Republicans Say Obama’s Drilling Moratorium Could Have Taxpayers Picking Up Tab for More Unemployed Oil Workers

July 29, 2010 - 11:15 AM
Marking the 100th day after the Gulf oil spill disaster on Wednesday, House Republicans held a press conference to denounce the Obama administration's moratorium on offshore drilling as well as Democrat-sponsored legislation arising from the oil spill.
Rep. Scalise

Reps. Steve Scalise (foreground), and John Fleming, both Republicans from Louisiana, said at a press conference on July 28, 2010 that the Obama administration's moratorium on deepwater offshore oil drilling could end up forcing American taxpayers to foot the bill for unemployment benefits for idled oil workers. (CNSNews.com/Penny Starr)

(CNSNews.com) – Critics of the Obama administration’s moratorium on offshore drilling say it will put more workers on the unemployment rolls at taxpayer expense -- especially those in the Gulf region, which is struggling to recover from the April 20 Deepwater Horizon oil rig explosion and subsequent oil leak.
 
Marking the 100th day after the disaster on Wednesday, House Republicans held a press conference to denounce both the drilling moratorium and Democrat-sponsored legislation arising from the oil spill.
 
HR 3534, the Consolidated Land, Energy and Aquatic Resources (CLEAR) Act -- will harm the economy by killing even more jobs and raising energy prices, Republicans say. They also accuse Democrats of using the oil spill as a political opportunity to push through provisions that are unrelated to the oil spill or to offshore drilling.
 
“These people (in the Gulf) don’t want unemployment (benefits) -- they want their jobs, they want their careers back,” Rep. Steve Scalise (R-La.) told CNSNews.com when asked at the press conference if taxpayers would help BP pay for damages through unemployment benefits.
 
“One of the first meetings the president had on the ground after he announced the moratorium, you had some of those local people who are going to be impacted by this moratorium asking him about their careers,” said Scalise, a member of the House subcommittee on energy and environment.
 
“You’ve got people who have been working in this industry for 10, 15, 20 years, and these are good-paying jobs, and they’re concerned about their future,” Scalise said. “And the president kind of flippantly said, ‘Oh, you can just go get unemployment.’” 
 
In early June, a White House spokeswoman encouraged idled oil workers to apply for unemployment benefits – which are paid for by taxpayers.
 
Moira Mack, quoted by The (New Orleans) Times-Picayune, also said that a change in the law might be necessary to cover all workers impacted by the moratorium.
 
"To the extent there is any delay in BP and other responsible parties paying such compensation, employed individuals who are laid off should file with their state for regular unemployment insurance benefits and other applicable benefits," Mack said.
 
Mack said the administration is seeking legislation that would make oil rig workers, whose employment isn't always steady enough to qualify for unemployment, eligible for the benefits.
 
She said the administration would seek reimbursement from BP for any government funds allocated for unemployment benefits for these workers.
 
At a White House meeting with President Obama on June 16, BP officials – under pressure from the White House -- voluntarily agreed to establish a $100-million fund to compensate oil rig workers who lost their jobs because of the Obama's administration's moratorium on deepwater drilling.
 
Carol Browner, the White House Energy Czar, later that same day told reporters the administration is seeking the help of Congress to fund the “unemployment insurance portion” of laid-off oil employees, which would be in addition to the $100-million BP fund.
  
Browner said some laid-off oil workers probably would qualify for unemployment compensation under existing law, but "some might not. So we’re seeking to make sure that all of them qualify."
 
Browner said both the $100-million BP fund -- "and the work that we’re doing in Congress we think is a significant step towards meeting their needs."
 
At Wednesday’s press conference, Rep. Scalise said the administration should take responsibility for a national unemployment rate that is hovering just under 10 percent.
 
“The president has actually implemented many policies – and this (the offshore drilling moratorium) is just one clear example – that are running jobs out of this country,” Scalise said. “People don’t want to be on unemployment. They want jobs.”
 
On July 12, the American Petroleum Institute, the trade association that sets standards for the oil and natural gas industry, said the moratorium on offshore drilling could have devastating effects.
 
