Live From the Gulf: How Much Will President Obama’s Drilling Moratorium Cost? (VIDEO)
Brandon Stewart /
The team Heritage sent to the Gulf has been reporting on what they found during their tour of the Gulf states. Last Thursday, one member of the delegation, Distinguished Fellow Ernest Istook, interviewed Loren Scott, professor emeritus at Louisiana State University on President Obama’s oil drilling moratorium.
Professor Scott has garnered some attention recently for his research in to the economic cost of the President’s blanket ban. His projections were featured prominently in a Christian Science Monitor story about the ban:
But how much could the moratorium really affect local economies if reinstated? A lot, say analysts.
Although wells already producing oil are not affected by the moratorium, 33 rigs in the process of exploratory deep-water drilling are now sitting idle. They employ some 8,000 people. With average weekly oil-rig wages of $1,804, the potential for lost income is about $57.7 million per month.
That’s just the direct impact, says Loren Scott, a professor emeritus at Louisiana State University who also owns a financial consulting firm.
“At a minimum, 32,000 jobs could be lost,” he said, taking into account layoffs at industries supported by the rigs’ employees like movie theaters and restaurants.
That figure is a conservative estimate, adds Professor Scott, since it’s based on his research of Louisiana’s onshore drills. Offshore platforms cost tens of millions more a year to maintain, meaning that more funds going towards support industries would be lost.