U.S. officials saw drilling ban costing jobs: report

WASHINGTON (BestGrowthStock) – Senior U.S. officials expected the deepwater drilling ban to cost about 23,000 jobs and hold up $10.2 billion in investments, The Wall Street Journal reported on Friday, citing federal documents.

The Obama administration issued the initial moratorium in late May after the huge BP Plc oil spill in the Gulf of Mexico. The ban spurred opposition from oil companies and local lawmakers who said it would exact a heavy toll in jobs and hurt crude production in coming years.

After a federal judge threw out the original ban partly on grounds it was economically unjustified, the Interior Department issued a new moratorium on July 12, barring new oil drilling in the Gulf of Mexico through November 30.

The Journal said new documents shed light on the Obama administration’s deliberations on the economic impact of its drilling moratorium.

According to the documents, the top offshore drilling regulator, Michael Bromwich, told Interior Secretary Ken Salazar the halt on new drilling “will have a significant economic impact on direct and indirect employment in the oil and gas industry, as well as other secondary economic consequences,” the newspaper said.

A federal regulatory agency memo predicted the moratorium would affect about 9,450 workers in “lost direct employment” and 13,797 more in jobs lost through indirect effects, according to the newspaper.

U.S. officials signaled previously they expected serious economic ramifications from the moratorium.

In July, federal forecasters predicted a cut in oil production in 2011 by 82,000 barrels per day, or almost 30 million barrels, due to delayed or canceled drilling caused by the moratorium.

The Journal said the Justice Department filed the disclosed documents in the latest round of litigation over the federal drilling ban in a New Orleans federal court.

The latest lawsuit was filed on Tuesday by Ensco Plc challenging the new moratorium as mostly the same as the first ban the U.S. court put on hold.

The Obama administration has defended the need for suspending deepwater drilling, saying it gives officials more time to investigate the cause of the BP disaster, issue new safety regulations and improve oversight.

(Reporting by Alina Selyukh; Editing by Peter Cooney)

U.S. officials saw drilling ban costing jobs: report