“It is unnecessary and shortsighted to shut down a major part of the nation’s energy lifeline while working to enhance offshore safety,” Jack Gerard, president and CEO of API, said in a statement. “The new moratorium threatens enormous harm to the nation and to the Gulf region.  It places the jobs of tens of thousands of workers in serious and immediate jeopardy and promises a substantial reduction in domestic energy production.”
 
Gerard added that the moratorium does not include a timetable for the resumption of offshore production.
 
“The 33 now-idle deepwater drilling rigs in the Gulf have passed thorough government inspections and are ready to be put back to work,” said Gerard, who noted that the government already has added significant new restrictions and that the oil and gas industry is working on boosting safety in its operations.
 
“Eighty percent of the oil and 45 percent of the natural gas produced in the Gulf come from deepwater areas,” Gerard said.  “The 20 most prolific producing blocks in the Gulf are located in deep water. Deep water is indispensable to a strong and secure energy future.  The moratorium makes that future uncertain.”
 
House Republicans and the API say the CLEAR Act, introduced by Rep. Nick Rahall (D-W.Va.), chairman of the Natural Resources Committee, will harm the economy and increase unemployment. The bill has cleared Rahall’s committee and now awaits action by the full House.
 
Among other things, the House version of the CLEAR Act would require oil companies to pay more into a new Oil Spill Liability Trust Fund, requiring them to cover 100 percent of the oil cleanup costs and damages caused by spills they create. Oil companies responsible for oil spills, such as BP, would be barred from bidding on new offshore drilling leases.
 
In addition, the bill would use higher taxes on oil companies to fund a Land and Water Conservation Fund and the Historic Preservation Fund, as well as a new trust fund to protect and preserve oceans.
 
The bill also would establish a Gulf of Mexico Restoration Program and establish new procedures for the use of chemical oil dispersants. And it would give the president's Commission on the Deepwater Horizon oil spill subpoena power.
 
"This 'fix it' bill is being rammed through without an accurate and full understanding of what actually went wrong,” Rep. John Fleming (R-La.) told CNSNews.com. “Furthermore, at a time when Washington should be focused on creating jobs, this bill will do just the opposite by hampering future energy development and stifling job creation along the Gulf Coast.
 
“This knee-jerk legislation -- coupled with the administration's damaging moratorium on offshore drilling -- will worsen, not help, the situation,” Fleming said.
 
“The bill passed by the House Natural Resources Committee today moves well beyond a response to the tragic accident in the Gulf of Mexico, to the point where – if adopted by the Congress – provisions of the legislation will kill jobs, stifle economic recovery and punish an already-reeling Gulf Coast community,” API’s Gerard said in a statement on July 14, the day the bill passed the committee on a 27-21 vote.
 
“The numerous provisions that discourage U.S. oil and natural gas development have the potential to drive investment out of the United States, killing U.S. jobs and harming our economy,” Gerard said.
 
Gerard said the oil industry supports safe and environmentally sound operations. “But we cannot forget that oil and natural gas demand is growing and that it is critical to every sector of our economy.”
 
Rep. Doc Hastings, the ranking Republican on the House Natural Resources Committee, said the Democrats' bill "includes page after page of provisions that are unrelated to the oil spill and will kill American jobs." Congress should wait to get the "full facts" from ongoing investigations into the oil spill before enacting laws that "impose even further economic harm," Rep. Hastings said.
 
Republicans say the CLEAR Act would place higher taxes not just on offshore drilling but on onshore oil and gas production -- raising energy prices for American families and businesses, cutting domestic jobs, and increasing U.S. dependence on foreign oil.
 
They say it creates $30 billion in mandatory spending for two programs -- the Land and Water Conservation Fund and the Historic Preservation Fund -- that have nothing to do with the oil spill.
 
In addition, Republicans say the CLEAR Act would have the federal government take over state permitting in state waters, reversing 60 years of precedent. It would allow for "ocean zoning," which could lead to restrictions on fishing, energy production and even onshore activities such as farming.
 
Sen. Harry Reid introduced the Senate version of the CLEAR Act on Tuesday.