The Outer Continental Shelf in the Gulf of Mexico contains abundant oil and natural gas resources that Americans use every day to fuel their cars, heat and cool their homes, and cook their food. Oil and natural gas are also essential components of a multitude of goods – from fertilizer to plastic to clothes to artificial heart valves and tens of thousands of products in between. Simply put, oil and natural gas continue to fuel our economy.
The Gulf of Mexico accounts for approximately 30 percent of U.S. oil production and 11 percent of natural gas production – much of this from deepwater development. When the federal government instituted the deepwater drilling moratorium in June 2010, drilling for these resources came to a halt. Even after the Administration announced it was lifting the Moratorium, permitting for offshore operations remains at a virtual standstill. With the Gulf essentially offline until an undetermined point, projections for future development declined drastically.
When supplies are tight, prices will rise – and go up they have. As the global economy recovers from the recession, demand has risen sharply and is projected to rise steadily for the foreseeable future. Oil has risen above $100 a barrel and is expected to remain there for a long-time ahead.
Even more devastating has been the Gulf shutdown has on workers and local communities. In the Gulf region and well-beyond, tens of thousands of jobs and billions in revenue may be lost.
However, a return to previous permitting levels has the potential to unlock hundreds of thousands of jobs and billions in revenue for the Gulf and for the entire country. In a July 2011 report, IHS CERA and IHS Global Insight estimated that over 230,000 American jobs and nearly $12 billion in tax revenues could be generated in 2012 if activity in the Gulf resumed to normal levels. These jobs were not just in the Gulf region; one-third of the potential jobs would be generated in states such as California, Illinois, Pennsylvania, and Georgia.
From Louisiana to Maine to Oregon, the Gulf of Mexico wields a significant influence in the lives of everyday consumers and workers. Ensuring access to develop the Gulf’s resources is essential to protecting the livelihoods of millions of Americans.