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One Year After Oil Spill Was Stopped, Drilling Permits Down Sharply

Posted By Rob Bluey On July 15, 2011 @ 7:35 am In Scribe | Comments Disabled

The Obama administration is approving deepwater drilling permits at a pace of just 1.7 per month — a dramatic drop that is jeopardizing thousands of jobs for struggling families in Louisiana and neighboring states.

The latest figures from the Bureau of Ocean Energy Management, Regulation and Enforcement also reveal a sharp reversal in permit issuance for shallow-water wells. Greater New Orleans Inc. [1] compiled the data as part of its Gulf Permit Index.

Over the past three months, deepwater permits are down 71 percent from their historical monthly average of 5.8 permits per month. Shallow-water permits, which had begun to rebound, have fallen in recent weeks by 34 percent from the historical monthly average of 7.1 permits.

One year ago today the Macondo well was finally capped after nearly three months of spewing oil in the Gulf of Mexico. Over the course of the past year, the Obama administration has issued new rules for offshore operators [2] but remains far off track on permitting. Meanwhile, Michael Bromwich, BOEMRE’s director, said this week that more regulations are on the way [3].

That’s bad news for job creators in the Gulf of Mexico.

According to a new study conducted by Quest Offshore Inc., 60,000 jobs have been lost in the Gulf Coast states since 2008 [4] — due in part to the slow economy, President Obama’s drilling moratorium and the lack of new drilling permits.

Each deepwater rig produces 700 jobs for Louisianans alone; a shallow-water rig generates 350 jobs, according to Greater New Orleans Inc. Those numbers add up in a country facing a 9.2 percent unemployment rate [5].

But it’s not just Gulf Coast states bearing the burden. The Quest Offshore study, commissioned by the National Ocean Industries Association [6] and the American Petroleum Institute [7], reveals that communities across the United States are suffering from the Obama administration’s policies as well.

An estimated 190,000 potential jobs across the country are at stake [8] unless the pace of permitting increases and bureaucratic hurdles are lifted. Those new jobs, coupled with the 240,000 jobs already supported by the Gulf offshore oil and gas industry, have the potential to contribute nearly $45 billion America’s economy by 2013.

The jobs would also bring much-needed revenue into federal coffers — particularly at a time of record budget deficits. Declining production at existing wells and bureaucratic delays on new wells in the Gulf of Mexico are costing the federal government more than $4 million per day [9] in forfeited royalty payments, lease sales and rents.


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

URL to article: http://blog.heritage.org/2011/07/15/one-year-after-oil-spill-was-stopped-government-issuing-few-drilling-permits/

URLs in this post:

[1] Greater New Orleans Inc.: http://gnoinc.org/

[2] new rules for offshore operators: http://www.doi.gov/news/pressreleases/Salazar-Announces-Regulations-to-Strengthen-Drilling-Safety-Reduce-Risk-of-Human-Error-on-Offshore-Oil-and-Gas-Operations.cfm

[3] more regulations are on the way: http://www.nola.com/politics/index.ssf/2011/07/drilling_safety_regulations_ar.html

[4] 60,000 jobs have been lost in the Gulf Coast states since 2008: http://www.noia.org/website/article.asp?id=45801

[5] 9.2 percent unemployment rate: http://www.heritage.org/Research/Reports/2011/07/Heritage-Employment-Report-June-Jobs-Wilt-in-Heat

[6] National Ocean Industries Association: http://www.noia.org/

[7] American Petroleum Institute: http://www.api.org/

[8] 190,000 potential jobs across the country are at stake: http://www.api.org/Newsroom/gulf-jobs-possible.cfm

[9] costing the federal government more than $4 million per day: http://www.ncpa.org/pub/ba743

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