January 13, 2012
Quest Offshore Resources, Inc. has released a study highlighting the economic consequences of the slowdown of deepwater and shallow water permitting in the Gulf of Mexico. According to the study, the Administration’s de facto moratorium has cost Americans tens of thousands of good-paying jobs and billions of dollars of domestic economic activity. It has also dramatically decreased potential domestic oil production. The study also examines the positive economic impact that would result from the Administration moving forward with permitting at pre-moratorium levels.
The news isn’t all bad though. The report goes on to highlight the economic boom other countries have experienced due to the Administration’s slow-walking of permits. Countries like Brasil, Egypt and Angola have seen over $20 billion of investments as a result of rigs leaving the Gulf of Mexico. Below are a few highlights:
- The effects of the deepwater drilling moratorium and permit slowdown have reduced total capital and operating expenditures in the Gulf of Mexico by a combined $18.3 billion.
- As a result of decreases in investment due to the moratorium, total U.S. employment is estimated to have been reduced by 72,000 jobs in 2010 and approximately 90,000 jobs in 2011.
- The permitting slowdown has caused the United States to drop 6 percent from its projected share of worldwide oil and natural gas investment in 2011.
- Since April 2010, 11 deepwater drilling rigs have left the Gulf of Mexico and relocated to countries such as Brazil, Egypt and Angola. The investment associated with these rigs is estimated to be over $21.4 billion.
- If drilling permits going forward were to be issued at pre‐moratorium rates:
- The increased number of projects would increase investment in the Gulf of Mexico offshore by over $15.6 billion.
- Average annual U.S. employment would be increased by between 17,000 and 49,000 thousand jobs per year.
- By 2017 offshore oil production would rise by approximately 13 percent relative to its current projected path.
Last year, House Republicans passed H.R. 1229, the Putting the Gulf Back to Work Act. This legislation would the end the Obama Administration’s de facto moratorium in a safe, responsible, transparent manner – putting thousands of Americans back to work and increasing American energy production to help address rising gasoline prices. H.R. 1229 passed the House of Representatives in May, and currently awaits further action in the Senate.