That’s the minimum effect to Gulf Coast states of the deepwater drilling moratorium, according to a study released today by Dr. Joseph R. Mason, Hermann Moyse Jr./Louisiana Bankers Association Endowed Chair of Banking at LSU’s E. J. Ourso College of Business.
Mason’s study was commissioned by the American Energy Alliance, and it uses numbers he considers “very conservative” – assuming only a six-month cessation of drilling among the 33 rigs in operation in Gulf deepwater operations at the time of the Deepwater Horizon explosion on April 20. Mason uses the Bureau of Economic Analysis’s RIMS II “input-output” analysis to measure the economic effects associated with a potential production stoppage, and in that analysis he finds that American economic output will be lessened by almost $2.8 billion over that six months, with $2.1 billion of it hitting the Gulf Coast. That loss includes 8,169 Gulf Coast jobs out of 12,046 total national jobs, with the loss of $487 million in Gulf Coast wages and $707 million overall. Lost wages in Louisiana alone are pegged at $280 million in the study, with 4,719 jobs lost.
Mason says the moratorium will likely result in a larger economic loss to the region than the oil spill itself should it last longer than six months, which other studies have concluded is highly likely.
Mason’s report says a permanent drilling moratorium could result in the loss of 400,000 jobs and $95 billion in economic losses.
“It’s important to remember that these numbers are designed so that you could argue they’ll be larger,” said Mason, “but that you can’t argue they’ll be lower. We’re setting a baseline for the economic effects of the moratorium.”