Offshore drilling ban could be a blow to Louisiana economy
The president and Interior Secretary Ken Salazar’s announcement late last week to halt all deepwater drilling in the Gulf of Mexico “at the first safe stopping point” while the Interior Department figures out what regulatory changes are necessary for offshore oil prospecting seemed designed to reassure the nation that drilling would only proceed in a safe and environmentally sensitive manner.
But to those who work in the offshore industry and in the communities at the epicenter of the spiraling disaster from the April 20 Deepwater Horizon rig explosion and oil leak, it smacked of a lack of understanding of the role that the oil business plays in the Louisiana economy.
In the 2008 presidential election, no coastal parishes except for Orleans supported Obama; last week’s offshore drilling announcement only seemed to make his administration even less popular in the oil-affected parishes.
Then again, maybe this is payback, Chicago-style.
Within a very short time, [LA Economic Development Secretary Stephen] Moret believes the state will lose 3,000 to 6,000 direct and indirect jobs.
If the suspensions are maintained, it could rise to 10,000 jobs. And if the moratorium persists while oil prices rise, the state could lose 20,000 jobs over the next 12 to 18 months in the form of lost direct and indirect jobs, and missed job creation opportunities because rising petroleum prices stimulate more energy development.
Since it’s unclear what’s involved with the shut-downs, it’s unclear whether companies will keep their rigs afloat in the Gulf with a skeleton crew or move them to Brazil, which is considered one of the world’s biggest deepwater drilling opportunities.
I think Mr. Moret is low-balling his estimate.
2012 cannot come soon enough.