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BP Plc's oil spill may cost the U.S. Gulf Coast region 17,000 jobs and about $1.2 billion in lost economic growth by year-end even if the flow is stanched permanently next month, Moody's Analytics said in a report.
Under a more pessimistic scenario in which the oil spill continues through December and President Barack Obama's six- month moratorium on deepwater drilling is extended, economic losses may reach $7.4 billion, and more than 100,000 jobs would be lost, Moody's said today in a report written by Marisa Di Natale, a director based in West Chester, Pennsylvania.
Louisiana, with its heavy dependence on fishing, aquaculture and oil extraction, and Florida, which relies on tourism, are likely to be hardest hit by the spill, the report said. Outside the five-state Gulf region, which also includes Texas, Alabama and Mississippi, the spill's impact is likely to be negligible, according to the report.
“We're talking about a very localized impact,” Di Natale said in a conference call after the release of the report. “We don't think there's going to be a major impact when we look at the national economy.”
The Moody's forecast assumes the well will continue to leak until early August, when two relief wells stop the flow permanently, and that none of Florida's Panhandle beaches will be closed as a result of the spill.
Obama's Moratorium
The report warns that the six-month moratorium on new deepwater oil-drilling alone may cause more job losses than the spill's direct impact on Florida tourism.
The oil leak may potentially be stopped sooner than Moody's baseline scenario. BP Plc halted the flow of oil from the well for the first time July 16 and was given permission earlier today to keep the well closed for another 24 hours.
A separate, industry-funded report released today also warned of the impact of the moratorium on new deepwater drilling, saying it is “crippling the local economy” and may cost the region 8,169 jobs and about $2.1 billion in economic losses in its first six months.
The study, commissioned by the American Energy Alliance, the advocacy arm of the Institute for Energy Research, a Washington-based research group, predicted that nationwide job losses will reach 12,000 in six months, costing the U.S. economy about $2.8 billion in lost activity and $219 million in tax revenue.
“The moratorium could be more costly than the oil spill itself,” Joseph R. Mason, author of the study and professor at Louisiana State University in Baton Rouge, said in a release accompanying the report. “By stifling one of the area's primary economic engines, the administration is crippling the local economy and risking long-term consequences.”
To contact the reporter on this story: Simone Baribeau in New York at [email protected]
To contact the editor responsible for this story: Mark Schoifet at [email protected]
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