The People of America's Oil and Natural Gas Indusry

New Study: Moratorium Could Cost Nearly 20,000 Gulf Jobs

Jane Van Ryan

Jane Van Ryan
Posted September 22, 2010

There have been numerous reports published over the last few months about the impact of the administration's de facto drilling moratorium on jobs and the economy in the Gulf region. The latest report released yesterday is authored by LSU professor Dr. Joseph Mason who finds that the Gulf region will lose more than 19,500 jobs, $5 billion in economic activity and nearly $240 million in state and local tax revenues during the six-month moratorium.

It's important to note that the 19,536 job loss estimate from Mason's report is 40 to 60 percent higher than the 8,000 to 12,000 jobs lost that the Obama administration estimated earlier this month, reflecting a significant difference between the two studies.

In the report, Dr. Mason is critical of the administration's analysis:

The Inter-Agency Report uses undisclosed survey methods to estimate the decrease in industry spending resulting from the drilling moratorium, reduces the input effect of decreased industry spending derived from the survey by $141 million for no methodologically justifiable reason, and cuts the output, estimated job losses, by an ad hoc factor of 40-60 percent. Moreover, the Inter-Agency Report glosses over estimates of lost economic output, wages, and state and local taxes that are vital to the affected regions.

While economists argue over the figures, one thing is clear: The moratorium is having a negative impact on the Gulf economy. The moratorium should be lifted immediately so Americans can get back to work, producing the domestic energy for U.S. consumers.

The longer the moratorium continues, it becomes increasingly likely that more rigs will move out of the Gulf and take American jobs with them. Four rigs are in the process of leaving or already have left the Gulf.

So far nearly 170,000 Americans are participating in the Virtual Rally for Jobs this week and calling on Congress to support smart energy policies that promote domestic resources, protect and create jobs, and enhance our energy security. In this time of economic uncertainty and high unemployment, Congress and the administration should be doing everything they can to put people back to work and grow the economy.