Oil industry pushes panic button over Gulf of Mexico environmental review

The oil industry is pushing back against the Obama administration's recently-announced plans to conduct an environmental study of new drilling in the Gulf of Mexico in the wake of BP's Deepwater Horizon disaster.

On Nov. 4, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE, formerly known as the Minerals Management Service), announced that it would begin work on a supplemental environmental impact statement for the remaining Gulf oil and gas lease sales scheduled in the latest five-year plan for drilling on the Outer Continental Shelf. The study is one of the steps BOEMRE is taking to gather public input on the environmental impact of the BP spill.

"These continued assessments will allow us to make objective, science-based decisions about the activities involved in offshore energy exploration, development and production," said BOEMRE Director Michael Bromwich.

But the industry objects to the possibility that sales of drilling leases could be canceled while the study is underway. On Monday, the American Petroleum Institute (API) held a conference call during which it warned that a lengthy study risks hurting the industry and the region's economy, the Houston Chronicle reported:

"A weak economy and the growing cost of new development already make new development a challenge," [API Upstream Director Eric] Milito said in a conference call. "Long delays in leasing just increase the difficulty in getting that job done."

API is a trade association and lobbying group that represents nearly 400 corporations involved in all aspects of the U.S. oil and natural gas industry. Long a powerful force in state and federal politics, API upped its lobbying efforts significantly in the wake of the BP disaster, boosting its lobbying expenditures from the first quarter to the second quarter of this year alone by $1 million. So far this year, API has spent more than $4.8 million on lobbying, according to the Center for Responsive Politics. 

While Milito said the industry supports a new environmental analysis in light of the BP catastrophe, it wants it done quickly. Lease sales are currently planned for March and August of 2011, with another set for early 2012. Some industry insiders are predicting the government will cancel the March sale.

API claims that the potential delays due to the study -- coupled with a slowdown in permits for new offshore drilling projects in the wake of the BP disaster --  risk more than 100,000 jobs directly and indirectly connected to the industry.

But the industry has made dire claims about job losses before that proved to be exaggerated.

As Facing South reported, after the Obama administration imposed the six-month moratorium on new deepwater drilling following the BP spill, an oil company-funded front group called the American Energy Alliance warned that 8,000 jobs and $500 million in wages would be lost, with total economic damages amounting to over $2 billion.

Those dire predictions never materialized, however. In fact, unemployment claims in Louisiana declined in the three months after the deepwater drilling ban took effect.