Permanently lifting the moratorium on oil and natural gas drilling in the federal Outer Continental Shelf (OCS) would contribute $273 billion annually to the national economy, according to a new study by the American Energy Alliance (AEA), a Washington, DC-based public policy advocacy group.

Unlocking access to the more than 85 billion bbl of recoverable oil and 440 Tcf of natural gas in the OCS would generate $8 trillion in additional economic output; $2.2 trillion in total tax receipts; 1.2 million in new, well-paying jobs annually; and $70 billion in additional wages each year, said the AEA report, which was released in advance of a Tuesday House hearing on offshore drilling.

“Unlike the $790 billion stimulus package lawmakers just passed, increased offshore activity would fuel our economy without squandering taxpayer funds. In fact, oil and gas is one of the U.S.’s only industries in a position to put money into, rather than take money out of, the government’s piggy bank,” the study noted.

In contrast, an American Petroleum Institute study released in December estimated that developing offshore resources that had been banned by Congress for nearly three decades could produce more than $1.7 trillion for the federal government (see Daily GPI, Dec. 10, 2008).

Congress let the long-standing congressional moratorium on drilling expire on Nov. 1, 2008 as part of a stopgap measure to fund the federal government through March of this year (see Daily GPI, Sept. 30, 2008). Earlier in the year President Bush issued an executive order shelving the parallel presidential ban on drilling in federal offshore areas (see Daily GPI, July 15, 2008). The two actions lifted all restrictions on drilling in the OCS.

Producers are concerned that President Obama and Congress may take steps to reinstate the bans on drilling in much of the OCS. They haven’t done so yet, but the Obama administration earlier this month stalled the review of the new five-year offshore leasing plan (2010-2015) that was issued in the final days of the Bush administration (see Daily GPI, Feb. 11). The Bush-era plan proposed lease sales in long-banned areas off the East and West coasts and in the eastern Gulf of Mexico (see Daily GPI, Jan. 20).

A potentially favorable development occurred Monday — there was no language to reinstate the OCS ban in a $410 billion omnibus appropriations measure, which was unveiled by the House. The measure included nine separate spending bills to fund the federal government for fiscal year 2009. One of the appropriations bills — funding for Interior, Environment and Related Agencies — traditionally has included a provision to annually approve the moratorium. But the latest measure said it “does not contain language providing for a moratorium on Outer Continental Shelf oil and gas leasing activities.”

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