The People of America's Oil and Natural Gas Indusry

High Stakes in the Gulf

Jane Van Ryan

Jane Van Ryan
Posted June 30, 2010

About one-quarter of U.S. oil production and nearly 10 percent of natural gas production in the Gulf of Mexico has been shut-in due to Hurricane Alex, the first June hurricane to develop in the Atlantic region since 1995.

The federal government reported yesterday that 28 production platforms and three rigs had been evacuated as operators moved personnel to safety. The storm is expected to make landfall on Wednesday near the Texas-Mexico border.

As oil workers wait to return to their offshore jobs, thousands of others are wondering about whether they will have jobs under the administration's deepwater drilling moratorium.

According to an Oil Daily report, Sen. Mary Landrieu (D-LA) estimates Louisiana alone could lose up to 38,000 jobs. MidSouth Bank President Rusty Cloutier told Oil Daily that the worst of the layoffs could occur along U.S. Highway 90 from Lafayette to New Orleans, an area called "America's Energy Corridor." An estimated 2,000 oil and natural gas companies, ranging in size from small businesses to major corporations, are located in that area.

To explain their concerns about the moratorium, eight drilling operators sent a letter to Interior Secretary Ken Salazar yesterday. They wrote:

"...we now stand at the point at which continued delay and uncertainty regarding federal policy toward offshore drilling is inflicting serious economic hardship and job loss to communities along the Gulf Coast. Because drilling rigs are highly mobile, many will leave the Gulf of Mexico for distant parts of the world, taking thousands of jobs with them. Strategic energy infrastructure and experienced personnel will be lost for the foreseeable future." (Times-Picayune)

While employment worries continue to mount along the coast, Congress is considering numerous bills addressing the Gulf oil leak. Some would lift the current liability cap for drilling accidents, and one sponsored by Sen. Robert Menendez (D-NJ) would remove it entirely.

Others would alter the government agency that oversees energy development on federal lands and offshore. And still more bills would apply new regulations to offshore energy development, such as the Blowout Prevention Act which, according to blogger Marlo Lewis, could virtually prohibit all future offshore drilling.

Offshore drilling produces 30 percent of the United States' oil and 13 percent of its natural gas. And energy demand is growing, not shrinking. With so many jobs hanging in the balance and with America's energy security at stake, Congress should consider these bills carefully to protect the needs of economy while also protecting the environment and the taxpayer.