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Lack of Offshore Drilling Lease Sales Makes America?s Debt Problem Worse

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Unread 10.11.11, 01:55 PM
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Lack of Offshore Drilling Lease Sales Makes America?s Debt Problem Worse

On 10.11.11 12:53 PM posted by Rob Bluey




Offshore oil and gas leases produced $10 billion in federal revenue only a few years ago. Today that number is zero, a consequence of the Obama administration’s reaction to last year’s Gulf of Mexico oil spill and the resulting moratorium on production in the region.

Sen. David Vitter (R-LA) says it’s a huge mistake for the federal government to forgo the money — and the jobs that result from the offshore leases. Writing for Roll Call today, Vitter outlines the extent of the problem:
Revenue canít be generated from lease sales that donít happen, and jobs canít be created on leases that private industry canít acquire. Weíre in a severe fiscal crisis and weíre facing significant economic challenges related to job creation, yet the administration continues to neglect our offshore resources. …

Not surprisingly, the financial scope of these bad policies reaches far beyond Washington, D.C. Under the Gulf of Mexico Energy Security Act, energy-producing states along the Gulf Coast receive a share of revenues from certain lease sales. But if there are no lease sales, then there are no revenues. This puts further strain on states that are already struggling to make ends meet.

Earlier this year, Heritage and the National Center for Policy Analysis documented the anticipated loss of revenue from the lack of lease sales. The decline in new drilling permits also means less money from royalty payments by oil and gas companies.

Heritage’s Nick Loris notes that increased production onshore and offshore would result in millions of jobs, an abundance of energy and much-needed revenue to cut into the debt.

“Allowing access for exploration and creating an efficient regulatory process that allows energy projects to move forward in a timely manner will not only increase revenue through more royalties, leases, and rent; it will also create jobs and help lower energy prices in the process,” Loris writes. “These are sensible policy ideas with or without a debt crisis, but given the fiscal situation, this is a no-brainer.”

Vitter, along with Rep. Jeff Landry (R-LA), met with Bureau of Safety and Environmental Enforcement Director Michael Bromwich today. The meeting didn’t result in much progress, however. Vitter bemoaned that the Obama officials offered “the same old company line.”

In an effort to increase the pace of permitting in the Gulf, Vitter vowed to continue blocking Rebecca Wodder’s confirmation to serve as assistant secretary for Fish and Wildlife and Parks for the Department of Interior. Vitter wants to the agency to approve hundreds of drilling leases that will expire this year.



http://blog.heritage.org/2011/10/11/...problem-worse/
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