Drilling ban job losses not as bad as feared? Not so fast, analyst says

When the Obama administration said the deep-water drilling ban was temporarily killing about 8,000 to 12,000 Gulf Coast jobs, it seemed like the worst fears about the possible economic damage from the moratorium weren’t coming true.

Not so fast, says a Louisiana State University professor who has been studying the economic effects of the ban since it went into effect in late May. After scrutinizing the Commerce Department’s report, finance professor Joseph Mason says the Obama administration lowballed the total job losses tied to the deep-water drilling ban.

Where the number crunchers at the Commerce Department estimated an immediate $1.8 billion cut in spending by drilling operators, Mason says economic output will be slashed by at least twice as much, or $5 billion. And at least a third more jobs hang in the balance, Mason says, adding that the government’s own numbers show the ban could claim 19,536 jobs in the region.

Mason’s assessment, released today during a news conference with the American Energy Alliance, focuses on what the professor says was a major failing of the Commerce Department’s analysis: an apparent decision to trim the initial estimated job losses by 40 to 60 percent.

Mason says the administration softened its initial estimates of a $1.95 billion cut in total operating expenditures by the industry, partly by subtracting the $141 million that could be paid out by the Rig Worker Assistance Fund to displaced employees.

At an estimated rate of $92,136 in spending per job — the government’s adopted number — that should translate to an estimated 19,536 jobs. But inexplicably, Mason says, the Commerce Department analysts then cut that forecast by a factor of 40 to 60 percent to arrive at its finding that just 8,000 to 12,000 were at risk.

“The heart of this critique is that the administration cut its estimates by a seemingly ad hoc 40 to 60 percent,” Mason said in a statement. “The justifications given in its report are not supported by U.S. Bureau of Economics documentation. Without that methodologically unjustified cut, the Gulf starts with almost 20,000 jobs lost.”

Mason’s findings respond to concerns raised by Gulf Coast lawmakers and industry advocates who were skeptical of the Commerce Department study.

23 Comments

  1. JimH

    What? They lied to us again? Duh! It’s all lies and BS coming from the Obamination.

    #1
  2. richard

    Since the Louisiana Workforce Commission started asking the question June 13, 486 people have filed new unemployment claims that say the moratorium cost them their jobs. (Times Picayune 8/10/2010)

    http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/08/rig_row_in_pascagoula_is_home.html

    #2
  3. YellowRose

    LOL! The Houston Chronicle’s Headline is saying the opposite of what this article is saying. Go figure!

    #3
  4. Commrade_Leftist

    Typical.

    #4
  5. ec342

    Let’s see… University professor = Liberal. Say’s that Obama’s ban is not bad/no harm = Expected. That he waited long enough to actually witness the eventual economic damage caused by the ban = not even close. It’s mainstream America against the elitists in power. Politics as usual.

    #5
  6. REM

    Well I voted for him, so this cannot be true. To heck with reality, I’m sticking by my poor decision. Obama for World Leader!!

    #6
  7. chiefdecoy

    They are just now figuring this out???
    Talk about slow. We have been cold stacking vessels for the past two months. Glad all these college grads are getting around to noticing the contradictions…..

    #7
  8. docadams

    How do you weigh that against the losses from the spill? Is it 1% or less than one-tenth of one percent?

    #8
  9. hometown_fan

    The Obama administration has only fooled the liberals, the Chronicle and the rest of the mainstream media.

    So the short version is: Obama only fooled the liberals.

    #9
  10. Stevo

    YR,

    As much as I like to point out the obvious mistakes and bias in the Chronicle’s “reporting,” read the headline again. Their headline says the same thing as the article.

    However, there is a whole bunch of secondary, and even tertiary, fallout from the misguided moratorium. I have a friend with a restaurant near Halliburton on the West Belt. Their lunch crowd is no longer enough to support the restaurant, now that so many Halliburton people have been laid off, and the restaurant is in serious financial trouble. Add to that the employees at the restaurant who aren’t working as many hours, and don’t get as many tips, and now their own homes are in jeopardy. How many businesses like these are affected too?

    #10
  11. Jim in Acadiana

    This is a form of federal govt. propaganda similar to the WMD’s in Iraq. government pitches a story with the hope that it it believed. Add to this extensive pencil engineering on the numbers so that the Secretary of Commerce can present a story agreeable with the admonistration’s rhetoric.

    Without question for offshore work, this is and was a job killer on a large scale. It eliminated current jobs and caused a wholesale postponement of many projects in the Gulf. This is easily confirmed at state employment websites.

    As a President who ran on a job creation ticket, he is a dismal failure for not meeting any of his campaign rhetoric on this matter.

    This dishonesty caused the Republicans the Whitehouse just like it probably will the Democrats in the future. Most A,ericams dislike liars!

    #11
  12. haywood

    The government would NEVER lie to the public!! I’m so hurt. Remember this is the obamachron newspaper……

    #12
  13. sam

    ec342, did you even read the article?

    #13
  14. Rick

    Thank goodness the recession is over.

    #14
  15. jim

    Typical reporting by comical.com. They like to see themselves as a newspaper when in reality they are noting but shills who promote our idiot-in-chief and his wacky statistics. After what we’ve seen over the past 20 months, who believes anything that obaaaaaaaaaaama or his administration says. Bunch of liars!

    #15
  16. YellowRose

    Funny how they changed the Headline to NOW reflect the truth.

    #16
  17. Indian paintbrush

    Is this really any surprise?

    #17
  18. jefro

    Just when you thought the moral bar for being a politician couldn’t get any lower. The current administration is re-writing the book front to back. I have never seen a bigger group of liars, cheats, and most of all babies.

    #18
  19. Trail Trash

    Hmmmm, maybe we need to re-visit the governments estimates of the flow rates?

    #19
  20. richard

    This is fact, not estimate,

    Since the Louisiana Workforce Commission started asking the question June 13, 486 people have filed new unemployment claims that say the moratorium cost them their jobs. (Times Picayune 8/10/2010)

    http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/08/rig_row_in_pascagoula_is_home.html

    And technically, it’s a moratorium. Production in the Gulf has not been banned and is ongoing. The leak in the pipeline in Romeoville, Ill. had more effect on the supply of oil than has the moratorium.

    #20
  21. And how many jobs – nay, lives – are put at risk every day by business-as-usual oil drilling and climate pollution? Come on, let’s not miss the forest for the trees. The best kind of assistance we can provide for rig workers is retraining for work in the clean energy sector, the real future of energy. Arguing over the effects of a temporary moratorium on deepwater drilling is nothing more than rearranging deck chairs on the Titanic.

    Get beyond the short-sightedness, people. It’s my generation and the next that have to live with the consequences of our actions today, and we’ve already waited far too long to get moving away from dirty and deadly fossil fuels.

    #21
  22. C.A.Dickerson

    The industry publications have and are reporting just the opposite ilustraited by the fact that only 160 to folks in all of La. who worked on rigs have applied for economic help from a multi million dollar private fund to be dolled out the first part of next month.
    More importantly, they reported that in 2008 the Deepwater Insurance companies got with the rig owners to attempt to get a VOLUNTARY moratorium on drilling after finding out the extent of needed repairs on most all rigs. They reported some rigs being 2 – 3 years behind on their maintenance, which, of course may well have played a role in the incident we are dealing with.
    I think there are voices complaining about matters that are totally unjustified.

    #22
  23. CC

    Tell that to my son who was layed off 2 times.

    #23