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Guest Blogger: David Holt on the Costs of a Drilling Moratorium
Posted By David Holt On June 2, 2010 @ 5:00 pm In Energy | Comments Disabled
In the wake of the moratorium on offshore drilling projects that President Obama announced late last month, The New Orleans Times-Picayune  has attempted to measure the cost of so much disruption to one of Louisiana’s core industries.
The result? A conservative estimate – assuming a shutdown of just six months – suggests the moratorium could cost the state $2.97 billion and 7,590 jobs directly related to the oil industry. That is not counting all the other industries indirectly related to oil production and exploration. The story states that each job in the oil industry is believed to support four other non-industry jobs that provide products and services related to drilling. Of course, it’s also not measuring the impact to other Gulf states, namely Texas.
The paper’s estimated impact, moreover, is not accounting for the possibility that once oil production is halted it might not be so easy to restart. To name just one potential problem, rigs could be redeployed to other sites around the world. For that reason, one industry group fears that even if the official moratorium lasts just six months, it could effectively drag on for two years. These are complex operations and cannot just be switched off and on.
In fact, the Times-Picayune states that one of the biggest concerns with the shutdown is general confusion, over precisely which operations are impacted, how long the moratorium is likely to last, and what becomes of rigs left idle. As of Monday, a number of companies operating in the Gulf were reportedly still unsure if their operations were covered by the moratorium.
As we navigate all of this chaos and confusion, we need to keep in mind that everyone is trying put in place measures to make our industry safer. We need to have some patience for the delays and disruptions that result from this important work.
But we also need to discourage policies that threaten to make a bad situation worse, costing people their livelihoods without contributing any improvement to industry safety. While we must hold those responsible accountable, we also must urge lawmakers to consider the future damage – to individual workers, and local economies – of the policies being put in place now.
David Holt is the President of the Consumer Energy Alliance .
The views expressed by guest bloggers on the Foundry do not necessarily reflect the views of the Heritage Foundation.
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URL to article: http://blog.heritage.org/2010/06/02/guest-blogger-david-holt-on-the-costs-of-a-drilling-moratorium/
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 The New Orleans Times-Picayune: http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/06/energy_companies_race_to_meet.html
 Consumer Energy Alliance: http://consumerenergyalliance.org/
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