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Offshore Drilling and the Federal Deficit

Posted By Matthew McKillip On February 9, 2011 @ 8:00 am In Energy | Comments Disabled

For all the talk about job creation and deficit reduction [1], the Obama administration continues to ignore one solution to accomplish both: offshore oil drilling.

As the de facto drilling moratorium continues to shackle the Gulf coast region [2], Sen. David Vitter (R-LA) is determined to hold the administration accountable for what is more than just a regional issue.

The day after President Obama’s Interior Department was held in contempt of court [3] for refusing to lift the moratorium, Vitter wrote to David Hayes, deputy secretary at the Interior Department, demanding that he properly assess the financial damage [4] caused by the moratorium and the liability of the federal government.

“The administration’s energy policy has clearly stifled Louisiana’s coastal economy, and now all American taxpayers could seriously pay the price by having to foot the bill for breach of contracts caused directly by the Interior Department’s actions,” Vitter said. “The Obama administration has made a real mess of the permitting process, and companies can’t just keep waiting around for Interior to meet their contractual obligations. And quite frankly, it’s hard to blame them for suing.”

The lack of drilling increases the deficit and the burden on taxpayers in two ways: First, the refusal to grant drilling permits is costing the government revenue [5] through royalties from oil companies. Secondly, a more recent development, the breach of contract with private companies, could force the federal government to dole out large quantities of taxpayer money to pay for damages.

The longer the administration is silent on its de facto moratorium, the more drastic the financial repercussions will be. Vitter fears jobs and the financial health of the Gulf will continue to dwindle and suffer without action soon.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2011/02/09/offshore-drilling-and-the-federal-deficit/

URLs in this post:

[1] deficit reduction: http://heritage.org/Issues/Budget-and-Spending/Deficits

[2] de facto drilling moratorium continues to shackle the Gulf coast region: http://www.foundry.org/2011/02/04/permitorium-103-gulf-of-mexico-drilling-plans-await-government-approval/

[3] President Obama’s Interior Department was held in contempt of court: http://www.foundry.org/2011/02/03/mr-president-youre-in-contempt/

[4] demanding that he properly assess the financial damage: http://vitter.senate.gov/public/index.cfm?FuseAction=PressRoom.PressReleases&ContentRecord_id=ed7d7247-c5bc-a4fd-9f9f-1b809f49a379

[5] refusal to grant drilling permits is costing the government revenue: http://washingtonexaminer.com/opinion/op-eds/2011/01/rob-bluey-shore-drilling-bans-delays-cost-government-revenue

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