Late last month, President Obama issued a six-month moratorium on deepwater drilling, effectively forcing many operators with perfect safety records to shut down. This week, a federal judge in New Orleans blocked the moratorium, bringing welcome news to the tens of thousands of Gulf residents who rely on oil & gas to manufacture, transport, sustain, pay bills… to live.
And then a few hours later, the Obama Administration vowed to appeal that ruling.
Clearly, there is a lot of work to be done right now in the Gulf of Mexico. But engaging in a protracted legal battle of this sort is counterproductive to all parties attempting to move forward following the tragic explosion last spring. CEA applauds the ruling by U.S. District Judge Martin Feldman, which will help keep jobs in the region and help support a strong domestic energy industry at a critical point in time when we are working to reduce our dependence on foreign sources of fuel. And while we have always maintained that a six-month moratorium would make a bad situation worse, we are particularly concerned that a lengthy legal battle could serve to keep many rigs shut even longer than six months, while posing an unnecessary distraction to the important work at hand.
What’s at stake? The Wall Street Journal reports that by the end of this week, eight of the 33 rigs covered by the moratorium will have left the region (and.. what about those rigs that produce only natural gas? What is the justification for shutting those rigs down too?). And because of the steep daily costs of operating a rig, those that depart and begin drilling in another region are not likely to quickly return. What’s at stake is the future of a vital industry.
And while the potential loss of jobs is massive, the potential economic impact of a moratorium would be much more far-reaching. Deepwater drilling in the Gulf of Mexico accounted for 23% of all the oil produced in the United States last year.
Any policy that cuts into that supply impacts all of us – consumers, families, truckers, seniors and small businesses all around the country.
Taking our conventional energy resources off the table before alternative energy sources are ready for prime time will have significant negative impacts on our economy.
We all want a domestic oil industry that is productive and safe. But we also agree with Judge Martin Feldman that a lengthy moratorium is an “arbitrary” response that will serve no real purpose but could do a lot of damage.
