Hofmeister: Unemployment and The High Cost Of Obama's Drilling Ban


John Hofmeister has been one of the leading critics of the Obama administration's policies curtaining oil and gas drilling.

I interviewed Hofmeister, the former President and CEO of U.S. Operations for Shell Oil and Founder and CEO of Citizens for Affordable Energy, following the announcement that the Obama administration would not allow offshore oil drilling in the eastern Gulf of Mexico or off the Atlantic and Pacific coasts as part of the next five-year drilling plan.

LL: Obama Administration has said jobs is their top priority. How many jobs will be lost with this no drilling in the Gulf?

JH: Each million barrels of production is better than one million jobs. If we were serious about job creation we'd strive to increase oil production back to where it was in the 70's at 10mbd. We're at seven. We could produce more than three million high paying high benefits jobs for blue and white collar occupations.

LL: A lot of theses jobs are high tech. Will these jobs forever be lost?

JH: Other countries are going gangbusters to produce their natural resources while we play politics with energy. The jobs will go to other nations. The world needs more oil and gas. So do we.

LL: Will this create a Depression in the South?

JH: The gulf coast is seriously harmed by the continuing moratorium. Avoiding more drilling means less economic expansion. The Administration has essentially written off the Gulf Coast for 2012, except Florida. This is election politics writ large.

LL: When I spoke with Harold Hamm of Continental Resources, he said he has about 20 thousand job opening right now and we are only importing 49 percent of our oil now. Oil drilling creates lots of jobs and it does help reduce our energy dependence. Why is this being buried?

JH: Because "we hate the oil companies" (a good read) no one listens to what they are saying about lost opportunity. There's no sympathy. It gets no real attention and instead the administration hypes "green jobs" which are scarce and will be fewer when we reduce subsidies. We're only producing one third of our oil.

LL: You were recently in East Kentucky visiting a coal facility. There are great innovations that are going on to mine coal cleanly. Can you tell me what kind of reaction you are getting from the administration?

JH: The administration is anti-hydrocarbon and using permits prohibitions and new regulations to stop or slow mining and drilling. They don't like what I'm saying at all especially when I say I'm a Democrat who fundamentally opposes the Administration's energy policy. Senator Mary Landrieu and I are on the same page.

LL: What is the most over hyped energy right now? Ethanol was billed as the alternative energy savior and it was a flop. Your car is more energy efficient if you have probably inflated tires and it created food inflation and droughts because it uses so much water.

JH: Everything green is being hyped. It's all subsidized and will crash when subsidies are reduced. VC money is already 50 percent down from 2008 because there is no payback anytime sooner or later.


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A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."