Could BP Derail Economic Recovery?

The oil spill, seen here, is being invesigated by the Coast Guard after it was reported in the vicinity of South Pass, La. April 6, 2010. Flickr/<a href="http://www.flickr.com/photos/coast_guard/4500067344/">U.S. Coast Guard</a>

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.


Not only is BP’s 49-day-old oil spill in the Gulf of Mexico the worst in US history, its after-effects—especially the moratorium on offshore drilling instituted by President Obama in May—could lead to a crippling economic disaster in the Gulf Coast region, if not the country. In a worst-case scenario, if the spill continues to shut down local industry deep into this fall, experts in the Gulf coast region say the Deepwater Horizon calamity could pave the way for a double-dip recession.

Among the sectors facing shutdown stemming from Obama’s moratorium are Louisiana’s oil and gas, fishing, and tourism industries. Yet, as NPR’s John Ydstie reported today, the woes of those industries will ripple throughout Gulf Coast states’ economies, hurting everyone from tug boat captains, boat engine repairmen, hotel operators, to bar owners. As Ydstie reported, the oil and gas industry makes up 16 percent of Louisiana’s GDP; tourism and fishing comprise 4 percent and 1 percent, respectively. The state’s economic development organization estimates that 20,000 jobs could be lost, and the Tulane University Energy Institute went so far as to say that the spill’s economic reverberations could cause a double-dip recession. (Analysts with Moody’s Economy.com denied that claim, NPR’s Ydstie says.) “Guys that sell maintenance and repairs, guys that sell engines—there’s lots of banks out there who only loan money to the oil and gas sector,” Shane Guidry, chairman and CEO of Harvey Gulf International Marine, told NPR. “They’re going to be affected. I mean, it just goes on and on and on. Carmakers—people won’t be buying cars, houses…They won’t have jobs to pay for it.”

All of this leaves Obama in a nasty pickle. He had practically no choice, in the spill’s aftermath, but to place a temporary moratorium on offshore drilling. (Though that hasn’t completely stopped the practice.) But in doing so, he risks partly undermining his own efforts to stabilize the economy and add jobs to the workforce each month—not eliminate them. And job creation, at least in the private sector, is something the president’s having enough trouble with already. Obama has said he would consider ending the moratorium early based on the findings of a commission studying the spill, but if he does, the move will certainly rile up environmental groups who want an end to offshore drilling altogether. He’s stuck between a rock and a hard place, with few good options anywhere he looks.

THE TRUTH IS...

what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

payment methods

THE TRUTH IS...

what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate