Gulf Oil Production, Creating an Oil Economy
Following the Gulf oil spill, there has been a number of people who have been effected economically. Many locals working within the oil and gas industry lost their jobs or moved jobs elsewhere. However, if drilling were to be brought back, things could change dramatically. According to Christopher Helman, it could create 230,000 more jobs and adds about $44B to the economy. Helman has compiled some great details on this conclusion.
The effect would be felt far from the Gulf coast states — with manufacturing centers like Pennsylvania and Ohio enjoying more business. Additionally, IHS-CERA determined that a return to activity levels would generate $22 billion in direct wages, unlock $19 billion a year in pent-up capital investment, and create $6 billion a year in royalties and tax payments.
Then there’s the impact of what all this labor and investment would ultimately produce — an additional 150 million barrels per year of oil from the deepwater Gulf of Mexico alone.
That’s more than twice the amount that the administration agreed to release from the Strategic Petroleum Reserve, and which the administration will eventually need to repurchase from the market and return to the strategic petroleum reserve.
That’s enough oil to replace half of the shut in volumes from Libya. And enough (at an average $100/bbl) to offset $15 billion a year in oil that we have to buy from the rest of the world.
Setting the record straight on the administration’s insistence that the new Bureau of Ocean Energy Management is getting oil and gas operators back to work in the Gulf, IHS-CERA looked at the pace of permitting in the six months since the moratorium was officially “lifted.” They found that relative to activity before the spill, there’s been an 86% plunge in plans approved by regulators, a 38% increase in the time taken for the plans that did get through to be approved, and a 60% drop in the number of drilling permits issued.
The oil and gas indsutry has a huge impact on the state of our economy. These numbers show this well. With Gulf production back in full swing, positive change could come in the form of jobs and economic boosts all around. This may make people reconsider the moratorium on Gulf drilling.
Quotes taken from report by Christopher Helman, Read the entire article here.
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