David Holt

Today marks the one-year anniversary of the official end to the administration’s deepwater drilling moratorium in the Gulf of Mexico, a milestone the House Natural Resources Committee is appropriately marking with a hearing on the continued reverberations of that decision.

The fact that the moratorium ended 12 months ago should mean drilling in the Gulf region and the jobs and income that go along with it are all back to normal levels. Far from it. Although the Interior Department has significantly beefed up the OCS regulatory regime in order to ensure that any activity in the Gulf will be done safely, it has unfortunately instituted a slower than expected permitting pace which has resulted in a 37 percent decrease in the number of operating drilling rigs in the Gulf. As of last month, three rigs are idle, and another 11 have left the region altogether since May 2010. Of those that departed (primarily to African countries with less favorable regulatory environmental safeguards), only three have returned since the moratorium was lifted. That means a loss in potential spending of $6.3 billion and a loss in direct employment of 11,500 jobs in just two years.

Earlier this month the Administration dusted off its “Gulf-drilling-has-returned-to-normal” talking points, which it has trotted out several times in the past 17 months. The Bureau of Ocean Energy Management Regulation and Enforcement (split this month into the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement) argued that a good deal of the slow-down in permitting for these rigs is due to “flawed” applications from rig operators. The agency also said that counting old, recently reissued permits brings the rate of permitting for new wells in the Gulf up. But who’s counting old permits? Not the rig workers who depend on the industry for their livelihoods. As Sen. David Vitter, Louisiana Republican said recently, “Revenue cannot be generated from sales that do not happen, and jobs cannot be created on leases that private industry cannot acquire.”


David Holt

David Holt is President of the Consumer Energy Alliance.