By Jim Adams
How could a bureaucratic bottleneck in the Gulf of Mexico cost the U.S. economy nearly $20 billion and wipe out hundreds of thousands of jobs as far away as Ohio, Pennsylvania and California? Unfortunately, with this White House administration, anything is possible.
President Obama recently announced yet another jobs initiative — knowing all the while that one very simple action on his part would indeed create new jobs, infuse federal and state budgets with billions of dollars, and make us less reliant on imports. But that didn’t happen.
On Oct. 12, 2010, Interior Secretary Ken Salazar said, “We’re open for business,” signaling that drilling for new oil in the Gulf of Mexico would resume. But, Mr. Salazar has an odd interpretation of the words “open for business.”
Eleven months after the Secretary’s announcement, drilling in the Gulf remains near a standstill. The government has used every stall tactic imaginable to delay permits and other administrative approvals that would help our economy and put hundreds of thousands back to work.
The Gulf Economic Survival Team (GEST) commissioned IHS Global Insight and IHS CERA Inc. to quantify the economic impacts of the government’s slow pace of permitting since lifting the moratorium. Their study revealed that the number of exploration plans and permit applications are on par with levels in 2009 through early 2010, clearly signaling the industry’s intent to return to full operations. Industry also has invested billions of dollars in well containment technology to stop a Macondo-size spill if it ever became necessary. So safety can no longer be blamed for permitting delays.
That leaves the Department of the Interior. The IHS study points to a backlog of project approvals. Despite their earnest efforts to process the growing stack of applications, regulators on the front line don’t appear to understand the new regulations that Washington D.C. has foisted upon them. The blame for this falls squarely on the shoulders of this Administration’s politically appointed bureaucrats, who know nothing of the complexities involved in safe and environmentally sound deepwater drilling. Naturally, they don’t let expertise or experience get in the way, they just pile on more regulations.
This politically minded bureaucracy comes at tremendous cost.
The number of people who depend on a thriving oil and gas industry is staggering. Another research study, by Quest Offshore Resources, found that energy production in the Gulf of Mexico employed 240,000 Americans in 2010. And not all of them worked directly for the oil and natural gas industry, as oil rigs need everything from steel pipes to IT support.
What’s more, the effects of the government’s continued foot-dragging isn’t limited to the Gulf. The study’s authors found that for every industry job tied to operations in the Gulf, three non-industry jobs are reliant in sectors such as manufacturing, construction and real estate. And for every three Gulf Coast workers, there’s one American employed elsewhere — in New York, Michigan, California, Oklahoma, Colorado, Pennsylvania, Ohio, Illinois and nearly every other state.
The Quest study also came to a distressing conclusion: Had the Administration truly lifted the moratorium last October, the industry would have created nearly 190,000 more jobs in the U.S. over a three-year period. That would have meant 8,500 additional jobs in California, where unemployment currently flirts with 12 percent; 10,000 more jobs in Pennsylvania and Ohio, manufacturing-dependent states; and in the President’s home state of Illinois, a total of 3,000 jobs.
Keeping Americans out of work. Denying struggling state and local governments billions of dollars in additional revenue. Making us more dependent on energy imports. Is this the change Mr. Obama says we can believe in?
Or can we only believe in shovel-ready jobs if they’re created by the alternative energy industry? Would we even be having this yearlong debate if solar energy producers contributed more than $12 billion a year in tax and royalty revenues to state and federal treasuries? What if hydro energy producers accounted for $44 billion of GDP? The only thing separating 190,000 Americans from a paycheck and states from more than $7 billion in local taxes is obvious: Political will.
President Obama talks about job growth, stimulating the economy and investing in innovation that will lead the way forward, but turns a blind eye to an obvious, if not practical, solution. Mr President: Lift your de facto moratorium on energy exploration in the Gulf of Mexico; business will safely do the rest.
Jim Adams is president and CEO of Offshore Marine Service Association, which represents the owners and operators of U.S. flag offshore service vessels and the shipyards and other businesses that support that industry.
