Is the Deepwater Drilling Moratorium Worse Than the Oil Spill?

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I’ve already asked whether President Obama’s deepwater drilling moratorium is a smart policy, given the fact that it won’t do much unless we attack oil demand at the source. But I still thought that a temporary timeout for certain sorts of deepwater drilling made sense. The Deepwater Horizon accident proved not just that well blowouts can happen when you’re working thousands of feet beneath the surface of the ocean—but that the consequences of a blowout are catastrophic, and that the oil industry, for all its combined expertise, is incapable of quickly fixing one.

But until I came to New Orleans this week and attended the first public meetings of the Presidential oil spill commission I hadn’t realized just how much economic damage a drilling moratorium could do to this oil-dependent region—and how hard the people of Louisiana will fight it. Speaker after speaker at today’s hearings testified to the toll the moratorium—put back into place last night by Interior Secretary Ken Salazar—will take on a state that is already dazed from the ongoing oil spill. And if I was surprised, so were Bob Graham and William Reilly, the chairman of the commission. Both had said in the weeks before the commission began to do its work that they saw the wisdom of a temporary pause on deepwater drilling for safety’s sake. Yet when they spoke to reporters this afternoon, they sounded less convinced. “I come from this with a much clearer sense of the degree of economic dislocation and hardship caused by the moratorium than three or four days ago,” said Reilly, a former Environmental Protection Agency administrator under President George W. Bush.

What changed? Reilly and Graham and the rest of the commission heard from a litany of witnesses who cited the crippling economic effect of even a temporary pause on deepwater drilling. Charlotte Randolph, the president of Lafourche Parish in southern Louisiana, told the panel that 9 out of the top 10 taxpayers in her region were part of the oil and gas industry. She reminded the commission that even a short-term moratorium could lead to oil companies pulling out drilling rigs and moving them elsewhere around the world, and she said that over time it could lead to the loss of 125,000 jobs in Louisiana. It wasn’t just workers on the rigs—it was the companies that supported drilling, the restaurants where rig workers ate. “We are at the epicenter of the drilling suspension,” said Randolph. “The spill has decimated the fishing industry, but the moratorium will end life as we know it in our parish.”

A Louisiana politician who supports the oil and gas industry is about as rare as gumbo in New Orleans. (OK, I’m still working on my bayou analogies.) But even those whose lifestyle had been truly decimated by the spill—fishermen—still asked the commission to curtail the moratorium as soon as possible. David Camardelle, the mayor of Grand Isle in southern Louisiana, spoke of seeing his town—heavily dependent on the tourism industry—all but ruined by the oil spill. The people who bought summer houses in Grand Isle or filled its hotels haven’t come back this year, and the shrimping industry that uses his town as a base might never recover. “Please help us,” Camardelle begged. Yet in the next breath he told the panel: “We need to keep on drilling.”

From the outside that attitude might seem strange—certainly it did to me, at least at first. It was the careless of BP—abetted by a failure of regulation from the government—that directly led to the oil spill that has caused all this misery for southern Louisiana and much of the Gulf coast. If anyone would support a temporary ban to make absolutely sure that another spill of this magnitude never happens again, surely it would be the people who have borne the brunt of this one, right?

But that ignores the economic importance that offshore drilling has for the state of Louisiana. Energy—in all its facets—contributes about $65 billion to Louisiana’s $210 billion economy, compared to about $10 billion for fishing and tourism. It’s horribly unfair but the fact that fishing and tourism is on its knees in southern Louisiana because of the spill only makes those remaining jobs in the oil and gas industry all the more valuable. (It’s a bit like New York City, where Wall Street’s greed may have helped cause the recession—yet the financial industry’s tax revenues were so important to the city that its leaders still fought further regulation.)

There is nothing else, at least not right now. And the state is accustomed to fishing, boating and drilling all happening side by side. Gulf coast residents like to say that their coast is a “working coast,” and you can see it, where oil wells are next to wildife refuges, pelicans perch on offshore platforms and the Shrimp and Petroleum Festival is not an oxymoron.

At the same time, the uncertainty caused by the spill—no one knows when it will end or what the long-term effects will be—has made residents even more nervous about any other changes, desperate for some solid ground. After the hearings I spoke to John Trumbaturi, a social worker in Palquemines Parish in southeastern Louisiana, home to many of the fishing families that have been devastated by the spill. He’s been working with parents and kids in the area and he knows better than most the extreme stress the community is under because of this disaster. But he calls the moratorium a “double-edge sword.” “Parents want to be able to do their work,” he says. “And that’s fishing or offshore working on the rigs.”

Of course there are good environmental and safety reasons to keep the moratorium in place—as Michael Bromwich, the new director of the Bureau of Ocean Energy Management, Regulation and Enforcement (formerly known as the Minerals Management Service) tried to make clear in his testimony the commission today. And the biggest reason is one anyone can see if they check out BP’s underwater camera feeds: the oil industry can’t handle a deepwater well blowout. “They don’t have a fix on what the most effective containment strategies are,” said Bromwich. Oil industry insiders can cite all the statistics they want about the number of wells that have been drilled without incident in the Gulf and they can argue that Deepwater Horizon was solely the fault of BP’s own failures, but the truth is that we can drill deep holes, but we can’t fix them if things go wrong.

But here’s the real problem—if we’re going to make the ability to fix a deepwater blowout a requirement for new drilling to go forward, it’s hard to see how the moratorium could be ended soon. This isn’t just a matter of inspecting the rigs out in the Gulf to make sure everything is in place—this is about deciding what level of risk we’re really ready to accept in offshore drilling, because it’s not clear even the best oil company could handle another blowout. At the hearing Bromwich talked about the possibility of lifting the moratorium earlier than the end of November—yet his own report to Salazar won’t be done before the end of October, leaving little chance o a briefer ban.

Speaking to reporters on Tuesday, Bob Graham said that he saw the commission’s role to “build a fire” under investigators and “look over their shoulders” as they explore what happened on the Deepwater Horizon and what the future of America’s offhshore drilling program should be. And certainly after spending a couple of days in New Orleans, they’ll come away with an enhanced understanding of just how quickly locals want those investigations completed and the rigs back working. I know I did. But here’s the truth: we can either get back to offshore drilling quickly, or we can try to do it safely—but we can’t have both. And either answer could mean further trouble for the Gulf Coast.