Vendors and subcontractors outside of Texas and Louisiana spent $1.8 billion in the past three years to support shallow water energy exploration, according to a study released on Wednesday by the Shallow Water Energy Security Coalition (SWESC).
Deutsche Bank helped the 14 member companies of the SWESC compile domestic vendor and subcontractor expenditures for 2008-2010. Expenditures then were distributed by state and congressional district of the vendors' principal place of business. Texas and Louisiana vendor spending was excluded "to illustrate the nationwide economic impact of shallow water drilling," the coalition said.
Illinois, with more than $376 million in vendor and subcontractor spending, led all states, the study found. Vendors in the Chicago area, which spent a total of $242 million in the last three years, were the biggest spenders.
"If President Obama doesn't care about jobs in the Gulf, he should at least care about jobs in his own hometown," said SWESC Executive Director Jim Noe. Obama has a home in Chicago. "Shallow water exploration provides affordable energy for all Americans and supports jobs in every corner of America. Bureaucratic inaction has already forced a federal judge to find the Obama administration in contempt of court for not approving drilling permits."
If the president and the Department of Interior "will let shallow water drillers do our jobs, it will help the rest of the nation get back to work," said Noe.
The study, "Domestic Vendor Spending Outside the Gulf," found that about $1.3 billion of the total three-year spending was concentrated in seven states. After Illinois, vendor spending was highest in Pennsylvania, at $245 million, followed by Wisconsin, $176.5 million; New York, $139.6 million; California, $138 million; Oklahoma, $125.8 million; and Alabama, $104.5 million.
By congressional district, vendor spending was highest in the districts of these House members: Danny Davis (D-IL), $242.2 million; Chaka Fattah (D-PA), $159.3 million; Peter Roskam (R-IL), $91 million; Reid Ribble (R-WI), $89.3 million; John Sullivan (R-OK), $87.2 million; Thomas Petri (R-WI), $83.6 million; and Jerrold Nadler (D-NY), $78.2 million.
Shallow water vendor spending has a "nationwide economic impact," said the coalition. Spending related to shallow water exploration was from 219 congressional districts, which included 102 districts where more than $1 million was spent; 32 districts with spending of $10 million or more; and seven districts with spending of at least $75 million.
The SWESC, which was formed last year after Obama placed a moratorium on deepwater drilling in the Gulf of Mexico, is composed of Apache Corp., Arena Offshore, Chevron Corp., Delta Towing LLC, Dynamic Offshore Resources LLC, Energy XXI Ltd., Ensco plc, Hall-Houston Exploration Partners LLC, Hercules Offshore Inc., Phoenix Exploration Co., Rowan Cos. Inc., Seahawk Drilling Inc., W&T Offshore Inc., and Walter Oil & Gas Corp.
Seahawk, which owns 20 rigs and is the second largest shallow water driller in the GOM, filed for bankruptcy in February (see Daily GPI, Feb. 15). CEO Randy Stilley said at the time the "decision by regulators to arbitrarily construct unnecessary barriers to obtaining permits they had traditionally authorized has had an adverse impact not only on Seahawk but on the sector as a whole."
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