Monday, June 21, 2010

A Preventable Disaster

As everyone in the country now probably knows, the oil spill caused by the Deep Water Horizon explosion is the greatest man made environmental disaster in US history. The environmental impact of this spill sent almost instantaneous ripples through many gulf coast industries affecting thousands of workers whose livelihoods are directly linked to the waters and marshes off of the coast of Louisiana, Alabama, Mississippi and Florida. In the current shaky economic climate, this region, which has already been pummeled with many natural disasters in the last decade, is suffering yet another economic blow due to the destruction of the marine habitats on which many residents make their living. While these tragedies alone are enough to cripple the workers in the gulf coast region, the Obama administration has dealt yet another devastating blow in the form of the six month deep water drilling moratorium.

After the oil spill, the Obama administration charged the Secretary of the Interior with producing a safety report on deep water drilling. The report, which has 22 new safety measures, was then presented to fifteen engineers , seven of who were recommended by the National Academy of Engineering, for peer review and approval. The engineers reviewed and signed the report. Then on May 28th the Department of the Interior, as part of the report, issued the six month deep water drilling moratorium, which ordered that all deep water drilling cease and notified all lessees and operators that no new permits would be issued for the next six months.(1) Eight engineers on the peer review panel then came out saying that the six month moratorium was not in the safety report which they had signed off on:

“[T]he experts say they never agreed to the administration’s six-month moratorium on exploratory drilling on the outer continental shelf…” A group of technical experts who advised the Obama administration on how to bolster the safety of offshore drilling operations say they oppose the administration’s moratorium on deepwater drilling. Halting the work risks “harming thousand of workers” who “were and are active responsibly and are providing a product the nation demands,” they said. The eight experts – all longtime petroleum engineers, some affiliated with major universities – are listed in a report published by the Interior Department last month as having “peer reviewed” Interior Secretary Ken Salazar’s recommendations on improving the safety of drilling on the outer continental shelf in the wake of the April 20 oil rig explosion in the Gulf of Mexico. The experts said the language about the moratorium did not appear in the draft they had reviewed. (Wall Street Journal, 6.9.10)(2)

So the moratorium itself was not in the draft, and yet was presented as peer reviewed and approved by petroleum engineers as to lend credibility to the ban. Benton Baugh ,who was on the panel, stated that not only were they not aware of the changes but they didn’t approve of the idea at all. In a letter sent to Baugh on June 3, the U.S. Deputy Secretary of the Interior said, "We did not mean to imply that you also agreed with the decision to impose a moratorium on all new deepwater drilling. We acknowledge that you were not asked to review or comment on the proposed moratorium."(3)

Now the economic impact of the moratorium is starting to become apparent, and although the full financial scope is hard to calculate due to vastness of the oil industry, the preliminary numbers are mind blowing. The oil and gas industry is Louisiana's biggest economic engine and accounts for about 16 percent of the state's gross domestic product, vastly overshadowing fishing (1 percent) and tourism (4 percent), according to the Tulane University Energy Institute.(4) Initial estimates are between tens of thousands to hundreds of thousands of lost jobs in the entire region and with one dormant well costing upwards of $750,000 to $1 million of lost income a day, yet another gulf coast industry seems poised for absolute devastation. Companies who can not afford to take such losses, and should not be expected to for that matter, have already begun to move operations out of the gulf to places like Brazil and China, where local laws demand that employees on the rigs come from local countries. Simply put, the jobs will not be going with the rigs.

Unlike the hurricanes and the oil spill, which have ravaged this region, this economic disaster was directly caused by the Obama administration and could be stopped at any time. Instead, the administration has done everything to prolong and uphold the ban, even to the point of trying to delay the ruling on a lawsuit filed to stop the moratorium. Although a judge stated that he will rule on rather or not to impose an injunction on the moratorium by June 23rd, the Obama administration has urged that a ruling not be presented until late July.

This is simply a preventable disaster. If BP could have stopped the leak with the wave of a pen, then they would have. If the numerous hurricanes that have consistently pounded the Gulf Coast could have just disappeared over water with the retraction of a bad federal mandate, then it would have been done. So, why does Obama and his political allies continue to let this moratorium compound an already bleak economic situation in the Gulf Coast? That’s what one must ask themselves.

Calvin Parker



  1. Very good article.

    Let's face it. The Gulf States and the rig-workers that are unemployed right now have always depended upon the success of private oil companies. Yes, those same private oil companies that Obama has spent years trying to destroy so he could rebuild them as a nationalized industry. Needless to say, the people he is hurting with this moratorium are not Obama's biggest fans, so I really just don't think he cares, despite those PR pics we see in the papers of him on the beaches rolling oil between his fingers with a worried, contemplative look.

    The tourism, fishing, and oil industries of the Gulf states are suffering severely, but it doesn't seem that he's doing anything to help. His indifference almost reminds me of Marie Antoinette's response to the suffering of her subjects that she despised. As if Obama is saying, "Oyster fishermen out of work? Rig hands not getting paid? Red (Republican) states losing money? Let them eat snow cones."

    I think this moratorium will kill Obama's presidency, or will be the straw that finally breaks the camel's back for his public support, however you want to look at it.

    By the way, a federal judge has heard the complaints of oil companies, and will have a ruling tomorrow about ending the moratorium.


  2. Federal judge in LA lifted the deepwater drilling ban today.

    Excerpt: “The court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium,” Feldman said in his 22-page decision. “The blanket moratorium, with no parameters, seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger.”

    For those keeping score:

    Logic and sensibility: 1
    Obama Administration: 1,214