down there say, “You know what, the moratorium by the Obama administration is far worse than the spill itself.”

MS. BROWNER:  Here’s what we knew the minute the accident happened:  that if there was another accident of equal size, we didn’t have the equipment to respond.  All the boats, all the resources were being used.  We had a close–over 6,000 vessels, we embedded private citizens into this effort.  It was a massive undertaking, and if another accident were to occur, we would not have had the ability to respond.  And, you know, that formed a basis for putting a pause on drilling while we looked at the safety, while we looked at how we would contain it, ultimately, and then clean it up.

Well, since Interior needs an economic analysis, here’s a solid, even conservative one offered by Joseph R. Mason, the chairman of banking at the E.J. Ourso School of Business, Lousiana State University, at a Senate Small Business Committee on July 27, “The Deepwater Drilling Moratorium: A Second Economic Disaster for Small Businesses?”

Mason:

These projections are lower than those presented by other studies because I estimate the period of new production loss to be only six months. However, if we were to extend the loss in new production in our model to the 18 months assumed by other sources, we would see a loss of 36,137 jobs nationally, 24,532 jobs lost in the Gulf region, and 14,156 jobs lost in Louisiana.

His study also examines the loss of earnings and state tax revenues.

Michael Bromwich, the head of the Bureau of Ocean Energy Management Regulation and Enforcement – formerly the Minerals Management Service — last week said the Administration might lift the moratorium early: “I think it’s everybody’s hope that we will feel comfortable enough that the moratorium can be lifted significantly in advance of Nov. 30.”

Wednesday, August 11, would be significantly in advance of Nov. 30.

Coverage …

• USA TODAY, Aug. 8, “Deep-water drilling ban is hurting related businesses“
• New Orleans Times-Picayune, Aug. 8, editorial, “Obama administration should hasten the end of drilling moratorium.”

Senate Majority Leader has pulled the plug, flipped the switch, powered down and shut off Senate consideration of an “energy bill” this week.

Reid announced the change in plans to reporters this afternoon. He blamed Republicans, saying, “We tried jujitsu. We tried yoga. We tried everything we can with Republicans to get them to come along with us and be reasonable.”

A Fox News blog reports this edifying statement: “Sen Bob Menendez, D-NJ, chairman of the DSCC, bashed Republicans for having ‘special interest’ policies and said this would be the key question of the 2010 elections: ‘Whose side are you on?’”

The bill would have lifted the liability cap on offshore drilling accidents, driving all but the largest operators out of the Gulf of Mexico. More …

• The Hill, “Reid abandons oil-spill, energy legislation“
• AP, “Senate Dems delay vote on oil spill, energy bill“
• Mother Jones, “Reid Punts Spill Bill to September“

Right before breaking for its six-week August recess, the House of Representatives voted to pass a bill that, if it became law, would raise the cost of energy and drive out energy producers from the Gulf of Mexico and other offshore sites.

From all that we hear, the Senate will have a difficult time moving on any “energy” bill this week, especially with any language to eliminate the liability cap on accidents from offshore activities. Unlimited liability would disadvantage smaller domestic energy producers.

The House-passed bill is H.R. 3534, the Consolidated Land, Energy, and Aquatic Resources Act. It passed by a vote of 209-193, with 30 members not voting, nine Democrats and 21 Republicans. Those 30 members could have defeated the bill, but plane reservations had been made.

The bill did include a good amendment sponsored by Rep. Charlie Melancon (D-LA) to lift the Obama Administration’s moratorium on deepwater drilling for rigs that meet safety requirements.

The National Association of Manufacturers issued a statement, “Manufacturers: House Energy Bill Is Setback for America.”

The American Petroleum Institute issued a critical statement from API President Jack Gerard after the vote, “API says House-passed spill bill anti-jobs, anti-consumer, anti-energy.” Excerpt:

The House bill passed today will kill jobs, threaten our fragile economic recovery and place our energy security at risk. This is an anti-jobs, anti-consumer and anti-energy bill. Instead of addressing the risks of offshore development by improving safety and establishing a robust system for covering the costs of possible future accidents, this bill effectively bans development and sends thousands of workers in offshore communities to the unemployment lines.

