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Jindal vs. Obama: Time to End the Drilling Moratorium

Posted By Mike Brownfield On June 21, 2010 @ 3:00 pm In Energy | Comments Disabled

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First there was Hurricane Katrina, then there was the Deepwater Horizon disaster. Louisiana Gov. Bobby Jindal now says that the newest threat to the economy of his state is President Barack Obama’s moratorium on deepwater drilling.

Jindal today joined in support of oil service companies [2] who are suing to halt the six-month ban on drilling in the Gulf of Mexico, issued by the Minerals Management Service on May 30. A federal district court judge is hearing arguments on the lawsuit today and will rule no later than Wednesday [3].

In an amicus brief filed with the court [2], Jindal argues that the moratorium is disastrous to his state’s economy:

The State of Louisiana, more than any other public or private entity, has been most adversely affected by the Deepwater Horizon disaster. The drilling moratorium imposed by [the government] will only compound the State’s problems, effectively turning an environmental disaster into an economic catastrophe for the State. Every day the moratorium is in effect costs the State untold millions of dollars.

To put numbers on it, Jindal states that Louisiana is vulnerable to the moratorium because it is home to 19 active refineries, which “rely significantly on offshore production in the Gulf of Mexico for their raw materials.” The offshore oil and gas industry, which has a $3 billion per year economic impact on the state, includes salaries and wages of workers on the rig, as well as secondary industries including those who do business with the oil industry, such as boat companies, tool rental companies, food service, and others. As Jindal argues in his brief:

Because of the pervasiveness of the oil and gas industry in Louisiana, the entire economy is affected, from grocery stores and restaurants to banks and schools.

Jindal points to studies showing that within five months, the moratorium will result in a layoff of 3,339 Louisiana workers and a loss of 7,656 additional jobs, while the state expects to lose more than 20,000 existing and potential new jobs over the next 12 to 18 months.

The governor of Louisiana isn’t the only one pointing out the tremendous impact of the drilling ban. Last Tuesday, 19 Gulf lawmakers, including Democrat Rep. Charlie Melancon (LA), held a press conference demanding an end to the moratorium. (Today, Melancon gave President Obama a “C” [4] for his response to the oil spill crisis.) There’s good reason for the uproar over the moratorium. The Heritage Foundation’s Nick Loris writes [5]:

According to Burt Adams of the National Ocean Industries Association, in the Gulf Coast, more than 200,000 jobs are tied [6] to the offshore drilling industry and 35,000 workers are directly involved each day when the rigs are in use. The American Petroleum Institute forecasts [7] that if the drilling ban continues, more than 120,000 jobs could be lost in the Gulf Coast and key resources abandoned or moved elsewhere.

Jindal notes that the government’s sole argument for the duration of the ban is that they need “time to step back and investigate both the root causes of the Deepwater Horizon disaster and to implement safety measures.” Given the consequences of the ban, one might hope that the Obama administration can offer more reason than that to justify the economic harm it is piling on Louisiana and the Gulf region.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/06/21/jindal-vs-obama-time-to-end-the-drilling-moratorium/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/Jindal-Bobby-10-6-21.jpg

[2] joined in support of oil service companies: http://www.gov.state.la.us/index.cfm?md=newsroom&tmp=detail&articleID=2251

[3] will rule no later than Wednesday: http://www.reuters.com/article/idUSTRE65K4OT20100621

[4] gave President Obama a “C”: http://tpmdc.talkingpointsmemo.com/2010/06/melancon-obama-gets-a-c-on-oil-spill-response.php

[5] Nick Loris writes: http://www.foundry.org/2010/06/15/the-presidents-oil-spill-speech/

[6] more than 200,000 jobs are tied: http://blog.energytomorrow.org/2010/06/energy-tomorrow-radio-episode-109---burt-adams-discusses-economic-effects-of-moratorium.html.

[7] forecasts: http://blog.energytomorrow.org/2010/06/pressure-mounts-against-deepwater-drilling-ban.html

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