The Deepwater Horizon explosion that triggered leakage of millions of gallons of crude into the Gulf waters since April 20 has provided President Obama with a timely excuse for advancing the objectives of rent-seeking environmentalists. Instead of focusing on ways to assist the effort to plug the leak, Mr. Obama is taking advantage of the crisis to turn down the oil spigot on projects that are not leaking. This misguided policy is going to cost thousands of jobs and billions of dollars.
Oil may be dirty, but America runs on oil. Curtailing drilling during a depressed economy is only going to stall hope of any recovery, yet Mr. Obama announced on May 27 a six-month moratorium on new deepwater oil drilling permits. He also ordered a halt to all current deepwater drilling operations in the Gulf and reversed his decision of just two months ago to end a decades-old ban on oil and gas drilling along the coasts of the Atlantic states and northern Alaska.
The moratorium does nothing to mitigate the leak while putting out of business the Gulf's 33 other safe deepwater rigs. Such a blunderbuss approach exacts punishment on failure and success alike. The shutdown is costing rig operators an estimated $8 million to $16 million a day, and support service companies stand to lose an additional $1 million daily. Louisiana Gov. Bobby Jindal said the state will likely lose 20,000 jobs over the next 18 months.
The moratorium is expected to delay the production of 80,000 barrels of crude a day in 2011, a reduction of 4 percent. It is also likely to render seven oil discoveries too expensive to tap and decrease federal tax revenue by $7.6 billion, according to the Louisiana Mid-Continent Oil and Gas Association. Moreover, the loss of domestic oil will force Americans to spend an additional $10 billion overseas to buy imported oil.
While the administration may claim it is exercising an abundance of caution in the wake of the Gulf spill, it is resuming a long-held policy goal of obstructing carbon-based energy. Ken Salazar kicked off his tenure as interior secretary by freezing offshore drilling permits issued by the Bush administration. He also voided several permits for land-based drilling in Utah. Interior officials are quietly pondering a plan to grab 10 million acres stretching from Montana to New Mexico under the 1906 Antiquities Act in a move designed to further restrict drilling activities in the nation's energy-rich West. There's little doubt that the administration will use the Gulf spill to add momentum to the Kerry-Lieberman "cap and trade" bill, which imposes fees on carbon use and would trigger price hikes on many energy products and consumer goods.
Taken as a whole, these acts demonstrate a marked anti-oil bias. While the O Force capitalizes on the Gulf calamity, the majority of hardworking Americans want to see the Gulf cleaned up and America's oil spigot reopened.
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