Friday, August 20, 2010

Stealth Moratorium in the Gulf hurting shallow water exploration

The shallow water portion of the offshore drilling moratorium was supposedly lifted on June 7.  But Secretariat Salazarovich has apparently been enforcing a de facto moratorium on shallow water drilling rigs as well.  From a Houston Chronicle story Wednesday:

So far, permitting delays have idled 14 of the 46 available jackups in the Gulf and forced offshore companies to cut several hundred jobs. Each rig employs about 100 workers and supports many additional indirect jobs at supply boat companies, oil field services companies and other businesses.

If the situation doesn't change, 25 rigs will be idle by the end of August and 30 by the end of September as existing permits expire, according to figures provided by the Shallow Water Energy Security Coalition, an industry group formed in May to call attention to the issue.

"And if we're going to continue on the path that we're on, just wait," said James Noe, a senior vice president with Hercules Offshore and one of several industry executives who met Wednesday with the Houston Chronicle editorial board.

Why is the Obama regime holding up permits for shallow water exploration?

It appears that the regime is painting the entire marine oil and gas drilling industry with a broad brush.  It bears noting that the Deepwater Horizon spill was the first serious offshore drilling accident in more than 50 years, and the vast majority of exploration has been in shallow water.  Shallow water rigs have either legs or cable anchoring systems that allow them to attach to the sea floor.  This means blowout preventers go on the rig deck, not the bottom of the ocean, which makes the shallow water operation infinitely more safe.  Even if problems do occur on the bottom, the depths are such that divers are able to reach the wellhead. 

There’s no reason for a pile of new regulations governing shallow water drilling. The industry has a decades-long record of safe operations. It just goes to show that this regime is absolutely clueless about the impacts of its decisions.  No one fails to learn the law of unintended consequences worse than Obama and Secretariat Salazarovich.

Either that, or the regime is committed to destroying the offshore oil & gas industry altogether, erasing tens of thousands of jobs, ensuring long term dependence on foreign oil and driving long run energy costs higher.

h/t Washington Insider

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