The House has just started debating the rule for H.R.3534, the Consolidated Land, Energy, and Aquatic Resources Act, i.e., the House “energy” bill. Or was that Waxman-Markey?

The National Association for Manufacturers just sent a “Key Vote” letter to the House, acknowledging that the bill has been made less economically damaging than earlier versions, but would still do too much harm to the jobs and American energy security.

From the “Key Vote” letter:

Manufacturers believe it is critically important to understand the causes of the Gulf of Mexico accident and its long-term environmental impacts before enacting policies that could make a serious problem much worse. While we appreciate efforts made earlier this week to improve H.R. 3534, NAM members continue to oppose the bill, as it would, in its current form, drive up energy costs, create uncertainties in the availability of supply and adversely affect U.S. jobs.

While there appears widespread agreement in the industry and on Capitol Hill that the $75 million liability cap needs to be updated, requiring an unattainable level of insurance coverage for domestic energy producers on the Outer Continental Shelf is not the solution. By eliminating the cap, H.R. 3534 would effectively retain the moratorium on offshore drilling for all but a handful of the world’s largest international companies, forcing the vast majority of American companies out of U.S. waters.

NAM’s key vote letters are developed and approved through a committee of representatives of manufacturing companies of all sizes. The NAM uses the votes to assess a member of Congress’ record on manufacturing issues.

On the House floor, Rep. Jim McGovern (D-MA) just characterized the upcoming debate: If you support the bill, you support the American people. If you oppose the bill, you’re an apologist for Big Oil.

That’s politics, not persuasion.

UPDATE (9:58 a.m.): Rep. Pete Sessions (R-TX) just read the NAM letter on the floor, noting that the NAM represents “jobs creators.” Thank you, Congressman.

The American Energy Alliance on Monday released an analysis of the economic impact on the Obama Administration’s moratorium on deepwater drilling in the Gulf of Mexico. The findings:

• Over 8,000 jobs lost in the Gulf Coast region
• Over 12,000 jobs lost across the country.
• $700 million in lost wages due to the moratorium.
• $2.1 billion in economic activity lost in the Gulf Coast region and nearly $2.7 billion lost nationwide.

The analysis, “The Economic Cost of a Moratorium on Offshore Oil and Gas Exploration to the Gulf Region,” was conducted by Joseph Mason, the Louisiana Bankers Association endowed professor of banking at Louisiana State University. In the release, Mason commented:

The data are clear. The moratorium will cost the Gulf Coast region jobs, money, and economic development. In fact, the moratorium could be more costly, than the oil spill itself. The region is already struggling from devastating losses from Hurricane Katrina, Hurricane Gustav, and the nation’s depressed economy. By stifling one of the area’s primary economic engines, the administration is crippling the local economy and risking long term consequences.

Gulf Coast citizens will protest the moratorium on Wednesday in Lafayette, gathering at the Cajundome for the Rally for Economic Survival.

Mason appeared in a Bloomberg interview to discuss his finding, with the video at WashingtonPost.com here. (The Post and Bloomberg launched a new content-comingled business website this week. The Post’s business coverage had suffered after it dropped its weekday business section in March 2009.)

Nola.com, the Times-Picayune’s website, also provides an update on the litigation challenging the Interior Department’s moratorium:

Meanwhile, a lawsuit over the moratorium brought by Hornbeck Offshore Services Inc. of Covington continues.

Last week, a suit which represents the interests of shallow water drilling companies, Ensco Offshore Co. v. Interior Secretary Ken Salazar et al, was consolidated into the Hornbeck suit. Shallow water drillers believe that they face a de-facto moratorium because of the ban on deepwater oil exploration.

The Louisiana Oil and Gas Association is reporting on plans for a rally next Wednesday at the Lafayette Cajundome, the Rally for Economic Survival, protesting the federal moratorium on deepwater drilling in the Gulf of Mexico that is costing jobs just as the region needs for more economic activity and employment.

