Six-Month Deep Water Drilling Moratorium Having Little Adverse Impact On Jobs, Rig Siting


"Tugs slowly move the Noble Frontier Driller into port at Signal International's east shipyard in Pascagoula, Miss., on Saturday. At right is the Transocean Marianas." Image credit:Times Picayune, Rusty Costanza.

Remember all those dire predictions that the Federally imposed, deep-water drilling moratorium (for just 6 months) would crash the economies of Louisiana and Mississippi, for example? Initial data indicate no such thing is happening. As per a well-prepared story in the Times Picayune, the "rig row" in Pascagoula port is currently filling up with rigs being pulled in to port to await the end of the drilling moratorium. Only 2 of 33 "deep-water" rigs operating in the Gulf have left for other nations and the adverse impacts on employment that were supposed to come from the moratorium are really not in evidence yet.

...weekly unemployment claims data in the mining industry sector, which comprises primarily oil- and gas-related jobs, have shown no noticeable spike since the moratorium was declared May 28. Overall employment data in coastal parishes also show little change since the drilling ban.
I've been involved with environmental regulatory affairs most of my work life and this is just so typical. An environmental crisis ensues. A portion of the pendulum effect kicks in as:

  • Government states its intent to scrutinize performance of the crisis-causing industry sector(s) and to further regulate, as appropriate, based on study findings.

  • State and Federal politicians, urged by pro-industry lobbyists, immediately set up howls of complaint that are picked up mainstream media as objective - 'they'll destroy our industry, and take away all our jobs'

  • As government studies get underway, unrelenting pressures by lobbyists are kept on regulating agency Administrators.

  • Technical staff at the regulatory agencies feel strongly obligated to look out for the status quo.

  • Everyone supposes the worst will happen: with small gains for environmental risk management and high losses in jobs and to the local tax base.

  • New regulations are proposed in draft form, including an economic impact analysis.

  • Lobbyists for industry state regarding the draft regs that agencies have wildly underestimated the adverse impacts and overestimated the benefits.

  • A compromise rule is implemented.

  • Years later, it is found that the opposite was what happened: adverse impacts were wildly over-estimated even by the regulatory agencies, for example.

As Ronald Reagan used to say: "There you go again."

And yes, I concur that over-reaction occurs on both sides. See my post on the pendulum effect for added context.

Tags: Gulf Oil Spill | Oil Spill

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