Category — Offshore Drilling Moratorium (2010)
“The Gulf Spill of 2010 maybe be remembered as much or more for the economic damage it did because of the Obama’s regulatory overreaction than for the environmental damage it wrought. Two wrongs do not make a right.”
Ten oil rigs have left the Gulf of Mexico since the Obama Administration imposed a moratorium on deepwater oil and gas drilling in May 2010 and others could follow soon, a detailed July 2011 report from Sen. David Vitter’s (R-La.) office shows.
The ten rigs named in the document are: Marinas, Discover Americas, Ocean Endeavor, Ocean Confidence, Stena Forth, Clyde Bourdeaux, Ensco 8503, Deep Ocean Clarion, Discover Spirit, and Amirante. The rigs have left the Gulf for locations in Egypt, Congo, French Guiana, Liberia, Nigeria and Brazil.
It gets worse.
Several of the remaining rigs could be relocating soon, according to the report. These include the Paul Romano, the Ocean Monarch and the Saratoga. Moreover, eight other rigs that were planned for the Gulf have been detoured away, Don Briggs, President of the Louisiana Oil and Gas Association (LOGA), points out.
“When you have companies that would be spending hundreds of millions of dollars, or some cases, billions of dollars, they need certainty,” Briggs explained. “We don’t have that now and I don’t expect that we will anytime soon. We will be in a deteriorating position until this changes.”
Briggs has also questioned the necessityof the moratorium that was imposed in response to the explosion of British Petroleum’s (BP) Macondo oil well on April 20 of last year. The accident resulted in the death of 11 workers and caused an estimated five million barrels of crude oil to spill into the Gulf.
The federal regulatory schemes that are now aimed against Louisiana will ultimately work to the disadvantage of industry in other parts of the country, Bonner Cohen, a senior fellow with the National Center for Public Policy Research (NCPPR), has warned. [Read more →]
August 18, 2011 17 Comments
Among the many suggestions in the draft report of the National Commission on Fiscal Responsibiity and Reform is a 15 cents-per-gallon increase in the federal gasoline tax. No doubt, this proposed tax hike would raise revenues and make a modest dent in the deficit, but it would do so at the expense of the driving public and would disproportionately burden low-income motorists.
There’s a better way. If raising energy-related revenues is the goal, why not fill federal coffers in a manner that actually reduces the price at the pump? Washington can accomplish this by allowing more oil drilling in an about face from the so-called permitorium.
The federal government controls all offshore areas beyond three miles from the coast, as well as vast expanses of energy-rich western lands. Unfortunately, only a fraction of these areas have been opened to energy leasing, due to legislative and regulatory restrictions.
For example, a 2008 Department of the Interior report notes that only eight percent of the estimated 31 billion barrels of oil beneath federal lands is fully available for leasing, while 30 percent is subject to significant restrictions and 62 percent is entirely off-limits. America’ offshore areas hold even greater potential but are also constrained. No other energy-producing nation on earth has limited itself to this extent. [Read more →]
November 17, 2010 2 Comments
Public support for tapping America’s oil reserves has been strong over the past several years, but it received its toughest test with the Deepwater Horizon spill. The verdict is now in – and it’s drill, baby, drill!
A clear majority continued to support drilling in American waters even during the height of the spill, when oil was gushing uncontrollably and dying birds headlined network newscasts. Pollsters at Rasmussen report that, “since the oil rig explosion that caused the massive oil leak, support for offshore drilling has ranged from 56 percent to 64 percent.”
That’s not far below the 72 percent who supported it before the spill, nor much different than the support back in the summer of 2008 when pump prices topped $4 a gallon. Now that the leak has been stopped, the percentage in favor should start rising again.
Support was always strongest in Louisiana—which bore the brunt of the environmental and economic damage—where 79 percent of residents remained in favor of drilling, the same as before the spill. [Read more →]
September 2, 2010 1 Comment
In his highly relevant study, Dr. Joseph R. Mason, chair of banking at the Ourso School of Business at Louisiana State University, offers a sophisticated estimate of the economic impacts of a federal moratorium on exploratory offshore oil drilling. The new moratorium, issued by the Obama administration after federal judge Martin Feldman issued an injunction banning the government from enforcing the original moratorium, freezes some 33 current exploratory drilling operations and places a six-month ban on the issuance of exploration permits by the MMS (now the Bureau of Ocean Energy Management, Regulation, and Enforcement).
Dr. Mason begins by identifying the “phases” of drilling that support local economies. Exploratory drilling and the development of offshore facilities, the extraction process, and the refining of the crude oil are all identified as impacting Gulf of Mexico economies. Additionally, those services and industries that support the offshore oil drilling sector provide jobs and economic investment in the area. Some of the service industries that Dr. Mason identifies are the chemical, platform construction, drilling services, transportation, gas processing, helicopter construction, and consumer goods industries. Also, the refining phase is likely to create an economic “spillover,” as refining capacity exists in many states outside the Gulf region.
As expected, all of these industries comprise a large section of the overall Gulf economies. In the state of Louisiana, 2005 figures estimate 15.4 percent of total household earnings could be traced back to these earnings, amounting to some $12.7 billion dollars. The moratorium will lead to a cessation of worker training, as well as job losses among those already employed in these industries. One estimate by a consulting firm places total job losses by 2014 at 120,000. Many of these job losses would be outside the “big” oil companies that have become synonymous with the area, as Gulf oil exploration was essentially pioneered by smaller energy companies. [Read more →]
August 16, 2010 3 Comments