Don’t hold your breath on faster permitting
Posted by mb50
It’s become a familiar refrain in the oil patch: the federal government could kick-start the country’s job machine by resuming offshore drilling permits to a pre-Macondo level.
A letter from American Petroleum Institute President Jack Gerard written last week implores President Obama to remember the Wood Mackenzie study API sponsored that says the oil and gas industry can create one million jobs in the next seven years and 1.4 million additional jobs by 2030.
And another a letter this week from a number of other industry groups points to another industry study that says 230,000 new or retained jobs, more than $44 billion in U.S. GDP and nearly $12 billion in tax and royalty revenues could be generated in 2012 if permitting returned to the same levels as before the Deepwater Horizon Accident.
Many in the industry (and many readers of this blog) assume the slowdown is part of a concerted effort of the White House to punish the oil and gas business. The arguments range from the administration punishing the largely Red State industry for failing to support it to kowtowing to unions and environmental groups.
Not all industry execs aren’t subscribing to the grudge-against-the-oil-industry answer on the permitting, however.
Chevron CEO John Watson also said earlier this week that he felt the Bureau of Ocean Energy Management, Regulation and Enforcement was “working very hard to process the permit applications they have,” but that the agency needs more staff to step up the pace, especially in light of new regulations imposed since the Gulf spill.
“Whether they have the resources to do it is another matter,” Watson said. “Whether there’s political overtones elsewhere, that’s for others to judge.”
But as far as the hope of getting back to pre-spill permitting levels, the industry shouldn’t hold its breath.
“There are many more hoops and a lot more verification the government is requiring of itself and of us,” said Gary Luquette, president of Chevron North America Exploration and Production Co., said in an interview with the Chronicle earlier this week. ”This is a much more intensive process now, so we won’t go back to the time lines of the past.”
The biggest reason for the slower pace is that waivers on a number of environmental impact studies that allowed companies to skip them pre-Macondo have been reinstated.
The pace today is certainly better than it was right when the drilling moratorium was lifted, Luquette said, and even better than it was just last month.
“There’s a need for continuous improvement and they seem to be committed to that,” he said.
BOEMRE chief Michael Bromwich said there’s no doubt the pace of permitting is way off from before Macondo.
“But that’s largely irrelevant because it misses the sea change that’s occurred over the last 15 months, with the more rigorous requirements,” Bromwich said during the same hearings where Watson spoke.
Bromwich also repeated his refrain that there’s no deliberate attempt to stifle the industry.
“There’s absolutely no evidence that anyone in the agency up through and including me has made any effort to slow things down,” Bromwich said. ” I do appreciate [Watson] saying that there is no deliberate slowdown. It’s actually fully consistent with what we’ve been hearing behind closed doors from top company executives for months. And it’s nice that one of the ceos has come out and said so publicly. I don’t think it would hurt the others to say the same thing because I think they realize there’s no agenda to slow things down.”
- Chevron CEO: Backlog of offshore drilling permits is slowing US economy, offers solution… (gcaptain.com)
- Collateral Damage: Lost Gulf Rigs from Obama Obstructionism (10 down, more to go?) (mb50.wordpress.com)
- Push for permits in Gulf of Mexico (mb50.wordpress.com)
Posted on September 9, 2011, in Drilling, Gulf of Mexico, North America, Oil & Gas - offshore, Regulation and tagged Barack Obama, BOEMRE, Bureau of Ocean Energy Management Regulation and Enforcement, Deepwater drilling, Drilling, E&P, Jack Gerard, Michael R. Bromwich, Newsletter, North America, Oil & Gas - offshore, Regulation, United States. Bookmark the permalink. 2 Comments.