The Administration Is Killing Even More Energy Jobs Than We Thought

by Little Miss Attila on August 11, 2010

Especially in the Gulf of Mexico, where they can afford to take a huge economic hit right around now. Oh . . . wait. Maybe not. Read it and weep:

Lawyers representing Interior Secretary Ken Salazar were back before U.S. District Judge Martin Feldman in New Orleans Wednesday, seeking to fend off court challenges by an offshore drilling services firm to the newest set of industry rules that Salazar instituted on July 12. Those rules were meant to preserve Salazar’s original moratorium order, which Feldman ruled unconstitutional on June 22, and to address the concerns articulated by the judge in his ruling.

But some industry analysts say Salazar’s revised rules go further than his first moratorium order, which was set to last until November 30. The Obama administration said the moratorium was necessary to strengthen the safety of offshore drilling operations in the wake of the April 20 explosion and oil spill aboard the Deepwater Horizon well, operated by British conglomerate BP. The accident killed eleven rig workers and unleashed an estimated 5 million barrels of crude oil into the Gulf.

“They’re painting the getaway car a different color,” said Dan V. Kish, senior vice president for policy at the Institute for Energy Research in Washington. Kish said the original moratorium applied only to drilling rigs operating in 500 feet of water or deeper, but that the July 12 order by Salazar applies to all floating rigs in the Gulf.

What’s more, Kish said there are effectively two moratoria in place: the formal one, targeting deepwater drilling, and an informal one targeting shallow-water drilling operations. “About half of the rigs in the shallow waters of the Gulf are not operating,” said Kish, “because they can’t get permits from the government agency that is supposed to give them permits. So, in essence, what’s happening is that much of the fleet of deep- and shallow-water rigs in the Gulf of Mexico, which supplies a third of our domestic oil, are being laid up, put in cold storage, awaiting the government to make a decision one way or the other.”

Analysts said that of the thirty-three deepwater rigs in the Gulf, along with another eight under construction and committed to operate in the Gulf, at least four have already left, or are preparing to leave, the U.S. for foreign shores, pursuing contracts in emerging markets like the Egypt, the Congo, Brazil, and Greenland.

Remember how we’ve been calculating that the current Gulf moratorium would cost tens of thousands of jobs? Well, we’re off by about an order of magnitude:

Smith calculated that current restrictions effectively halting shallow- and deepwater drilling in the Gulf account for the loss of a combined 137,000 jobs, and impose a cost of $3 billion in “payroll effects,” with Louisiana consequently suffering a loss of $300 – $400 million in tax receipts. Smith’s assessment is in line with some of the projections put forward by Dr. Joseph R. Mason of Louisiana State University, who estimated in a recent analysis that the moratoria will inflict “broad economic losses within the Gulf region and throughout the nation as a whole,” to the tune of $2.7 billion in economic activity.

“The administration is in thrall to the environmental community, unfortunately, and as a result, they’re playing that card, and I think to try and slow up, or increase the cost of, hydrocarbons,” said Smith. “I don’t blame them for doing that; I just think that’s the reality….After the [1989] Exxon Valdez accident, after the [1969] Santa Barbara accident, we certainly did study the accidents to figure out what went wrong and then take some corrective action. But we didn’t shut down the industry in the meantime.”

Actually, we slowed it down considerably on the West Coast—in California in particular. But that’s fine, because California can afford not to have those jobs right now . . . oh, wait. Maybe not.

Remember the “No Zone”? That was created in response to the long-term moratoria that were in effect before the Gulf Oil Spill:

<i>And we've gone downhill from here. Because, you know . . . we can <b>afford</b> it.</i>

And we've gone downhill from here. Because, you know . . . we can afford it.

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{ 2 comments… read them below or add one }

ponce August 11, 2010 at 3:51 pm

Nothing says Real Research! like the Institute for Energy Research, home of oil industry-funded climate change denial on demand.

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Tom Billings August 12, 2010 at 11:19 am

Thanks for the info, Miss. Of course, since we know that climate alarmists are totally pure in their intellectual pursuit of knowledge, and that they could never try to get more lab support money from the pols by thumping the tub for what isn’t happening, or for cessation of industrial society, while denying that mitigation technologies are a superior response to any real climate change, we can rest assured in their truths.

The greed and evil, of the corporate managers is assumed by people like ponce, and there will be no rational debate there.

For those who prize industrial society because they have studied the history of what came before it, the bigotry against other people’s market freedoms, and the corruption of the Cook County machine writ large in DC, is a much greater concern.

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