By Jared A. Favole
The Wall Street Journal
September 16, 2010
The Obama administration said Thursday that a six-month moratorium on offshore oil drilling in the Gulf of Mexico has had a limited effect on employment despite concerns the ban would cripple coastal economies.
The number of workers with jobs in the five Louisiana parishes that support most deep-water drilling activities rose in July, two months into the ban. Unemployment-insurance claims in these parishes also declined from April through August, according to an interagency report the Obama administration compiled for Congress.
Most oil employers haven’t laid off highly skilled workers despite the ban and have used the moratorium to do maintenance and repairs on some of their rigs, the report says.
The report notes, however, that based on current data, the ban could result in 2,000 rig workers losing their jobs or leaving the Gulf. That would represent 20% of the rig workers who worked in the Gulf on April 20, the day BP PLC’s Deepwater Horizon drilling rig exploded, triggering one of the worst oil spills in U.S. history.
The report may help ease concerns about the ban, which is scheduled to be lifted at the end of November. It could also raise more concerns, since the report doesn’t include recent unemployment figures and unemployment-insurance claims from states other than Louisiana that were affected by the moratorium.
Louisiana’s U.S. Senators stepped up their criticism of the moratorium despite the report.
During a hearing Thursday of the Senate Small Business Committee, Sens. Mary Landrieu (D., La.) and David Vitter (R, La.) criticized the administration for failing to review the effect of the ban on regional businesses and workers before issuing the first version of the moratorium in May.
The senators also urged the administration to consider the number of jobs that have been lost as a result of a slowdown in issuing permits for shallow-water drilling. The moratorium doesn’t apply to shallow-water drilling, but the Interior Department has approved significantly fewer shallow-water drilling permits in recent weeks, in large part because of new safety standards that require longer reviews of the applications.