06.24.2010 0

Secretary Salazar Should Be Asked About Job Loss Projections Before Filing Appeal

By Kevin Mooney — With Interior Secretary Ken Salazar working to renew the administration’s push for a six month moratorium on deep water oil and gas drilling, media organizations now have the opportunity to balance out their coverage by reporting on  job loss projections for the gulf region.

Earlier this week, a federal judge in New Orleans sided with industry groups and ruled against Obama’s order. As the administration prepares to appeal this ruling, the NYT should ask Salazar and other key figures to rationalize their actions with hard economic realities described in the court ruling.

The Louisiana Mid-Continent Oil and Gas Association and other trade associations have offered up some important pieces of information that cannot be so blithely dismissed and are worthy of coverage.

The facts as they are presented by LMOGA shows that there is considerable weight standing behind the 22 page ruling from Judge Martin Feldman who is with the U.S. District Court in Louisiana. The burden is on Salazar not business interests that appear to have their facts in order. He should be asked about the job loss projections before the appeal is filed.

Unfortunately, the press continues to give him a free pass. The most recent report in NYT about the deepwater horizon explosion and the BP oil spill uncritically repeats Salazar’s accusation that the ruling was unjustified.

“In Washington, Interior Secretary Ken Salazar  said Wednesday that he was preparing new evidence to support a six-month moratorium on deep-water oil and gas drilling in the Gulf of Mexico and was prepared to vigorously challenge a federal judge’s ruling on Tuesday that the drilling ban was unjustified,” the report says. Appearing before a Senate committee, Mr. Salazar said the “pause” in the drilling of 33 deepwater wells in the gulf was essential until the causes of the April 20 BP Deepwater Horizon explosion and oil leak were fully understood.”

Going forward, The Times should report the following:

* Gulf production represents 27% of the US oil and 15% of US natural gas production.

* Deepwater production represents more than 70% of total Gulf of Mexico production, so the moratorium will ultimately make us more dependent on foreign sources which don’t share our environmental standards. The oil will arrive via pipelines or on tankers, which are also at risk for spills. America will lose tens of thousands of jobs.

* The offshore drilling industry is responsible for 200,000 jobs in the Gulf region.

* The moratorium could cost 3,000 to 6,000 Louisiana jobs in the next two to three weeks alone, and potentially 10,000 in the coming months. To put that in context, the entire U.S. economy created only 41,000 new private jobs in May, according to the Louisiana Department of Economic Development.

* For each of the 33 Louisiana platforms idled by the work stoppage, up to 1,400 jobs and potentially $330 million in lost wages per month are at risk.

* The moratorium will cost the federal government approximately $120 to $150 million in lost royalty payments in 2011, and $300 to $500 million in lost corporate taxes, according to Consultants Wood Mackenzie.

* Since 1947, oil companies have drilled more than 42,000 wells in the Gulf. Current production is about 1.6 million barrels a day, and four-fifths of that is from deep water. Yet in a typical year, spills equal only several hundred barrels, according to the American Petroleum Institute.

* Nearly 60% of today’s 7,300 active Gulf leases are in deep water, including the 20 highest-producing leases in the Gulf.

* According to the International Energy Agency (IEA), a moratorium in the Gulf puts 300,000 barrels a day at risk.  That’s 300,000 barrels a day that will now need to be imported from foreign sources, sending revenue and jobs overseas and raising its own safety issues.

Various public officials from outside of the administration could also help to bring balance to coverage that has been overly sympathetic toward a moratorium that many see has economically unsound and environmentally unjustified.

* Charlotte Randolph, LaRouche Parish President: “Mr. President, you were looking for someone’s butt to kick. You’re kicking ours,” in pleading for the moratorium to end.

* Sen. Mary Landrieu (D-LA): “Every one of these deepwater wells employs directly hundreds of people and indirectly thousands.  This is one company. This is one well. It’s a terrible situation and no one is making light of it, but what I’m saying, as strongly as I can, to this president is the economic analysis is devastating to many companies, thousands of companies… And we’d better be very careful before we drive every one of these deepwater wells to Africa or India.”

* Louisiana Gov. Bobby Jindal (R): ”During one of the most challenging economic periods in decades, the last thing we need is to enact public policies that will certainly destroy thousands of existing jobs while preventing the creation of thousands more. The Louisiana Department of Economic Development estimates that the active drilling suspension alone will result in a loss of 3,000 to 6,000 Louisiana jobs in the next 2-3 weeks and potentially over 10,000 Louisiana jobs within a few months.””

* Mississippi Gov. Haley Barbour (R): “”I don’t think we should have a moratorium; it is very reasonable to continue to drill. If we don’t, then all this oil drilling equipment is going to leave the Gulf of Mexico. It is going to go to West Africa, Brazil, to Australia, to China and it is not going to be back in six months when the moratorium is over. It is going to be gone.”

* Frank Corder, City Councilman, Pascagoula, MS: “”Many of our citizens on the Coast work on oil rigs in the Gulf and local businesses support, repair, and construct these rigs. To allow this unfortunate accidental disaster to shape our nation’s future energy policy in terms of offshore drilling and thus essentially taking the food off the tables of so many in our city, county and state would be an additional tragedy. Further, since when do we as Americans propagate a defeatist attitude. We are the country of innovation and invention. We should learn from this disaster, yes, but it should not be used as a political football to promote a liberal energy policy that ultimately makes us more dependent on foreign oil.”

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