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No Drilling, No Jobs, No Money

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Unread 09.29.11, 12:20 PM
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No Drilling, No Jobs, No Money

On 09.29.11 07:54 AM posted by Nicolas Loris

The Obama Administration lifted the moratorium on new permits and drilling in the Gulf of Mexico, but the same problem persists as it has for over a year now. There’s not a whole lot going on down there.

ODS-Petrodata Weekly Rig Count keeps tabs on rigs under contract and rigs without contracts in different regions of the world. It also shows the utilization rate for offshore platform drilling rigs. Here are the numbers.
  • U.S.: 44 percent,
  • Europe/Mediterranean: 97 percent,
  • Worldwide: 83 percent.
The fleet utilization rate for the U.S. Gulf of Mexico for the week of September 23 was 51.7 percent. This is dramatically lower than other areas of the globe: South America: 80.5 percent; Europe/Mediterranean Sea: 87.9 percent; West Africa: 77.8 percent; Middle East: 80.5 percent; Asia/Australia: 82.1 percent.

A large part of the problem is the complexity of the new regulations and the lack of resources at the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) to handle these new complexities. The solution, however, is not more bureaucrats but a more efficient system that promotes safety, assigns full liability to oil and gas activities, protects the taxpayer, and allows offshore gas and oil exploration to continue. The system in place now is preventing people in the Gulf from getting back to work.

Not only is the anti-drilling agenda costing jobs and economic hardship in the Gulf region, but it’s preventing billions of dollars from coming into the federal government’s coffers because of decreased royalties, lease sales, and rent fees. Yesterday, Senator David Vitter (R–LA) wrote to Interior Secretary Ken Salazar and BOEMRE director Michael Bromwich urging the need for more action in the Gulf:

We would like to bring to your attention the steep decrease in revenue from bonus bids that result from zero Outer Continental Shelf lease sales in FY2011. In FY2008, revenue from bonus bids on offshore leases was approximately $10 billion. For FY2011, the amount is $0.

Our country faces a severe fiscal crisis as well as significant economic challenges related to private industry job creation. Revenue cannot be generated from lease sales that do not occur, and jobs cannot be created on leases that private industry cannot acquire.

Increasing access to our domestic energy would help lower energy prices, create jobs, and bring revenue into the financially strapped government. Federal regulators should work to return permits to pre-moratorium levels, and Congress should completely open America’s coasts for exploration and drilling and move forward with federal offshore leasing.

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