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Why the Drilling Moratorium Makes Sense June 9, 2010

Posted by Jamie Friedland in Congress, Media, Offshore Drilling, Politics.
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-Fact: We do not yet know what caused the blowout that sank the Deepwater Horizon rig.

-Fact: We do not have adequate prevention or containment methods for a deepwater blowout, so a massive oil spill is guaranteed if a blowout occurs.

-Fact: A massive oil spill is unacceptably destructive.

-Conclusion: Deepwater drilling must be halted AT LEAST until we know how to prevent and/or recover from deepwater blowouts.

We have instituted a 6-month moratorium on deepwater drilling in this country.  Makes sense, right?  Well politics take no heed of logic, and this drilling moratorium has plenty of critics, many of whom live right on the Gulf Coast:

“…the administration’s deepwater moratorium is a major mistake. Simply put, it will cost us more jobs and economic devastation than the oil spill itself.” -Sen. David Vitter (R-LA).

No, David, it won’t (read on for proof).

Texas-based Anadarko Petroleum Corp., one of the world’s largest independent oil exploration and production companies, announced that it is closing 3 of its exploratory wells in the Gulf and moving the rigs to drill elsewhere.  Other companies are following suit.  And that is strengthening the moratorium critics.

You read that correctly: Oil companies are successfully creating political leverage against the moratorium on the oil industry.  And their political contributions are paying off.

Oil state politicians are attempting rhetorical acrobatics as they decry the oil spill and renounce the drilling moratorium in the same breath.  I would say they were walking a fine line if such a line existed, but one cannot rationally rail against and advocate for the same industry simultaneously.

That being said, here are their arguments:

“Shutting down the outer continental shelf, all that’s going to do is raise energy prices and cost American jobs,” Rep. Joe Barton* (R-TX).

*Barton is quite possibly the most scientifically challenged member of our legislature now that Ted “Internet = A Series of Tubes” Stevens has…“retired.”

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.”  Gov. Bobby Jindal (R-LA).

In my opinion, the LAST thing we need would be to go through this ordeal again.  Or potentially even at a second site concurrently before we cap this first one.  But that’s a risk Bobby is willing to take.

Some even argue that we need the drilling jobs now more than ever because the fishing industry is dead.  To them, I would say that the enemy of your enemy may be your friend, but the problem of your problem is not your solution.

Now, the first argument, oil prices/energy security, is just false.  As I’ve previously explained in more detail, U.S. offshore oil reserves are so insignificant compared to world oil production that we cannot affect supply-side prices (which are determined on the global market) by more than a few cents if even that.

An energy consultant estimated that the moratorium could reduce domestic oil production by 80,000 barrels per day in 2011.  That may sound like a lot on its own, but not when compared to the 19,498,000 barrels of oil we consume everyday.  Bear in mind, this moratorium applies to deepwater drilling only.  We are talking about up to 33 deepwater rigs leaving from among the approximately 4,500 total rigs currently in the Gulf.  This argument does not hold any oily water.

So what about the second argument – jobs?  Conservatives are gleefully pushing this point on account of our sluggish economy, but they are doing so in a decidedly dishonest manner.

It takes a remarkable amount of self-imposed tunnel vision to view such a massive catastrophe through the single lens of employment.  But if you’re going to do it, you have to include the whole picture.  This moratorium was not imposed out of arbitrary spite.

Yes, offshore drilling creates jobs.  You know else does?  Fishing and tourism.  Offshore drilling has at least temporarily destroyed these sustainable industries in the Gulf region.

Halting deepwater drilling for 6 months may cost 40,000 jobs around the Gulf.  Louisiana will be hardest hit, so let’s take a look there:

The moratorium could cost Louisiana 20,000 jobs if all the deepwater rigs currently off its shores leave.  Ok, but many jobs did deepwater drilling cost the fishing and tourism industries?  There are 13,000 commercially licensed fishermen in Louisiana, not including deck hands and crew.  None of them can work.  Louisiana’s nine coastal parishes supported nearly 15,000 tourism-related jobs.  Do you know anyone planning any trips to coastal Louisiana right now?  I sure don’t.  So that’s well over 28,000 jobs within just Louisiana that are likely gone for at least immediate future because of this oil spill (as promised above, this proves Sen. Vitter is wrong,).

