The Obama administration has decided to put a moratorium on all oil and gas drilling activities from floating platforms in the Gulf of Mexico, Alaska and Louisiana until the Presidential commission has completed its review of the BP incident. Wells that have already been started have also been ordered to stop when it is safe to do so and secure the wells. In response to this decision, the National Ocean Industries Association has issued the following statement:
It is still too early to accurately predict the full effect of this terrible accident on the Gulf of Mexico, but tough lessons are being taught and tough lessons will be learned by everyone. Industry will take these hard learned lessons and use them to make exploration and development of offshore energy safer and cleaner.
The worst end result of these tough lessons, however, would be that the US becomes more dependent on foreign oil. Today’s announcement by the White House seems to push us in that direction.
Lease sales occur long before actual exploration and possible production. In the interval, exploration plans must go through a review and approval process.
Cancelling lease sales now without having the full benefit of what actually caused the accident in the Gulf of Mexico may be premature. In addition, limiting opportunities for domestic production will lead to other countries filling our energy void, making America more dependent on foreign oil being transported by foreign tankers. US jobs and revenue for our state and Federal governments will also be lost.
The offshore industry is responsible for nearly 200,000 jobs in the Gulf of Mexico alone, and provides 30% of our nation’s domestic oil production and 11% of our domestic gas production. Offshore oil and gas production accounts for an average US$ 13 billion a year in non-tax revenues to states and the Federal government and has made over US$ 24 billion available to the Land and Water Conservation Fund over the last 28 years. At a time when the spill is already causing economic stress in the region, we must be careful not to make things worse.
The need to act in the face of the ongoing crisis in the Gulf of Mexico is understandable, but we should ensure our actions today don’t lead to greater problems for the nation down the road.