Don Briggs, president of the association, commented, “I have never seen so many people so focused and dedicated to a cause. I hope the entire nation will see the large crowd we assemble at the Cajundome, hear the words of our diverse and distinguished speakers and realize how important lifting the moratorium is for the entire country. More importantly, I hope President Obama will see the people in the Cajundome – representing all walks of life – and hear their message to lift the moratorium immediately.”

One of the speakers will be Louisiana Gov. Bobby Jindal, who has an op-ed in today’s Washington Post, “Ban on deep-water drilling adds insult to injury“:

[The] federal government unwisely chose to add insult to injury by decreeing a moratorium on deepwater drilling in the gulf. This ill-advised and ill-considered moratorium, which a federal judge called “arbitrary” and “capricious,” creates a second disaster for our economy, throwing thousands of hardworking folks out of their jobs and causing real damage to many families. Now this federal policy risks killing 20,000 more jobs and will result in a loss of $65 million to $135 million in wages each month….

Let’s be clear: This moratorium will do nothing to clean up the Gulf of Mexico, and it is already doing great harm to many hardworking citizens. The effects will extend well beyond Louisiana. Since the moratorium was announced, America has already lost two rigs to foreign countries. More drilling companies are negotiating right now to work elsewhere. Every time we decrease our level of production, we make America more dependent on foreign sources of energy.

Diamond Offshore Drilling has announced the move of rigs to off the coast of the Congo, Africa, where the oil it produces could wind up being shipped back to the United States.

The Louisiana Mid-Continent Oil and Gas Association offers more details on the economic impact.

• Each drilling platform averages 90 to 140 employees at any one time (2 shifts per day), and 180 to 280 for 2 2-week shifts
• Each E&P [exploration and production] job supports 4 other positions
• Therefore, 800 to 1400 jobs per idle rig platform are at risk
• Wages for those jobs average $1,804/weekly; potential for lost wages is huge, over $5 to $10 million for 1 month—per platform.
• Wages lost could be over $165 to $330 million/month for all 33 platforms

The first meeting of the President’s  National Oil Spill Commission in New Orleans Monday (agenda) included nearly as much testimony on the Obama Administration’s moratorium against deepwater drilling as it did on the Deepwater Horizon accident. Many Gulf Coast residents view the moratorium — another one was issued Monday by Interior Secretary Salazar — as destroying jobs just as they’re most needed.

From Bloomberg, “Economic Damage of Drilling Ban May Dwarf Oil Spill“:

July 12 (Bloomberg) — The economic damage from the BP Plc spill in the Gulf of Mexico will be dwarfed by the Obama administration’s moratorium on deep-water drilling, the chief executive officer of a New Orleans business group said.

The six-month drilling ban, which the U.S. Interior Department revised today following lawsuits from local businesses, may affect as many as 24,000 jobs in Louisiana, Michael Hecht, president and CEO of economic-development group Greater New Orleans Inc., told a presidential commission today.

“Rigs were starting to leave” to drill in other nations, Hecht told reporters after testifying to the commission created by President Barack Obama last month. “The economic impact from the oil spill itself, however broad and long-lasting, will likely be dwarfed by the impact from the moratorium.”

National Association of Manufacturers’ President John Engler issued a statement yesterday on the moratorium:

Today’s announcement by the Obama Administration to place a new moratorium on any deep-water floating facility with drilling activities is a mistake. Manufacturers believe it is critically important to understand the causes of the Gulf of Mexico accident. However, canceling existing leases sets our country back in achieving economic and energy security while putting jobs at stake.  The U.S. District Court in the Eastern District of Louisiana and the Fifth Circuit Court of Appeals have already spoken, and this new moratorium will only put our nation’s economy at a greater disadvantage.

 Manufacturers who make and supply equipment, services, engines, boats and materials such as steel and concrete will also suffer massive economic consequences as a result of the Administration’s overly broad moratorium. 

The expansion and development of the Outer Continental Shelf is vital to affordable, reliable energy and the long-term health of our economy and the prosperity of American workers.

Manufacturers will continue to work with the Administration and Congress to lift this new moratorium and expedite delivery of these valuable resources to American consumers.