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Protect American Energy Workers

BP has demonstrated time and again its unwillingness and inability to provide a safe work environment for America’s energy workers.. Follow Protect American Energy Workers on Twitter or read the blog.

Cuba Drinking U.S. Energy Milkshake in Eastern Gulf

The Obama administration’s top offshore drilling regulator Michael Bromwich spoke before Congress recently to ensure lawmakers that his agency was taking necessary precautions over a new oil rig en route to Cuban waters to operate just 60 miles from the Florida Keys. Bromwich said U.S. regulators would be inspecting the Chinese-built rig at the invitation of Repsol YPF – the Spanish-based operator – before it enters Cuban waters to confirm it meets all U.S. drilling standards.

Wait, so let’s get this straight: the administration is poised to bless a Chinese-built, Spanish-operated drilling rig near the Keys if it complies with rigorous new U.S. standards, yet won’t allow U.S. drillers to operate in these same Eastern Gulf waters?

On its face, this is simply absurd. The U.S. has the best drillers and the best drilling technology in the world, both of which can’t legally operate or be operated in Cuba. Yet the administration won’t ]allow them to drill in U.S. waters, but will approve foreign rigs in Cuban waters?

The administration scrapped a five year plan to open up the Eastern Gulf and much of the country’s East Coast after British-based BP’s oil spill, denying considerable economic and energy
benefits. A 2009 study using government economic modeling found that increasing offshore development could create 1.2 million jobs, increase economic output by $273 billion, and add $69 billion in increased tax and royalty payments. This growth would coincide with the development of an estimated 86 billion barrels of recoverable oil and approximately 420 trillion cubic feet of recoverable natural gas in U.S. waters. But, instead of taking advantage of this opportunity, we have seen a much different approach.

A year-long moratorium on Gulf drilling eliminated an estimated 20,000 U.S. jobs, and the country still faces an unacceptable 9.1 percent unemployment rate. The debt has skyrocketed to $14 trillion and debate in the nation’s capital rages over how to address the growing problem, with suggestions including raising taxes on oil and natural gas companies, despite the fact that this would result in a net fiscal loss of $53 billion. And the U.S. continues to import about 49 percent of the oil consumed domestically.

If the country’s new offshore drilling standards are strong enough to be supported in other countries off our
coasts, why does the administration continue to keep vast tracts of the Outer Continental Shelf (OCS) off limits? And we may not have forever to cash in on all of the oil available right now.

New horizontal drilling technologies allow oil rigs to reach miles out and drain vast underground reservoirs of energy resources from a central location. In the movie “There Will Be Blood,” a ranting Daniel Plainview (Daniel Day-Lewis) explains the technology to a down-and-out traveling minister attempting to sell his land. Cuba could be emptying resources that might otherwise be creating U.S. jobs, tax revenue, and wages.

It’s clear that the administration has faith in the new drilling standards, as evidenced by allowing a Spanish-manned rig to operate in waters 60 miles off our coasts. Continued delays and excuses for not using domestic resources further injure the country’s economic recovery. And with Cuba now developing resources in the Eastern Gulf, it appears the clock is ticking on our ability to capitalize on all our resource assets to address our growing energy demand.


Energy Sector Should Be Embraced to Grow Economy

How many times did President Obama mention energy in his speech to Congress last week? Zero, the President largely ignored one of the fundamental engines of our economy in a speech that was supposed to be centered on growing jobs in our nation. The President could not spare one word out of 4,000 to address the energy workers of America.

Instead, he largely focused on job creation tools like construction projects, payroll tax cuts, and unemployment insurance reform. These of course are all important steps to getting our economy back on track, except for the fact that the President desires to pay for this massive effort at the expense of oil and gas workers.

Instead of embracing a sector that has grown 16 percent since the start of the recession, his plan would destroy 155,000 energy jobs by specifically targeting the oil and gas sector for cutting deductions needed to compete against larger global competitors.

America has a plethora of energy opportunities and it is disheartening that President Obama did not share his vision on how we take advantage of this. A recent study revealed that over 1.4 million new jobs could be created if the President would only embrace domestic energy development of our vast oil and gas resources. If this Administration truly desires jobs, they have an peculiar way of showing it.

Senator Mary Landrieu (D-La.) reacted to the speech by saying it was “discouraging that the president said nothing about the key role domestic drilling — both on- and off-shore — will play in our economic recovery.” Our onshore and offshore opportunities for growth should be critical in our ability to grow the economy. Instead of ignoring the potential the energy sector brings in the way of jobs and revenue for the country and stifling a productive sector, President Obama should embrace the opportunities we have and move our country forward.


