The White House announced today that the Department of Interior will be lifting the ban on off-shore oil drilling. This is good news. The Bureau of Ocean Energy Management, Regulation and Enforcement Michael Bromwich had estimated that the ban cost the region more than 20,000 jobs. Unfortunately, the Obama administration is leaving costly new job killing regulations in its place. Greenwire reports:
The Obama administration is acknowledging that its new offshore drilling safety regulations will raise costs for the oil and gas industry — and may also delay some offshore development, slightly increase gas prices and kill some jobs.
The new rules unveiled last week would increase operating costs by an estimated $1.42 million for each new deepwater well drilled with a floating rig, $170,000 for each new deepwater well drilled with a platform rig and $90,000 for each new shallow-water well, according to an Interior Department notice released yesterday.
Interior Secretary Ken Salazar says the increased costs are worth it because it will reduce the risk of a new oil spill. But Secretary Salazar failed to identify how much risk the new regulations would reduce. How can the cost justify the risk if they don’t even know what the risk is?
For a better solution to oil spill liability, click here.