Mar
22
2017

Clark: Gulf of Mexico Energy Critical to Alabama Manufacturers, Economy

The following guest blog is provided by George Clark, President of Manufacture Alabama, the only trade association in the state dedicated exclusively to the competitive, legislative, regulatory and operational interests and needs of manufacturers and their partner industries and businesses.  A PACE partner, Manufacture Alabama works to create a business and political climate that promotes a positive, competitive environment and enhances the opportunity for growth of all Alabama manufacturers.

As Alabama’s voice for manufacturing and industry, Manufacture Alabama fully recognizes the critical importance of affordable and reliable energy.  Manufacture Alabama member companies are among both the largest producers of energy in the state and the largest consumers of energy in the state.

Given that these same companies also support thousands of high-paying careers, it is easy to understand that energy development is key to supporting Alabama’s economy and job base.  In Alabama, the Gulf of Mexico plays an especially vital role.

Consider that in Fiscal Year 2014, Gulf of Mexico oil and gas activity generated an average 1.35 million barrels of crude oil per day and supported 18,000 jobs and $1.5 billion in GDP for Alabama alone.  Furthermore, it is estimated that opening access to the Eastern Gulf of Mexico could produce additional benefits for Alabama in the form of 21,000 new jobs, $1.7 billion annually for the state’s economy, and over $3.5 billion in state government revenue.  This is also estimated to produce enough resources to replace nearly 60% of our daily crude oil and petroleum product imports from the Persian Gulf.

While a select few have been calling on the federal government to shut down access to the Gulf of Mexico and keep the Gulf’s resources locked under the seabed forever, Alabamians understand the foolhardy nature of such shortsighted rhetoric.

The Gulf of Mexico is a critical backbone to the health and well-being of Alabama, the Gulf Coast region, and the nation as a whole.  Indeed, energy development in the Gulf benefits our economic, employment, and national security, while helping to protect our environment as well.

For example, prior to finalizing a 2017-2022 oil and natural gas leasing program – which includes the Central and Western Gulf but excludes the majority of the Eastern Gulf still under congressional moratorium –  President Obama’s Interior Department concluded that removing the entire Gulf of Mexico from the leasing program would result in billions of dollars in environmental and social costs as production substitutes are brought in from other sources and countries.  It also found that the United States would have to rely on imports to replace almost 60% of the lost production.

To make Alabama the best business location in the U.S. for manufacturers, it is important to have federal policies in place that will facilitate stable and affordable supplies of energy.  That is why, as the Alabama Legislature works its way through the home stretch of the 2017 Regular Session, Manufacture Alabama is supporting efforts to secure a resolution urging the federal government to provide for continued and expanded access to the Gulf of Mexico.

Given the important role of offshore oil and natural gas revenues in securing a strong coastline and safeguarding the state’s infrastructure, it is also why we are calling on the Legislature to support congressional action to lift the annual cap on federal offshore revenue sharing that is currently in place for Alabama and the Gulf Coast states to our west.

With the right business and policy climate in place, there is no limit to what manufacturers and all businesses and residents in Alabama can achieve.  For that reason, Manufacture Alabama is proud to support a federal energy policy that includes the Gulf of Mexico and access to the full range of its benefits for generations to come.