A Potential Step Toward Economic Recovery

The Obama Administration’s decision to restrain the EPA from going forward with a revised ozone standard is a step in the right direction towards building momentum for an economic recovery. Tightening the standard would have made it more difficult for businesses to expand, and placed a significant burden on counties to meet the standard or lose needed federal support.

By the EPA’s own estimation, the plan would have cost between $20 and $90 billion to the economy. The added burden this would cause would stifle job creation, a step which would have an especially large burden on the minority community. CNN reports:

Black unemployment surged to 16.7% in August, its highest level since 1984, while the unemployment rate for whites fell slightly to 8%, the Labor Department reported.

The article continues:

Black unemployment has been roughly double that of whites since the government started tracking the figures in 1972.

By pulling back on economically harmful regulations, the President is showing a commitment to job growth; something desperately needed in minority communities. With over 4,000 new regulations pending at the federal level, many of which will stifle energy employment opportunities, it is important that the Administration pushes forward with this effort. While delaying the ozone rule is a good first step, much more must be done if the President is serious about creating jobs and turning the economy around.


Extreme Regulation Policies Are Not a Solution for the Unemployment Issue

The Obama administration has been intensely regulating America over the past few years, negatively affecting the job market and increasing costs. Unemployment has been climbing rapidly, especially for those involved in the energy industry. Energy workers have been greatly affected by Obama’s extreme regulatory processes. The Environmental Protection Agency has passed many of these regulations, ultimately raising costs associated with rising energy prices. Big Government reports:

According to the Government Accountability Office, in 2010 no less than 43 major regulations were handed down by Washington lawmakers. The costs of the regulations were estimated at $26.5 billion. Regulating any part of the economy will have adverse effects on another. This is a known principle that applies everywhere because economics is only a measurement of reality and human behavior. When costs rise in one sector, they typically rise in other sectors brought on by inflation. For example, when regulations on energy production tighten, the cost on electricity goes up. Since everything imaginable requires electricity and fuel to produce, store, or transport; prices on totally separate and unconnected items like food to the car you buy will likewise go up. Hence the fitting term “hidden taxes” used to explain regulations – or to officially state it, a jump in the Consumer Price Index.

Chief among the hardest hit has been the energy sector. Of the 43 regulations mentioned, the Environmental Protection Agency (EPA) enacted 10 of those. The total costs of just these ten equaled over $23 billion of the estimated $26 billion mentioned.

If the President and Congress really want to correct the condition of our economy, they should ease up on regulatory policies that are often burdensome to small businesses and hamper investment in the communities that need growth the most. By altering regulatory policies, the Obama administration could significantly improve job creation, and once again set the U.S. on a path toward prosperity.


A Glimmer of Hope and Change for U.S. Energy Workers

The reinstatement of offshore drilling is an important issue that has needed addressing for some time now. Due to the Administration’s drilling ban and continued foot-dragging over new offshore development, thousands of Gulf residents unnecessarily lost their jobs. The uncertainty surrounding the future of energy production diverted capital and investment from the region and caused thousands more to lose their jobs. With the current condition of the economy, offshore oil and gas production should not be ignored. It appears the Administration is starting to get the message. The Wall Street Journal reports:

The Obama administration said it will sell leases for offshore drilling in the Gulf of Mexico for the first time since last year’s oil spill involving BP PLC and a subsequent six-month drilling ban.

The move comes amid criticism by the oil and gas industry that the administration is holding back oil production by being too slow to issue permits and lease new areas for exploration. A report this week by the U.S. Energy Information Administration found offshore oil production, most of which comes from the Gulf, is expected to be down 13% from 2010.

 The lease sale is part of a broader effort by the administration to resume offshore oil and gas production across the U.S. Earlier this month, the Interior Department gave Royal Dutch Shell conditional approval of its plan to drill in the Arctic Ocean next summer.

 The sale, to be held on Dec. 14, 2011, will include areas in the Western Gulf area off of Texas.

The announcement of new lease sales in the Gulf is a sign that we are back on the right track. The decision by the Obama administration to resume lease sales for offshore drilling is a progressive step toward improving the energy industry and fighting lingering high unemployment numbers. While it is still confusing as to why this did not occur sooner, I applaud the Administration for this effort.


BP Trial Details Emerge in Gulf

Gulf Coast residents may finally receive compensation for the financial setbacks stemming from BP’s 2010 Macondo oil spill. U.S. District Judge Carl Barbier today laid out the structure for the trial, which is currently scheduled to be held in February of next year. The Louisiana Record reports:

The first phase of the trial, dubbed the “incident phase,” will “address the conduct of various parties relative to the loss of control of the Macondo well and the sinking of the Deepwater Horizon,” Barbier said.

