Drilling delays in US Gulf would cause oil price hike, job losses: API
29 May 2010
The American Petroleum Institute (API) has warned the US administration against a lengthy delay in offshore oil and natural gas development, as it would cause a spike in oil prices and loss of jobs at a time when it would hurt more.
While correcting the causes of the Gulf of Mexico accident are essential, API said offshore development is equally crucial to creating and saving jobs and strengthening US energy security.
"We understand the concerns many people have about offshore drilling in the wake of this incident, and the frustration many feel toward oil companies.
But this issue is much larger than the oil industry, since access to affordable energy impacts every sector of our economy, every state in our nation and every American family. Further, thousands of products - from toothpaste to iPods, cell phones to computers, and vitamins to vegetables - use oil and natural gas as a feedstock in the manufacturing process," API's president and CEO Jack Gerard said.
"An extended moratorium on safely producing our oil and natural gas resources from the Gulf of Mexico would create a moratorium on economic growth and job creation -especially in the Gulf states whose people and economies have already been most affected by the oil spill - by undercutting our nation's access to affordable, reliable, domestic sources of oil and natural gas," he said.
America, he said, got 70 per cent of its oil and 36 per cent of natural gas from overall federal Gulf of Mexico production. The 20 most prolific producing blocks in the Gulf are located in deepwater, he added.
"Additional moves to curtail domestic production by postponing exploration and development off the coasts of Alaska and Virginia, as well as areas in the Gulf, have the potential to significantly erode our energy and economic security," Gerard said.
API has asked the US Congress to reconsider any decisions that would place previously available lease areas off limits, and to ensure that the process do not impact US energy security and economic future.