OFFSHORE DRILLING MORATORIUM AFFECTS EVERYONE
July 23, 2010
President Obama's offshore drilling moratorium will cost the Gulf Coast region jobs, money and economic development. In fact, the moratorium could be more costly than the oil spill itself, says Joseph R. Mason, Louisiana State University endowed chair of banking and renowned economist.
In the first six months, the moratorium will cost the Gulf Coast approximately $2.1 billion in economic losses, including the loss of about 8,000 jobs and $500 million in lost wages, says Mason.
What effect will the moratorium have on the United States, both directly and indirectly? According to Mason:
- Some 12,046 full-time jobs will be lost nationwide, not only on oil rigs, but also in associated industries.
- Texas will see a decrease of approximately 2,492 jobs, and Louisiana will see a decrease of approximately 4,719 jobs.
The moratorium will also cause a loss in wages and tax revenue:
- Analysts are predicting loss of wages from $65 million to $135 million per month, negatively affecting an already distressed work force.
- State and local tax revenues in Texas will decrease by $22.8 million, Alabama's will decrease by $7.2 million, Mississippi's will decrease by $8.4 million, and Louisiana's will decrease by $59.3 million.
The report also warns against a permanent moratorium on offshore drilling in the Gulf of Mexico. As a ''worst-case scenario,'' it would cost more than 400,000 jobs and $95 billion nationwide.
Source: Rebecca Torrellas, ''Offshore drilling moratorium affects everyone,'' E & P Magazine, July 19, 2010.
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