Gulf oil disaster could destroy over 100,000 jobs

By Agence France-Presse | Tuesday, July 20th, 2010

The impact of the Gulf of Mexico oil spill was thrown into sharp relief Tuesday, as US data showed rising unemployment in Louisiana and experts warned the disaster could cost up to 100,000 jobs.

The US Department of Labor said Louisiana -- among the US states worst hit by the spill -- was one of only five states across the country to see a rise in unemployment last month, with the jobless rate up 0.2 points to seven percent.

While the bayou state's unemployment rate remains well below the national average of 9.5 percent, the data comes amid warnings that a worst-case scenario would see 100,000 jobs lost across the Gulf Coast.

Analysts at Moody's reported that the region could face billions of dollars in lost growth from the spill, depending on whether a recent cap halts the flow of crude.

"Moody's Analytics estimates that nearly 1.2 billion dollars in output and 17,000 jobs will be lost in the Gulf Coast states by the end of this year," the firm said in a report.

"Under a more pessimistic scenario in which the oil spill continues through December and President (Barack) Obama's moratorium on deepwater drilling is extended until year's end, 7.4 billion dollars in output and over 100,000 jobs would be lost."

BP crafted a new plan Tuesday hoping to seal for good the blown-out well that has disgorged oil onto hundreds of miles (kilometers) of coastline, ravaging thousands of livelihoods.

"The most direct impact thus far is being felt by the Gulf Coast's sizeable fishing and aquaculture industry, especially in Louisiana," Moody's said.

The oystermen, shrimpers and others affected by the spill stand to claim spill damages from BP, which has set aside 20 billion dollars in compensation.

"The largest economic impact of the oil spill will be at the local level.... Louisiana and Florida are likely to be hardest hit because of Louisiana's heavy dependence on fishing, aquaculture and oil extraction, and Florida's heavy dependence on tourism."

But Moody's warned that a larger economic impact may come from a decision by Obama's administration to freeze deep-sea oil drilling.

"The potential for even greater economic damage to Louisiana's economy stems from President Obama's six-month moratorium on new offshore drilling."

The order froze the work of 33 rigs, including 20 off the coast of Houma, Louisiana.