The nesting grounds of the Louisiana brown pelican are under siege from oil spurting out of the hole in the Gulf of Mexico created by the explosion at BP’s Deepwater Horizon drilling rig. The pelican is perhaps the number one symbol of the damage caused by the human recklessness that apparently caused this “accident.” Running a close second, though, are the people of Louisiana, who have already lost jobs both from the oil that is fouling the waters of the Gulf of Mexico and heading inland and from the Obama administration’s decision, made against the advice of experts, to impose a 180-day moratorium on offshore drilling.
A federal judge issued a preliminary injunction to halt enforcement of the moratorium, citing the negative economic impact and inadequate evidence provided by the Interior Department in a 22-page opinion. But while the White House lost the first round in the battle to stop the moratorium in its tracks, Press Secretary Robert Gibbs promised an immediate appeal and other legal actions. On top of that, the administration has proposed a new cap and tax scheme that will drive up the price of energy and drive away even more jobs, decimating state and local tax revenues and housing values and forcing long-time residents out of their homes, even out of the state.
During a recent visit to Louisiana to chronicle the plight of the pelicans, CFACT interviewed three key Louisiana business leaders – Don Briggs, president of the Louisiana Oil and Gas Association (LOGA), which represents independent operators; Dan Juneau, president of the Louisiana Association of Business & Industry (LABI), and Dan Borne’, president of the Louisiana Chemical Association (LCA). All three indicated that Louisiana is now engaged in a battle for its economic viability, even its very identity. The common message was that the unintentional damage from the oil blowout, caused by reckless corporate officials, may be dwarfed by the intentional damage done by reckless federal officials who are almost gleefully using this crisis as an opportunity to push an unpopular agenda down people’s throats.
Briggs, who had just learned of another major layoff of oil and gas workers thanks to President Obama’s ill-conceived drilling moratorium, worried that the jobs being lost today will be gone forever. These drilling rigs cost half a million dollars a day to operate and many more millions to move to another location – but once they are moved, it could be years before they can be returned to the Gulf for new drilling. Briggs had to cut our interview short to testify before the state legislature against brand-new bills filed, he said, by piranha-like trial lawyers. “People are scared,” and with good reason, Briggs lamented. All of the key players in the Obama administration are anti-fossil fuel people who do not like the oil and gas industry and who are using the BP disaster to hurt the industry and do great harm to the people of Louisiana.
Juneau came out firing, first at bureaucrats who work for BP and for the U.S. government. In his view, we have created a corporate and government bureaucratic culture in which finger pointing and buck passing are the norm, and nobody will exercise the authority to take the necessary actions when a crisis occurs. President Obama, by imposing the drilling moratorium, has added a political risk factor to doing business in the United States that heretofore had been reserved for rogue states like Iran and Venezuela. This is extremely dangerous for future investment.
Juneau also challenged the suggestion by the administration that BP will be liable for lost wages, tax revenues, and dramatically higher energy prices that will surely result from these political actions, and wondered why the people of Louisiana have become pawns in a deadly political game. He also noted that algae blooms resulting from agricultural runoff from corn-growing states (that now produce ethanol) create a dead zone in the Gulf of Mexico each year that is bigger than the one created by the BP disaster, yet nobody has ever suggested a moratorium on growing corn.
Borne’, who lost a former student in the BP explosion, explained that a third of domestic oil production, and a sizable percentage of U.S. natural gas, comes from offshore wells in the Gulf of Mexico. Putting a halt to new drilling will exacerbate this nation’s dependence on foreign oil while costing 30,000 jobs in the oil industry alone, as many jobs as Louisiana lost in a year’s time thanks to the recession. Combined with the loss of fishing and tourism jobs, and the impact on state and local revenues that will surely result in layoffs, Louisiana will take a huge hit for being the victim of incompetency and mismanagement by both BP and the federal government. Meanwhile, as America’s oilfield workers sit idly by, Cuba, China and Brazil are drilling for oil in deep water, the Cubans closer to the Florida coast than the Deepwater Horizon lies from the Louisiana coast.
Borne’ further stated that the power of chemistry is vital to the unlocking of the potential of alternative fuels, adding that any road to a post-carbon future will surely travel down the hydrocarbon highway. The U.S. lacks capacity to produce sufficient alternative energy to replace what we now get from carbon-based sources (about 85%), and taxing carbon to raise the price of hydrocarbon fuels will cripple the nation’s ability to conduct the research needed to bring down the real price of renewables.
Everywhere we went in Louisiana, we saw people angry and ready to fight for their future. Just about everybody recognized that BP was such a bad actor that they caused the only significant oil rig disaster in the history of U.S. offshore drilling in the Gulf of Mexico – 30,000 wells over 40 years, including many deepwater wells. Nearly everybody also saw the drilling moratorium as an even greater threat to Louisiana’s people than the spill itself. Just about everyone agreed that the federal response had been at best pathetic, at worst diabolic.
I highly recommend a series of home-made videos that LOGA has posted on its website. One resident of Vermillion Parish summed up the general consensus: “What do I think about this moratorium? Y’all are going to kill Louisiana and I think our government needs to wake up, Obama needs to wake up, and Louisiana needs to stand up and start shutting the valves down to the rest of the country that supports this type of moratorium.”
Duggan Flanakin is CFACT’s Director of Policy Research.