As gas prices continue to climb — reaching as high as $5.75 to $6.03 a gallon in some places — the Department of the Interior remains stingy with deepwater drilling permits.
Since February 2011, the administration has issued an average of just 1.3 deepwater permits per month — a 78 percent monthly reduction from the historical monthly average of 5.8 permits a month, according to the latest Gulf Permit Index from Greater New Orleans Inc.
The slow pace of permitting will likely eventually result in production declines — and that decrease in supply is unlikely to mitigate high gas prices.
Fortunately, for the first time in more than a year, the Interior Department has issued more shallow-water permits a month than the historical monthly average. For each of the past three months, the department has issued an average of 7.7 shallow-water permits — an increase from the historical monthly average of 7.1 permits per month.
The Gulf Permit Index serves as a useful barometer of the number of permits issued — but it cannot measure the number of permit applications the Interior Department has rejected. Anecdotal evidence from the Gulf suggests government bureaucrats sometimes return permit applications to applicants for minor revisions before they even accept the applications for official consideration.
Frustration with the ongoing de facto deepwater drilling moratorium continues to mount among those who see a connection among the pace of permitting, production, gas prices and national security. Seventy-six percent of likely U.S. voters do not think the United States does enough to develop its own gas and oil resources, according to an April 19, 2011, Rasmussen Report.
“[That] perhaps helps to explain why opposition to President Obama’s continuing ban on oil drilling off the Eastern seaboard and in the eastern portion of the Gulf of Mexico is up from early December when the policy was first announced,” the report states.
Rep. Tom Graves (R-Ga.) has heard much the same from his constituents.
“The folks I talk to in my district understand simple economics, supply and demand — demand is increasing, supply is decreasing, prices go up, they wonder why and when you reflect back on the various de facto moratoriums that are in place, they can’t believe that that’s there,” he said yesterday at The Bloggers Briefing. “We’ve been called to be good stewards of what we’ve been blessed with and we’ve been blessed with a lot of resources in the United States, but you can’t be a steward of something you don’t have access to, so we need to have access.”