If a report in the Wall Street Journal is to be believed, energy development in The Gulf Of Mexico has staged a remarkable comeback in recent months. The Obama administration imposed a moratorium on deepwater oil and gas drilling last May in response to the BP oil rig explosion last year. The moratorium was lifted last October, but industry officials are convinced a “de-facto” moratorium remains in effect at the expense of the Gulf coast.
As the Pelican Institute for Public Policy has reported, the latest research shows that up to 20 oil rigs could be leaving the Gulf Coast, in addition to 11 that have already left, unless the feds get moving on the permitting process. It is difficult to see how this scenario translates into a recovery in the affected region. Nevertheless, this is how the WSJ report opens:
The Gulf of Mexico has staged a comeback as a source of oil for big energy companies, little more than a year after the Obama administration largely shut down drilling in the wake of the largest offshore oil spill in U.S. history…
The burst of activity comes as the government prepares to toughen its oversight of offshore drilling. On Wednesday, federal regulators probing the Deepwater Horizon disaster issued a report that recommended numerous changes.
Robert Bluey, who heads up the Heritage Foundation’s investigative journalism unit, has kept careful tabs on the regulatory policies Team Obama has aimed against the Gulf region. As Bluey has noted in his reports on the the Foundry, deepwater permits are down 71 percent from their historical monthly average of 5.8 permits per month. Shallow-water permitting have also fallen in past few weeks by 34 percent from the historical monthly average of 7.1 permits.
The WSJ report does not seem to square with reality and should be re-visted.
Bonner Cohen, a senior fellow with the National Center for Public Policy Research (NCPPR), has commented on economic fallout associated with the depleted rig fleet in the Gulf.
“Each rig that leaves the Gulf of Mexico taxes jobs and energy away from the U.S. and sends them overseas,” he observed. “The White House now wants Congress to pass a so-called jobs bill, when its own policies systemically destroy jobs. What’s more, the oil and gas in the Gulf region are real energy, not the phony energy of Solyndra, the solar-panel manufacturer and the recipient of a $535 million taxpayer-funded loan guarantee that went belly-up last week.”
Meanwhile, Sen. David Vitter (R-LA) has sent a letter to administration officials asking them to come clean the slow pace of drilling permits. He has also introduced a bill to audit federal subsidies for green jobs.