Although Congress lifted the ban on deepwater drilling in October and drillers are eager to return to work, the government still has not issued any permits. And the news is unlikely to improve much next year. CNNMoney reports:
Even if a few permits come through, analysts say it will be a far cry from the amount issued pre-spill. “We’re not holding our breath for a return to business as usual,” Whitney Stanco, and energy analyst at the Washington Research Group, wrote in a recent research note. “Despite pressure from Gulf state lawmakers and the oil and gas industry, we believe permitting in 2011 will likely be slower than it has been in recent years.”
The moratorium did not affect current oil production in the deepwater Gulf of Mexico, which comes from wells that have already been drilled. Currently, about a quarter of the nation’s five-million-barrel-a-day crude output comes from the deepwater Gulf, according to the Government’s Energy Information Administration. But future output could fall if new wells aren’t drilled. EIA predicts U.S. output will drop by about 170,000 barrels a day in 2011 thanks to the ban.
Part of the problem for the oil companies was figuring out the complexities and intricacies of the new rules, but now drilling requests are increasing, reports the International Energy Agency. A newly released report says, “Oil companies are queuing up to submit requests to recommence drilling, including many of those previously active in the area. Companies remain keen to work in the Gulf of Mexico, seeing it as one of the more profitable regions accessible to them.”
Seven experts from National Academy of Engineering recommended that a blanket moratorium was not the answer, would not significantly reduce the risks of offshore drilling, and would punish the innocent. The ban went forward anyway, punishing deepwater and shallow water drillers. Just two days ago, Politico broke a story in which the Department of Interior inspector general says that the White House re-wrote sections of a report to make it appear that an independent panel of experts supported the drilling moratorium.
The permitorium is causing businesses and families to unnecessarily struggle when job creation is at a premium. With regards to drilling, businesses want to create jobs without money from the taxpayer, yet the government is dragging its feet issuing permits, and the dragging will continue throughout 2011.
It’s sad (but not unexpected) for an Administration so keen on bringing objectiveness and transparency to Washington to fall victim to political pressures.