The Oil Drilling Moratorium Doesn’t End Till the Permits Begin
Posted October 13th, 2010 at 9:22am
The White House got the headlines they wanted today. The Washington Post: U.S Lifts Ban on Deep-Water Drilling. The Los Angeles Times: U.S. Lifts Moratorium on Deep-Water Drilling in Gulf of Mexico. The New York Times: White House Lifts Ban on Deepwater Drilling. Interior Secretary Ken Salazar told reporters on a conference call yesterday: “We are open for business.” Don’t believe the White House or Salazar for a second. While yesterday’s announcement does remove one legal barrier to the resumption of energy investment in the Gulf, the Obama administration still retains full discretion over whether or not any new permits will be issued. And all indications are that those new permits will not be coming any time soon.
Since President Barack Obama first banned drilling for gas and oil in the Gulf in May, about 36 rigs in the Gulf of Mexico have been put out of work, five rigs have left for Egypt and other parts of Africa, and 12,000 jobs have been lost. If the ban stays in place, the long-term and indirect economic losses will cost more than 175,000 jobs. The problem with President Obama’s new drilling policy, as with all of his economic policies, is the uncertainty it inflicts on our nation’s job creators. Louisiana State University professor Joseph Mason tells The Christian Science Monitor that “uncertain policy decisions” are making it difficult for rig operators to plan for the future. Referring to the rig operators, Mason continued, “and when they can’t plan around it, they move.” And by “move” Mason means taking jobs and energy overseas. Sen. Mary Landrieu (D-LA) echoed this verdict:
Today’s decision is a good start, but it must be accompanied by an action plan to get the entire industry in the Gulf of Mexico back to work. This means that the administration must continue to accelerate the granting of permits in shallow and deep water, and provide greater certainty about the rules and regulations industry must meet.
As Sen. Landrieu’s statement alludes to, President Obama’s legal ban on deepwater projects has also meant a de facto ban on all energy investment in the Gulf. Since the April 20 Deepwater Horizon spill, Interior has issued only 10% of shallow water permits that they normally do. Institute for Energy Research senior vice president Dan Kish tells Politico: “I don’t know what business can run at 10 percent of what it normally does.” Pressed for details on when Interior will actually start issuing new permits, Bureau of Ocean Energy Management Regulation and Enforcement director Michael Bromwich told reporters: “It will clearly not be tomorrow and it will not be next week. My sense is we will have permits approved by the end of the year, but how much before the end of the year I can’t say and how many before the end of the year I can’t say.”
Energy companies who want to wait for the Obama administration to allow oil and gas investment to begin again do so at their own peril. As The Washington Post details today, White House policy on drilling in the Gulf is driven by politics, not science. And the President’s political views on domestic oil and gas development are clear. In 2004, then-Senate candidate Obama told the League of Conservation Voters: “I believe that existing policies are imbalanced in favor of new and increased [oil and gas] extraction. . . . Reduced energy demand would eliminate the need for new production on federal public lands, and I would oppose such production in any event.”So there you have it. President Obama’s preferred policy is reduced energy demand, and even if he can’t accomplish that, he still would oppose the development of our country’s energy resources. Ken Tanguis of Houma, Louisiana, had been a mechanic for Diamond Offshore Drilling for most of his life. But since President Obama instituted his drilling ban, Diamond has laid off more than 300 workers, and now Tanguis only works three weeks on and three weeks off. Tanguis told NPR: “I don’t want a handout from the government. I don’t want a handout from BP. I don’t want anything. I just want to go back to work. I want to go back to drilling.” The only thing standing between Tanguis and a job is President Obama’s de facto drilling ban. We hope the President allows Ken to go back to work soon.http://blog.heritage.org/2010/10/13...=Morning%2BBell