Don Briggs – Louisiana Oil & Gas Association -

In response to the disaster created by the tragic sinking of the Deep Water Horizon drilling rig off the coast of Louisiana, President Obama has decided to cancel the August offshore drilling lease sale in the Western Gulf and off the coast of Virginia.  In addition, companies producing our nation’s necessary energy needs in the Gulf of Mexico will be forced to suspend action on all deepwater exploratory operations. This week a White House official was quoted as saying, “The president’s eyes have been opened” in regards to the risks of offshore drilling.  Maybe some of the following information will open the President’s eyes to what his actions will mean not only for the oil and gas industry but also the entire U.S. economy.

In the Gulf of Mexico there are roughly 48 rigs drilling or under other operations.  Twenty three of the 48 rigs in operation are located in waters at depths greater than 500 feet.  Of these 23 rigs, 22 of them are located in deepwater of 1,000 feet or greater.  The President’s actions will undoubtedly lead to the shutting down of all deepwater drilling activities and nearly half of the exploration operations in the Gulf.  This Administration forgets that any action to stifle developments in the Gulf of Mexico could negatively affect almost 32,000 American jobs.  It has been estimated that as many as 6,000 to 8,000 offshore workers could be laid off in response to the moratorium put in place by the President.

Former president of Shell Oil and founder of Citizens for Affordable Energy, John Hofmeister noted that the President is most certainly overreacting.  He notes that shutting down operations in the Gulf before investigators can determine what led to the sinking of the rig that caused the spill is “akin to shutting down the airlines because there’s an anomalous aircraft accident.”  In the early stages of Washington’s response to the BP spill, Senator Mary Landrieu (D-LA) defended offshore drilling by comparing this disaster to the Challenger space shuttle explosion.  The Louisiana Senator stated, “What we did not do is end the space program. We did not stop launching. We did not stop exploring. We have to find a way to make sure it never happens again.”

Independent producers operating in the Gulf of Mexico will in no doubt cease operational activity.  What the President and bureaucrats in Washington fail to realize is that oil and gas operations in the Gulf of Mexico do not solely consist of exploration and production companies.  A large majority of those employed in the region consists of all the support activity from catering to transportation to mud, pipe and all other suppliers.

In 2008, candidate Obama made it clear that when he became President, he intended to keep in place the moratorium that prevents oil companies from drilling off U.S. coasts.  Instead of addressing the isolated and rare incident directly, this administration is using this catastrophe to push their political agenda.  The situation with the tragic BP spill is challenging to say the least.  However, taking measures to indefinitely shut down operations in the Gulf of Mexico is not only backward thinking, but will lead to a catastrophic rippling effect across our entire economy.  In a time of 10% unemployment and rising energy prices, the President should be wary to take such reactionary measures.