Americans can’t afford the offshore drilling moratorium

Thomas Pyle President, Institute for Energy Research
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At a time when the economy is reeling and national unemployment hovers just under 10%, the President and Congressional leaders are ignoring the wishes of the American people; seemingly working overtime to drive up energy costs and send jobs overseas by punishing our own energy industry. The President’s insistence on maintaining a ban on deepwater exploration and drilling for oil and gas along with the de facto ban on near shore activity is wreaking havoc on the Gulf Coast’s economy and could easily impact national energy prices this winter.

This week, Congress holds hearings to discuss what is widely seen as a politically-motivated moratorium on deepwater drilling. The President is fully aware that an extended drilling ban would cost thousands of jobs; energy officials within Obama’s own administration have predicted that an extended drilling ban would reduce domestic oil production by 82,000 barrels per day in 2011. The Louisiana Mid-Continent Oil and Gas Association states that nearly 80% of the oil produced in the Gulf comes from wells in the deeper waters. They estimate that the costs of the exploration suspension range between $8.25 million and $16.5 million per day in rig costs; $1 million per day in costs for support boats; and $165 million to $330 million per month in lost wages for all 33 deepwater rigs.

Several left-leaning media outlets recently reported that few jobs have actually disappeared in the wake of the Gulf spill, but those reports are either naive or are deliberately hiding the fact that many energy companies are waiting in costly limbo — hoping that a moratorium will be lifted so they can get back to work. Time is running out for many of these companies that are now forced to look at drilling locations overseas where they can take their rigs and employees for fulltime work. Already two of the 33 deepwater oil rigs have moved to Egypt and the Congo where they are able to explore for oil and natural gas.

Louisiana Governor Bobby Jindal (R) has stipulated that the ongoing economic devastation of the spill may be surpassed by the impacts of the moratorium. Sen. Mary Landrieu (D-LA) recently stated that “the result of this Administration’s decision will still be a substantial loss of jobs — jobs that may not return to the Gulf for years.”

The expansive disconnect between voters and their elected representatives is particularly noticeable with respect to energy policy. A recent Rasmussen poll revealed that 61% of those surveyed rank finding new sources of energy as more important than reducing the amount of energy Americans now consume. Survey after survey indicates that Americans overwhelmingly support domestic energy development, from oil or natural gas. However, this Administration and its Congressional allies remain convinced that making domestic energy more expensive and harder to produce is what’s best for American families.

The assault on affordable energy derived from oil, natural gas and coal is evident throughout recent policy proposals; “cap-and-trade” legislation still lurking in the Senate; the offshore drilling moratorium; higher taxes on oil production and a variety of new regulations readied by unelected bureaucrats at the EPA, just to name a few.

Americans value our domestic energy industry, despite politicized attempts to demonize the hard working men and women who labor — and yes, risk their lives — to deliver the energy we need to fuel our cars and cool and heat our homes. With unemployment already hovering over nine percent, the country can hardly afford the Obama administration’s moratorium on offshore drilling, which advances the Administration’s political ideology at the expense of good-paying American jobs. Once the President understands this, he should lift the drilling moratorium and take steps to strengthen our domestic energy industry, not punish it.

Thomas J. Pyle is President of the Institute for Energy Research.