Petroleum industry report inflates benefits of offshore drilling
A report from oil-industry lobbyists supporting offshore drilling relied on inflated numbers, speculative claims and overestimations, according to an economic analysis provided to SELC.
As a result of those shortcomings, economics researchers said of the American Petroleum Institute study: “We cannot recommend that the API report be relied upon for policy or regulatory decision making.”
The fact-checking analysis from Applied Economics Clinic analyzed the API’s April report of claimed economic benefits of offshore drilling. AEC determined, among other things, the petroleum industry’s job promises were exaggerated and the predicted amount of offshore oil and gas supply offshore was likely overestimated.
The report is one of many efforts from API and other industry lobbyists to challenge widespread condemnation of the Trump administration’s plans to open the Atlantic to drilling. More than 200 East Coast cities, towns and counties have passed resolutions opposing offshore drilling.
Despite the growing opposition, Trump is expected to announce later this year or early next what sections of the Atlantic will be offered to oil and gas companies for lease.
The oil and gas industry is hawking wild speculations about employment, but we know for certain that tens of thousands of coastal jobs would be threatened if offshore drilling moves forward,” said Sierra Weaver, a senior attorney at SELC. “Nothing the industry dreams up would be worth risking the incomes these coastal communities derive from clear water and clean beaches.
Among the speculations API floats is billions of dollars to state economies through revenue sharing. But the researchers point out the actual benefit would be $0 because federal law does not allow revenue sharing.
The API report also fails to take into account the declining production of offshore oil and gas coupled with the increase in renewable energy. And the industry ignores losses to the fishing and tourism industries that accompany offshore drilling and oil and gas infrastructure.
“Coastal communities and neighbors are united against offshore drilling, and empty industry promises will not change that,” Weaver said.