Moratorium Causes Significant Harm to Economy, API Looks to Appeals Court

The American Petroleum Institute urged the U.S. Court of Appeals to uphold Judge Feldman’s decision to stay the federal moratorium on deepwater offshore drilling.

“The government took the proper steps to review the safety and operations of all rigs in the Gulf, following the Deepwater Horizon incident, but a blanket moratorium was a step too far,” said Jack Gerard, president and CEO of the American Petroleum Institute. “Freezing access to an important piece of our nation’s energy supply impacts jobs and the economy in the Gulf Coast, which has already suffered from the spill, and threatens the nation’s energy security without raising or improving industry procedures.”

Typically, just one of the deepwater drilling platforms in the Gulf affected by the moratorium supports as many as 1,400 direct and indirect jobs, which means as many as 46,200 jobs could be lost in the short-term because of the moratorium, according to a recent study by the Louisiana Mid-Continent Oil and Gas Association. These jobs pay an average weekly wage of $1,804, with lost wages for those jobs totaling as much as $10 million per month, per platform.

“Decisions that impact the industry’s ability to domestically produce the oil and natural gas this country needs in every sector of our economy and in every household will affect the lives of every American, every day,” said Gerard.

About 30 percent of the nation's oil production and 13 percent of its natural gas production come from the Gulf; about 80 percent of Gulf oil and 45 percent of the natural gas come from deepwater wells. Following the Deepwater Horizon incident, subsequent inspections by federal regulators found no significant violations on the 33 existing deepwater drilling platforms in the Gulf.

API opposes new offshore drilling moratorium

The Interior Department’s new moratorium on deepwater drilling is not necessary for safety and will cost jobs, harm the Gulf region and weaken our nation’s energy security. API’s President and CEO Jack Gerard offered this reaction to the new policy:

“It is unnecessary and shortsighted to shut down a major part of the nation’s energy lifeline while working to enhance offshore safety. The new moratorium threatens enormous harm to the nation and to the Gulf region. It places the jobs of tens of thousands of workers in serious and immediate jeopardy and promises a substantial reduction in domestic energy production. No certain and expeditious path forward has been established for a resumption of drilling.

“The 33 now idle deepwater drilling rigs in the Gulf have passed thorough government inspections and are ready to be put back to work. The industry has been working extremely hard on all fronts to enhance safety – and will continue to do so. And the government has already imposed significant, additional safety requirements that are supported by the industry. A resumption of drilling would proceed only under the most intense and vigilant oversight.

“Eighty percent of the oil and 45 percent of the natural gas produced in the Gulf come from deepwater areas. The 20 most prolific producing blocks in the Gulf are located in deepwater. Deepwater is indispensable to a strong and secure energy future. The moratorium makes that future uncertain.

“We strongly encourage the department to reconsider its decision and establish a process and timeline for putting our deepwater companies and highly skilled employees in the Gulf region back to work.”