The reluctant Gulf warrior

Thomas Pyle President, Institute for Energy Research
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Even as the administration backs off of its devastating offshore drilling moratorium, Louisiana Senator Mary Landrieu is standing firm in maintaining her hold on confirming Jacob Lew as the head of the Office of Management and Budget.  A Democrat herself, she could hardly be accused of spoiling for a political battle with the White House. Rather, it was the Obama administration itself that instigated the fight by sacrificing Louisiana jobs to political expediency with the issuance of the deepwater offshore energy moratorium.

Scientists and industry experts provided a number of alternatives that would swiftly make drilling safer, without shutting down all oil rig operations. President Obama nevertheless imposed a moratorium on Gulf of Mexico drilling last spring as a first resort.  Even with the moratorium lifted, a de-facto moratorium still exists, as the Department of Interior refuses to expediently approve any new permits.  Meanwhile, the Gulf Coast economy continues to reel in the wake of Hurricane Katrina, the BP Deepwater Horizon oil spill, and the administration’s war on domestic energy production.

Noting a report from the Department of Interior issued prior to the moratorium, Landrieu remarked, “I find it stunning that the administration was aware that their actions might eliminate nearly 23,000 jobs in an already faltering economy, and proceeded anyway.  However, that is precisely what they did — they imposed the moratorium in defiance of their own data.”

The impact is likely even worse.  According to a study by LSU Professor Joseph Mason, the administration grossly underestimated how many jobs the drilling ban would cost.  Mason says the ban could cost up to 155,000 jobs.  The economic disaster brought on by the moratorium went far beyond workers on the drilling platforms, extending to the region’s small businesses that rely on revenue from the oil and gas industry, including suppliers, restaurants and grocery stores.

Now the administration is set to impose a host of new regulations on the industry, which will slow down job creation and limit oil production by as much as 12%, while heaping a host of new bureaucratic rules that will cost large companies millions and likely put smaller operations out of business.

Landrieu has appealed to the administration to lift the permitting freeze, supplying figures on direct job losses as well as information on impacted small businesses that depend on revenue from the oil and gas industry.  Still, officials failed to act, while Louisiana families continued to suffer.  As a last resort to get the president’s attention, Landrieu exercised her senatorial prerogative to place a hold on Lew’s OMB confirmation.

Finally, she had the administration’s attention.  Meetings produced assurances that the ban would be lifted within a matter of weeks.  But the Louisiana senator is not a newcomer to Washington politics. For even with the moratorium lifted, she knows that a de facto moratorium will likely continue indefinitely.  In fact, with respect to near-shore oil and gas resources in the Gulf, this is already happening.  Since the BP spill, the Department of Interior has slowed the shallow water permitting process to a grinding halt.

Calling the White House’s bluff, Landrieu announced that her hold would remain in place, explaining that the administration “seems to believe that no new exploration should be allowed to proceed until every single offshore operation is in compliance with 100% of the revised rules, which aren’t even final.”

Maintaining her tenacious hold on Lew’s confirmation, Landrieu has vowed to remain steadfast until administration officials “deliver something more significant in this area.”  Just how long the standoff will remain is anyone’s guess, but what is certain is that Landrieu has rightly placed Louisiana’s jobs above partisan politics and election year antics.

Thomas J. Pyle is President of the American Energy Alliance.