This Memorial Day, Don't Forget Drilling
5/27/2011 12:01:00 AM - David Holt
As American motorists fill up their gas tanks before hitting the road this Memorial Day weekend, headline-grabbing sticker shock is sure to follow. While debate rages in our nation’s capitol and around the country about whom and what’s to blame for rising gas prices, this Friday marks the one-year anniversary of the Obama Administration’s decision to shut down all new drilling projects after the devastating oil spill in the Gulf of Mexico. Though intended to address an affront to our environmental safeguards, this drilling ban failed to take into account the impact it would have on thousands of Gulf workers and the millions of consumers nationwide that would suffer as a result.
Though the White House lifted the moratorium last November, very little has changed for the seventy percent of Americans admittedly struggling with high gas prices. This is because bureaucrats in Washington, D.C. have slowed the issuance of drilling permits to a snail’s pace, replacing what was an official moratorium with what many dubbed a permitorium. Since the end of the official drilling ban, just 14 drilling permits have been issued. For comparison, permit issuances averaged 10 per month prior to the oil spill – a decline of more than 88 percent. With many drilling projects caught in regulatory paralysis, large investments that could otherwise yield thousands of good jobs are at risk.
It’s hardly surprising, then, that the Energy Information Administration projects offshore oil production will decline 13 percent this year as a result of these policies. In a region where offshore drilling activity supports an estimated 400,000 jobs, a production decline of this magnitude results in layoffs and bankruptcies. Fourteen rigs have left the Gulf entirely and relocated abroad. Meanwhile, tourism, manufacturing and other industries struggle to stay afloat amid reduced consumer and business spending in the region.
Though the consequences of these drilling policies may feel remote for those outside the Gulf region, disruptions to Gulf production result in higher prices for every consumer that fills a gas tank, heats their home or buys an items that utilizes oil or natural gas in it manufacturing process – which includes everything from shampoo to tennis shoes to aspirin. This is because the Gulf of Mexico supplies about 30 percent of domestic oil and gas supply, so any disruption is reflected through higher prices at the gas pump. Additionally, thousands of businesses across the nation produce goods and services used in oil operations in the Gulf and the continued barriers to drilling will jeopardize jobs and economic growth in America’s heartland and in every part of our country.
Earlier this week, the House Natural Resources Committee held ahearing about the impact high gas prices are having on seniors, working families and Memorial Day vacations. Though members and panelists agreed that energy independence is the ultimate end goal, consensus was predictably elusive as to whether oil and gas drilling is what will help us get there. While drilling critics are somewhat accurate in stating that domestic production will have little immediate impact on gas prices, this omits an unwavering truth: our nation will require robust oil and gas production to meet demand for the foreseeable future. This reality should not interfere with efforts to advance alternative energies until they are cost-effective. Nor should it provide cover for a singular focus to move “off oil” entirely. But doing nothing now defies all logic. Just think about those arguments made by politicians 10 years ago about not producing more domestic oil and natural gas. That decade-old failure is why we’re in the mess we are today.
A recent Associated Press poll found that the share of seniors expressing financial hardship over gas prices hit 76 percent this month, up from 68 percent in March. While every upswing in gas prices disproportionately affects lower income households, the pain appears to be spreading across the income scale. How much more suffering will it take before all of our elected officials realize we need a comprehensive approach to our nation’s energy policy – one that recognizes that the oil and gas industry has a vital role to play. Stalling drilling permits and the jobs that go with them actually hurts millions of oil and gas workers across the country and foregoes billions in lost government revenue from energy production.
Energy consumers will continue paying nearly $4 per gallon at the gas pump while our lawmakers hold hearings, cast blame, and skirt around barriers to domestic energy production of our own making.
As we reflect this weekend on the tremendous sacrifice of those defending our country, it’s a timely reminder that nothing worth having comes easy. This is surely the case for our nation’s energy policy – it’s a fight worth having to secure an economically sound and energy secure future.