Well, maybe.
The $250 million dollar legislation aimed at tightening offshore drilling regulations is currently in limbo. The vote regarding the future of the Environmental Protection Agency (EPA)'s ability to regulate is also still up in the air. Yesterday's vote was cancelled due to a request for an additional $64 million dollars in funding which would raise the cost of the bill to $250 million from $184. If passed, the legislation would provide the EPA with a stimulus of funds to use at its discretion.
This possible free license of funds drew outrage from the American Petroleum Association (APA). Not only would the EPA be able to enact new policies that could yet again shake the profit margins of the energy industry, but the bill allowing them to do so would be financed in part by the companies themselves; the White House has suggested taxing the oil and gas companies even more in order to make the numbers for its $250 million regulatory bill. The industry isn't alone in its outrage, though. Senator Lisa Murkowski (R., Alaska) has floated the possibility of proposing an amendment to prohibit the EPA from spending money on greenhouse gas regulation from power plants and other major emitters in response to the bill. Additionally, some Democrats agree that this is not the time for greenhouse gas regulation.
With the economy still fragile, the APA and Congress alike are worried that the proposed legislation will stifle investment and job creation— as they should be. Additional regulation would be the second major blow to the industry this year as it currently suffers from the moratorium. More importantly, this isn't just any industry, it is the US Energy Industry: an industry whose operational sector alone employs over 413,000 people across upwards of 10,000 companies.
As the White House continues its attempts to lower unemployment and restart the economy, it should look to provide investment incentives to stable employers instead of stopping them. The oil spill has Americans angry, but what has them angrier is the grim unemployment outlook and a lack of available capital. The industry isn't perfect, and BP has their work cut out for them, but what the country needs now is a spark, not more red tape.
Sources: S&P Industry Index, The Wall Street Journal
According to a Wall Street Journal article published today the Federal Government has decided that all Gulf of Mexico oil wells that have not been in use for at least five years are to be plugged. This probably should help to create some form of employment for all of the rigs workers who are currently unemployed due to the moratorium. In addition this could be somewhat help to light or create the "spark" of optimism that you discussed in your posting.
ReplyDeletesource:http://online.wsj.com/article/SB10001424052748703743504575493782591743858.html?mod=WSJ_hps_LEFTTopStories
While I agree that Americans would like to see more jobs created in the US, especially private sector, long-term jobs. But I do not this Americans want, nor is it in their best interests to provide investment in or tax breaks for oil companies. I do, however, believe that the government should lift the moratorium on drilling immediately, and that not doing so would provide other nations with an advantage in establishing greater productive output of energy while we continue to stifle American production. Ultimately, I feel that which ever direction this Administration turns it will be met with criticism, and that balancing job losses and future economic implications with issues of environmental and regulatory responsibility will prove a lose-lose for the President.
ReplyDeleteA lot of it depends on what you believe in. If you're into Reaganomics or a more supply-side based theory then you would agree that tax incentives for corporations and small businesses will trickle down to drive the economy. If not, we would just philosophically disagree on the issue.
ReplyDelete