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Obama WH knew drilling moratorium would cost 23,000 jobs August 25, 2010

Posted by seeineye in : Politics , trackback

by Ed Morrissey

Remember in December when the White House said it would make a “hard pivot” from health care to jobs?  That “hard pivot” didn’t materialize until months later, and in a completely different form than one might have assumed.  The Wall Street Journal reports that the Obama administration’s moratorium on drilling in the Gulf cost Americans 23,000 jobs — and that Barack Obama knew it when he ordered it:

Senior Obama administration officials concluded the federal moratorium on deepwater oil drilling would cost roughly 23,000 jobs, but went ahead with the ban because they didn’t trust the industry’s safety equipment and the government’s own inspection process, according to previously undisclosed documents.

Critics of the moratorium, including Gulf Coast political figures and oil-industry leaders, have said it is crippling the region’s economy, and some have called on the administration to make public its economic analysis. A federal judge who in June threw out an earlier six-month moratorium faulted the administration for playing down the economic effects. …

They show the new top regulator or offshore oil exploration, Michael Bromwich, told Interior Secretary Ken Salazar that a six-month deepwater-drilling halt would result in “lost direct employment” affecting approximately 9,450 workers and “lost jobs from indirect and induced effects” affecting about 13,797 more. The July 10 memo cited an analysis by Mr. Bromwich’s agency that assumed direct employment on affected rigs would “resume normally once the rigs resume operations.”

This may have been a necessary tradeoff if the moratorium was really the needed solution.  However, even the President’s own task force on the Gulf crisis didn’t believe it to be necessary.  They publicly rebuked the White House for misleading the public by linking the ban to their analysis of the disaster, which never contemplated a blanket moratorium.

In the end, the moratorium replaced action by the administration to address the critical failings in its own regulatory regime:

In another document, William Hauser, chief of the regulations and standards branch of what was formerly called the Minerals Management Service, outlined the risks of various drilling activities in an email to colleagues and then wrote: “The more I write this stuff the more I believe we can/should/could regulate/stop activities through a prudent management process versus a moratoria scheme.”

He added, “I guess the moratoria approach is necessary because the MMS cannot be trusted to regulate.” Mr. Hauser couldn’t be reached for comment Friday.

Rather than fix their own problems (which, to be fair, predated this administration as well as continued under Obama and Salazar), Obama and his team instead imposed the ban, killing thousands of jobs and setting back the economy of the Gulf by years — literally.  The capital equipment needed to produce oil in the Gulf has begun to disperse to foreign waters, thanks to the government’s refusal to allow continued drilling by companies that had nothing to do with Deepwater Horizon.  Any new drilling will take years to restart if those rigs float away to other resources, and the capital investment that created today’s rigs may not be as easy to acquire in the wake of the arbitrary nature of Obama’s actions.

That’s one of the reasons why we’re already having trouble producing jobs.  This is just a microcosm of Obamanomics.


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