Tourism in the Gulf region is responsible for more $100 billion annually, or roughly 46% of the Gulf economy.  Even more is generated through fishing, both recreational and commercial; the Gulf of Mexico accounts for more than 50% of U.S. recreational fishing and 40% of the seafood harvested in the contiguous U.S. (including 85% of our shrimp and 60% of our oysters – but most of the seafood we eat is imported).


Unlike temporary, one-time oil revenues, the billions generated by fishing and tourism can be relied upon to sustainably support families along the Gulf year after year after year.  But not if the beaches are covered in oil, and not if the fisheries are poisoned or destroyed altogether.  Thanks to offshore drilling, all the jobs that generated all that money are threatened.

The oil industry is fond of touting the one-time benefits of its extractive drilling while completely ignoring the recurring, sustainable benefits of the industries jeopardized by drilling.  In 2007, President Bush decided to reopen Alaska’s Bristol Bay to offshore drilling (it was protected in the aftermath of the Exxon Valdez spill).  Industry spokespeople and their congressional allies explained that opening the bay offered compelling arguments both financially and for energy security.

I have previously explained how offshore drilling helps only oil companies, not America, and does not improve our energy security.  So let’s look at the financial argument: opening the Bay offered an estimated $8 billion in oil – over the next 20 to 40 years.  Meanwhile, sustainable fishing in that area brings in $2.2 billion ANNUALLY.  In just 4 years, fishing in Bristol Bay generates more money than decades of drilling there would.  And as BP is vividly demonstrating, that fishing is threatened by offshore drilling.  (Obama restored protection to Bristol Bay as part of his offshore drilling plan in April.)

Why would we trade sustainable revenue for one-time drilling that threatens that sustainable future?  Because it enriches oil companies that spend millions on lobbying.

By now you have probably heard some of the metaphors conservatives are using to [mis]characterize the moratorium:

Halting air travel because of one plane crash. –Sen. Vitter (R-LA).

Halting car production because of a 100-car pile up. –Lee Hunt, President of the International Association of Drilling Contractors.

You get the idea.

I’ll respond to ridiculous analogies with a ridiculous hypothetical: During World War II, the U.S. economy was as close to full employment as is likely possible.  We set historic lows for unemployment (~1% in 1944) that we will probably never reach again.  Was ending WWII wrong?  It caused unemployment to rise.  It cost millions of people their jobs as soldiers and workers in war-related industries.  Should we start World War III now?  It would solve our persistent unemployment problem (in more ways than one).  This argument makes sense if all you care about is employment.

Even ignoring the environmental devastation, the jobs argument for offshore drilling is not compelling if you consider even the broader jobs situation.  In some situations, there are other valid considerations beyond local job loss in one sector.  This is one them.

Besides, if we pass a climate bill, we’re going to need a lot of people to help build wind turbines and install solar panels.  Many of those wind turbines will likely go offshore…job training programs would be an appropriate component of either a Gulf recovery package or the climate bill.

In lieu of that, I hear there’s a big clean-up project ramping up in that area.

My research for this post was disheartening.  If you want to know what subtle media bias looks like, read this poor excuse for journalism courtesy of Fox News’ more reputable cousin, the Wall Street Journal.  This article presents startlingly narrow, one-sided coverage of the topic at hand, but most readers will never even know it.  Rupert Murdoch’s media outlets do an unfortunately effective job of dressing up spin to look like news.

To be clear, I do not object to anyone’s right to make this argument.  Or even to present only half of it as they have done.  But to allow such slanted coverage to be considered “fair and balanced” and to parade under the guise of objective journalism is nothing short of intolerable.

Full list of oil spill questions/answers here.

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Comments»

1. Bryan Lieb - June 10, 2010

Great article, I will be linking to it.

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[…] I explained in my earlier defense of the moratorium, the logic for temporarily suspending deepwater drilling operations is very […]

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[…] oil industry has also cited a bogus job-loss argument that I refuted in my original defense of such a drilling moratorium.  Yes, temporarily halting drilling does […]

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[…] drilling now.  Conservatives and the oil industry railed against the Obama administration for its perfectly justified temporary moratorium on deepwater drilling.  They insisted that this most minimal safeguard […]


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