- Collateral Damage: Lost Gulf Rigs from Obama Obstructionism (10 down, more to go?) (mb50.wordpress.com)
- Is Mexican Gulf Energy Production Recovering? (mb50.wordpress.com)
- Bernard L. Weinstein: US energy resources worth the investment (mb50.wordpress.com)
- Shell Perdido: The first full field subsea separation and pumping system in the Gulf of Mexico. (video) (mb50.wordpress.com)
- USA: Chevron Strikes Oil in Deepwater Gulf of Mexico (mb50.wordpress.com)
- Louisiana Remains on the Receiving End of Washington D.C.’s Worst Regulations (mb50.wordpress.com)
- Family firm still struggling, 18 months after Gulf oil spill (mb50.wordpress.com)
- Obama Doesn’t Care About Creating Jobs (mb50.wordpress.com)
- Rigged For Failure (mb50.wordpress.com)
- Push for permits in Gulf of Mexico (mb50.wordpress.com)
Federal Court’s Summary Judgment Compels Obama Administration to Act on Deepwater Drilling Permits (…Again)
Posted by: Jim Adams on Tuesday May 10, 2011, 16:34
“Although the government has begun to issue some permit applications, plainly because of this lawsuit, the future of drilling in the Gulf of Mexico remains elusive; plaintiffs’ other long-pending permit applications speak loudly to this,” Judge Feldman wrote in his ruling. “Moreover, the government’s conduct of delay in deepwater drilling in the Gulf dramatically presents far more than the mere possibility of persistent and repetitious intentional delays in processing . . . permit applications.”
The judge added: “The government has presented no credible assurances that the permitting process will return to one marked by predictability and certainty. Processing a scant few applications is at best a tactical ploy in a real world setting.”
We could not have said it better. For months, the Obama administration has aggressively dug in its heels to maintain its de facto moratorium on oil drilling. We’ve only seen the administration move – reluctantly – when shoved.
Fortunately, there are some leaders willing to give the administration a firm push. Today, the House is voting on H.R. 1229, which would require the Interior Secretary to decide on a drilling permit within 30 days of receiving an application.
Clearly, a lot of folks think the Obama administration needs a kick in the pants – whether in the form of a court order or an act of Congress — to do its job.
Americans don’t expect government to solve our problems. But we do hope our government won’t be the cause of our problems. Right now, the Obama administration is not only causing problems – unemployment, higher gas prices, more dependence on foreign oil – but it’s standing in the way of a solution.
It’s time that Gulf workers got back to work exploring for domestic oil. Americans want it, Congressional leaders are demanding it, and a federal judge has ordered it. What more does the Obama administration need to do its job?
Jim Adams is the President of the Offshore Marine Service Association. OMSA represents the owners and operators of U.S. flag offshore service vessels and the shipyards and other businesses that support that industry.
by: Amanda Carey
Earlier this week, Michael Bromwich, Director of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) lashed out at critics of his agency’s dealings with offshore drilling permits since the BP oil spill last year.
It was during a speech at the Center for Strategic and International Studies, and Bromwich was quite put out. “What was destructive, corrosive and not done in good faith was the sniping from certain public officials and industry trade associations,” he said.
“They claimed, and some continue to assert, that we had imposed a ‘de facto’ moratorium or created a ‘permitorium’ that was blocking the issuance of drilling permits,” Bromwich continued. “Not because the applications had failed to meet all the requirements, which was the fact, but supposedly because we had made politically motivated decisions not to issue them. That could not have been further from the truth, but it was repeated often enough that people who should have known better came to believe it.”
In mid-February, the first Gulf of Mexico drilling company declared bankruptcy. And according to the Texas-based Seahawk Drilling’s CEO Randy Stilley, the decision to file for Chapter 11 came after the company’s revenue stream had “been adversely affected by the dramatic slowdown in the issuing of shallow-water permits in the U.S. Gulf of Mexico following the Macondo well blowout.”
At the behest of a bipartisan group of lawmakers and fed-up industry officials, BOEMRE and the Department of Interior issued the first permit for deepwater drilling in the Gulf of Mexico on March 1. Since then, then agency has issued a handful of permits for drilling in the Gulf.
But one industry official isn’t taking Bromwich’s rebuke sitting down. In a statement, Jim Adams, President and CEO of Offshore Marine Service Association, slammed the director, saying “Bromwich should spend less time trying to silence public criticism and more time actually approving drilling permit.”
Adams then asserted that Bromwich should “get his story straight,” noting that Bromwich says permits are not being delayed, but also claims Congress has not provided the sufficient funds the department needs to approve the permits.
“The bureaucratic double-talk would be laughable if thousands of Gulf workers weren’t sitting idle, or if Americans weren’t paying $4 a gallon for gasoline,” said Adams. “There’s a way Bromwich could stop the criticism that seems to bother him so much. He could simply do his job.”