In June 2010, the federal government instituted a moratorium on all deepwater drilling and nearly halted shallow-water drilling following the Deepwater Horizon oil spill in the Gulf of Mexico. As the region recovered from the oil spill, it became increasingly obvious another tragedy was unfolding.
At first, we heard stories of laid-off roughnecks and idled service operators. With every rig in the Gulf shutdown, rigs either moved abroad or sat idled, leaving thousands of hard-working Americans without a source of income. As the months passed and the industry was prohibited from resuming operations, the tumult started to spread.
Vendors throughout the country lost orders for equipment. Manufacturers from Illinois, New York, Michigan, Wisconsin, Pennsylvania and even California – areas thousands of miles from the Gulf but clearly dependent on the region – lost orders and were forced to cut back.
When the Administration announced that it was lifting the moratorium, we all felt a sense of relief – until Interior Secretary Salazar also announced that he would continue to deny permits in both the deep water and shallow water while he developed a new regulatory regime. This permit freeze has led to a 250% increase in pending exploration and production plans and an 80% drop in the number of permits issued in the Gulf.
Combined, the Gulf Moratorium and the Permit Freeze have killed 20,000 jobs already and threaten another 380,000 jobs nationwide. Further, drivers nationwide have faced significantly higher prices at the pump as a result of severe declines in the amount of oil produced in the Gulf of Mexico.
The equation is simple enough: supply constraints equal increased prices for consumers. When oil prices go up, the price of gasoline, diesel and jet fuel also increases the cost of any goods or services that rely on transportation fuel to reach their destinations.
Having witnessed the widespread ramifications, CEA launched our Open the Gulf Campaign to capture the stories of those individuals affected, removing all the political banter and economic data and getting to the heart of the matter. We hope you will send a message to President Obama to Open the Gulf and share your story with us.