Gulf Business Blown Out of the Water--By the Government

[excerpt:]

Matt is a mechanical engineer who owns a machine shop that caters to specific needs of the oil industry. His business utilizes expensive high-end computer-run machining tools that provide items requiring extremely high tolerances and specifications. Over 20 years he's built his company into one of the best in the world.

At the time that President Barack Obama took office, Matt had 84 employees and had just borrowed $5 million for expansion of his business operations. The expansion would allow him to bring on an additional 21 employees, bringing the total to 105.

During Obama's campaign, the oil industry was well aware that, if elected, he was going to pursue an agenda of cap and trade, a policy that would create a tremendous drag on the energy business. In response to Obama's election, the major oil companies immediately ceased all plans for future domestic operations and halted those currently in progress that could be stopped. The immediate effect on Matt was that his business fell off well over 50%. At the time of the BP spill, he was down to 34 employees and was barely hanging on. With the threat of drilling moratoriums, Matt expects his business to shut down and he'll have to file bankruptcy.

Complete article viewable at Minyanville.com.

[update, 06-20-2010: According to David Kotok of Cumberland Advisors in a commentary released today, "we estimate that an extended moratorium, which we now expect to continue because of Obama political calculus, will cost up to 200,000 higher-paying jobs in the oil drilling and oil service business and that the employment multiplier of 4.7 will put the total job loss at nearly 1 million permanent employment shrinkage occurring over the next few years."]

[update, 06-22-2010: Martin L. C. Feldman of United States District Court in New Orleans today issued a preliminary injunction against the enforcement of the Obama Administration's six-month moratorium on all offshore exploratory drilling in more than 500 feet of water. Citing potential economic harm to businesses and workers, Judge Feldman wrote that the Obama administration had failed to justify the need for such “a blanket, generic, indeed punitive, moratorium” on deep-water oil and gas drilling.]