BP/Deepwater Horizon spill one year later: the downward spiral on drilling

First a moment of silence for the 11 people who lost their lives.

As we approach the one-year anniversary of the oil spill in the Gulf of Mexico, America’s energy security is in no better shape than it was last April.  The President continues to look abroad for solutions, telling Brazil that the U.S. wants to invest in their energy industry and saying nothing as Cuba prepares to drill in the same Gulf of Mexico he forbids U.S. companies to access.  The Administration has set noble energy goals, but its decisions to regulate, delay and shut down domestic drilling is far from appropriate under these circumstances.  While no part of the country is immune from this self-imposed energy freeze, the Gulf of Mexico region has borne most of the brunt from these missteps.  Here are some facts to keep in mind.

The President often speaks of his concern for those affected by the Gulf oil spill, but his drilling and permitting shutdowns have added economic catastrophe to ecological disaster.

• Even by 2035, oil and natural gas still will account for 57 percent of U.S. energy consumption. Resuming work in the Gulf of Mexico is essential in meeting that demand, as independent experts project that GOM deepwater oil production will account for 30 percent of total US production and nearly 95 percent of offshore production by 2020.
• According to the Energy Information Administration, domestic oil production will fall 240,000 barrels/day through 2012, mainly due to the continued energy freeze in the Gulf. Even a one-year delay in development increases potential losses to government revenue by an estimated $5.5 billion and a two-year delay increases that figure to $8.9 billion, (page 4) squeezing local, state and federal budgets dry.
• A drilling and permitting freeze in the Gulf threatens to force us to import an extra 88 million barrels of oil each year, at a cost of at least $8 billion.

No one wishes to see another Deepwater Horizon tragedy, which is why the industry and government have developed two new containment and well intervention systems available for all companies operating in the Gulf.

• Several months ago, BOEMRE Director Bromwich said, “The most critical missing piece in the process of approving applications for permits to drill in deep-water is the demonstration of well control and subsea containment capability.” The industry now has supplied that missing piece, times two.
• The Marine Well Containment System (MWCS) and the Helix system are industry-supplied, mutually supportive systems that meet government requirements for well control and subsea containment and provide a significant ability in the Gulf to respond to and contain a major spill quickly.
• William Reilly, co-chair of the presidential BP commission recently described his reaction to the creation of containment options and the rapid response systems now in place: “From where I sit, the major obstacles to drill have been removed” [emphasis mine]. He emphasized his belief that it was safe to resume drilling in the Gulf of Mexico, that the industry and government have both made great strides, and expressed optimism that the industry is working toward creating a safer environment for offshore drilling.

The oil and gas industry supplies good, high-paying jobs for Americans, particularly for Gulf residents who have been ravaged by a series of natural disasters.

• The average drill rig in the GOM employs 230 direct workers (page 5).  Each rig also provides jobs for an average of 920 indirect support workers and:
• An estimated 38,000 off- and on-shore jobs are at risk as a result of the “energy freeze,” with a potential 120,000 jobs threatened by 2014 if drilling does not resume.

While it’s encouraging that BOEMRE appears to be moving ahead with a handful of permits, a significant backlog of permitting requests remains, and there are concerns with BOEMRE’s readiness to process all of the applications and plans expeditiously.

We had better start drilling now because:

• We are going to need 30-40 new permits each month just to keep up.

Each week’s delay can snowball into months or years given the large capital, human, and technical resource requirements of these projects.  At least thirteen rigs that operated in the Gulf have been relocated overseas or mothballed for various periods while waiting for work in the Gulf.

Below is a map of how our off-shore drilling looked when Obama took office:

Below is a map of what our off-shore drilling looks like since Obama placed the moratorium:

Quite a remarkable difference.

Obama’s misleading “spin” on our energy situation

• Despite Obama taking “credit” for increased oil production from 2008 to 2010, it was actually the policies of Clinton and GWB which accounted for the increase.
• In 1995 4,528 oil and gas leases were issued, in 2010 it dropped to 1,308.
• Take a look at this eye-popping chart prepared by the Energy Information Administration (EIA) and their prediction of oil and liquid fuels production in 2011 and 2012:

Chevron’s CEO John Watson (h/t Mike Devine) sums all this up very well:

Mr. Watson blames the “cultural aspects and behavioral aspects” of the particular drilling rig that exploded. He roundly disagrees with the finding of Mr. Obama’s spill commission that the “root causes” of the spill were “systemic” to the industry. “There is no evidence to support that. I don’t know how that conclusion was reached. I know the industry has drilled 14,000 deep water wells without having this sort of problem.”  As for the moratorium, “I can understand taking a pause. I can’t understand shutting down a whole industry for a better part of a year” [emphasis mine].

I’ll leave everyone with this little exchange between Salazar and Mitch McConnell on the Senate floor:

Remember: energy security means economic security which means national security. And yes Mr. Obama. I’ve said this many times, how is WIND going to power the Obamamobile? Ramirez knocks it out of the ball park with this one.

Related articles:

Hot Air Alert: When Dem rhetoric and reality collide.

Obama wants to cut foreign oil dependency by 1/3 but without using US fossil fuels

The “pay more for gasoline” president.

House Republicans announce “drill here, drill now” initiative

House passes 3 bills to increase energy production

Salazar in contempt of civil court for refusal to lift drill moratorium

Guess who’s back in the Gulf? Obama’s “evil” BP.

Green jobs are “fruit of the poison tree.”

Crossposted at Unified Patriots