US officials saw drilling ban costing jobs -WSJ

* ‘Significant economic impact’

* Ongoing litigation over moratorium

WASHINGTON, Aug 20 (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 (BP.L: ) (BP.N: ) 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 Nov. 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
(ESV.N: ) 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)

US officials saw drilling ban costing jobs -WSJ