During a 45-minute conference call with journalists this morning, Jack Gerard shared some startling predictions about the future health of the nation’s oil and natural gas industry if the Obama Administration gets its way in adding more regulation and increasing taxes on offshore drilling in the Gulf of Mexico. The biggest one of all is enough to cause anyone to take pause:
“The administration’s moratorium, if continued indefinitely — or similar legislative proposals which would make the deep water unavailable or uneconomic — would cost this country 175,000 jobs every year between now and 2035, according to our latest analysis,” said Gerard, president of the American Petroleum Institute, a group representing some 400 oil and natural gas companies.
And that’s not all!
“The Gulf of Mexico accounts for 30 percent of our domestic oil production and 13 percent of natural gas,” Gerard explained. “The deepwater areas account for 80 percent of the Gulf’s oil production and 45 percent of its natural gas production. Twenty of the highest-producing leases are in the deep water.”
When one considers that the oil and natural gas industry, according to Gerard, supports 9.2 million workers and 7.5 percent of all U.S. gross domestic product, even a small percent of decline can have a tremendous impact on the economy.
According to an API-produced report released today, the economic impact of a complete shutdown of deepwater drilling would yield some awful results. For instance:
- Reduce direct and indirect employment in the oil & gas and its service industries by 93,000 jobs1 – every year through 2035;
- Reduce an additional 82,000 jobs every year through 2035 in non oil & gas related industries due to less income in the economy;
- Reduce annual GDP by over $20 billion per year or a cumulative impact of approximately $500 billion in the next 25 years;
- Reduce long-term U.S. oil production by 27 percent; and
- Increase long-term U.S. foreign oil imports by 19 percent.
If you agree that now is not the time to increase regulation and taxation of oil and natural gas companies — or anyone for that matter, CONTACT YOUR ELECTED OFFICIALS IN WASHINGTON, D.C., and DEMAND THEY ACT TO OPPOSE END PRESIDENT OBAMA’S MORATORIUM ON OFFSHORE DRILLING!
FYI: I was joined on the call by representatives of nearly 40 major media outlets, including Bloomberg News, Dallas Morning News, Dow Jones Newswire, Hearst Newspapers, Reuters and The Wall Street Journal, just to name a few. If/when a transcript of the conference call becomes available, I’ll post it — or a link to it — as an update to this post.
UPDATE 7/27/10 at 1:37 p.m. Central: Cross-posted at BigGovernment.com.
UPDATE #2 7/27/10 at 4:37 p.m. Central: Jack Gerard just issued a statement about the proposed energy bill introduced this afternoon by Senate Majority Leader Harry Reid (D-Nev.). After calling the provision on oil spill liability a “jobs killer,” Gerard added, “Requiring an unattainable level of insurance coverage for domestic energy producers on the Outer Continental Shelf will force the vast majority of American companies out of U.S. waters….”