Louisiana governor: Let's start drilling

By Ben Rooney, staff reporter


NEW YORK (CNNMoney.com) -- Louisiana Governor Bobby Jindal railed against the federal ban on deepwater drilling in the Gulf of Mexico at a rally on Wednesday, saying the "arbitrary moratorium" could cost the region hundreds of thousands of jobs.

Speaking at an "Economic Survival Rally" in Lafayette, Jindal called on the Obama Administration to end the ban on drilling for oil and natural gas in more than 500 feet of water, which was instituted earlier this year in response to a devastating oil spill in the Gulf.

"The folks in Washington just don't seem to understand that you can't just turn a switch on and off with these rigs," Jindal said. "When they leave our coast to produce oil in other parts of the country or the world, the jobs that support them go too."

Jindal said the freeze on deepwater activity could cost Louisiana 20,000 jobs over 12 to 18 months. Lost wages for those jobs could be as high as $5 to $10 million per month, per rig, according to the governor's office.

The comments came days after the Interior Department issued the first permit for drilling in shallow water, less than 500 feet, under a new set of safety and environmental regulations.

On Friday, oil and gas firm Apache Corp. was issued a permit to drill for natural gas off the coast of Texas in about 50 feet of water. The company said it began work on the well on Sunday.

Jindal acknowledged that there are some faint signs that drilling activity in shallow water is resuming.

"I'm very very very, I want to put as many verys as you can before that, cautiously optimistic on the shallow water situation," Jindal told reporters after the rally.

While there was never an official ban on drilling in shallow water, industry officials and politicians like Jindal have argued that shallow water activity has effectively been frozen for months.

"There's not an official moratorium, but there has been a de facto moratorium," Jindal said.

According to Louisiana Department of Natural Resources, the number of permits issued for drilling in shallow water in the Gulf has plunged to 1 in July from a high of 24 in March.

The government first announced a six-month ban on deepwater drilling on May 28, just weeks after the Deepwater Horizon drill rig exploded and sank, giving rise to the worst oil spill in U.S. history.

But on June 22, a federal judge overturned the ban. A government attempt to overturn the ruling was denied by a U.S. court of Appeals on July 8. A few days later, Interior Secretary Ken Salazar re-worked the old moratorium, issued a new one on July 12, and changed the label to "suspension."

"On the deep water moratorium we have not seen any movement," Jindal said.

--CNN's Dugald McConnell contributed to this report.  To top of page

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