In March, a government investigative team concluded that a bent drill pipe and defects in the blowout preventer (BOP) on the Macondo well led to the Deepwater Horizon explosion and allowed oil to pour out into the Gulf of Mexico.

The second phase of the trial will discuss how much oil was spilled into the Gulf and who was responsible for the stemming and controlling the oil flow.

The third and final phase of the trial will deal with all other liability that occurred in the process of oil spill cleanup, including containment issues as relating to skimming, dispersants and the use of boom.

Further delays to this trial, which will have 108,000 plaintiffs who were affected by the spill, will only prolong the financial hardships caused by the company. It will be interesting to see if BP attempts to further delay the trial, or if the company will finally pay “all legitimate claims.”


Taxing Ourselves Out of a Crisis is Not a Real Solution

The debt ceiling debate has some politicians calling for higher taxes on our most productive industries. Oil and gas companies have historically been easy targets due to the financial magnitude of their operations, which offer high risk and high rewards when successful. Unfortunately, those calling for new taxes on this sector don’t understand that the jobs it creates and the economic growth it encourages do more than industry damaging tax increases to help address the debt.

Big Government highlights this fact in a recent post, and points out the ways this Administration is actually working against growth in this sector, to the detriment of economic recovery.

Since the BP Gulf Oil spill – which happened over one year ago – the Administration has been dragging its feet in allowing American companies to drill in American waters. Approvals for shallow- and deep-water exploration permits are down by over 50 percent and 80 percent respectively.  But a resumption of drilling would pour $44 billion into the American economy, create 230,000 jobs and, what’s more, increase tax revenues from American oil and natural gas companies by $12 billion, according to GEST (Gulf Economic Survival Team).

This tallies with the overall conclusions of Dr. Joseph Mason, who considers that we could achieve $8 trillion in new economic output over the next 40 years, meaning $2.2 trillion in tax and royalty revenues, from new drilling.

Obama favored increased offshore drilling as a candidate, however, as president, his preferred policy has been to limit oil and gas production and target the industry for enhanced taxation, despite the fact that a more robust industry would likely contribute to driving the deficit down during this presidential term.

The President has shown leadership by trying to work with his political opponents on a solution.  But, if Congress and the President are serious about ending the economic stagnation we’re experiencing, they should consider the collateral damage of higher taxes against an industry that continues to provide stability for its workers and pensioners. If fiscal revenue is the true subject of the debt debate, then Congress must act to stimulate economic growth and job creation, not institute market debilitating taxes that will cripple workers in the Gulf region.


U.S. Energy Policy Out of Touch on Gulf Spill Anniversary

Black Chamber President says Administration not utilizing domestic energy to create jobs, reduce deficit

National Black Chamber of Commerce President and CEO Harry C. Alford discussed the state of U.S. energy policies on the anniversary of the BP oil spill:

The unemployment rate is hovering near 9 percent, gas prices are above $4 a gallon in many places, and S&P has downgraded the U.S. credit outlook as a result of our $14 trillion in debt; but judging by the President’s energy policies you’d think everything was coming up roses.

The Administration shut down gulf drilling a year ago, they continue to ban energy development in most of the Outer Continental Shelf, and now the EPA is threatening to halt land based gas production, together costing the government billions of dollars in annual tax and royalty revenue. Meanwhile, current government policies are doling out $12.5 billion every year to renewable energy sources nobody can afford to buy.

High gas prices and heating bills are especially hard on small businesses operating on razor thin profit margins. It’s time the President got serious about addressing our economic and energy woes by taking common sense steps to put the nation back to work and reduce the budget deficit; current energy policies are simply not in line with these goals.   

To speak with Harry Alford, call Kay DeBow at (202) 553-7344.


Obama’s Remarks in Brazil Belie Double Standards on Oil, Gas Development

Washington D.C. – Harry C. Alford, President and CEO of the National Black Chamber of Commerce, responded to President Obama’s call for Brazil to expand offshore drilling and sell oil to the United States:

While the President encourages more energy production in Brazil, his domestic policies are stifling this very same production here at home. Instead of allowing our country’s workers to cultivate our domestic resources, the Obama administration continues to strangle U.S. energy production and jeopardize the livelihoods of countless Americans in the process.

In stark contrast to his treatment of U.S. oil and gas companies and the thousands of small businesses they support, the President offered Brazil’s state-owned Petrobras $2 billion to support offshore operations in 2009 and then granted the company one of the first deepwater permits in the Gulf of Mexico last week. U.S. leaders should support U.S. businesses, growth, and energy security, not Brazil.