04.22.2011 0

Industry Statistics Compiled on Anniversary of BP Oil Spill Highlight the Importance of Sen. Vitter’s Challenge to Obama Administration

By Kevin Mooney — Here on the one-year anniversary of the British Petroleum oil well explosion, the Institute for Energy Research (IER) and the American Petroleum Institute (API) have pulled together a few key statistics that call out for a major overhaul of U.S. energy policy.

President Obama often speaks of his concern for this affected by the Gulf oil spill, but the restrictions and provisos he has attached to the permitting progress has slowed the economic recovery.

Although no part of the country is immune to a self-imposed energy freeze, the Gulf of Mexico region is particularly vulnerable. Here’s why:

Even by 2035, oil and natural gas still will account for 57 percent of U.S. energy consumption, according to IER. Resuming work in the Gulf of Mexico is essential in meeting that demand, as independent experts project that GOM deepwater oil production will account for 30 percent of total US production and nearly 95 percent of offshore production by 2020. Moreover, domestic oil production will fall 240,000 barrels/day through 2012, mainly due to the continued energy freeze in the Gulf the Energy Information Administration, reports.

Even a one-year delay in development increases potential losses to government revenue by an estimated $5.5 billion and a two-year delay increases that figure to $8.9 billion, squeezing local, state and federal budgets dry.

The average drill rig in the Gulf of Mexico employs 230 direct workers, who frequently earn between $40,000 and $100,000 annually. Each rig also provides jobs for an average of 920 indirect support workers, according to Greater New Orleans Inc. An estimated 38,000 off- and on-shore jobs are at risk as a result of the “energy freeze,” with a potential 120,000 jobs threatened by 2014 if drilling does not resume, API reports.

To call the Obama Administration unhelpful would be an understatement. In fact, Sen. David Vitter (R-La.) has called out top Obama administration officials for issuing duplicitous and misleading statements on the correct number offshore drilling permits.

In a letter addressed to Interior Secretary Ken Salazar and Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation, and Enforcement, Sen. Vitter (R-La.) details the discrepancy that exists between public statements and official filings.

“Over the last several weeks and months, you have indicated publicly, before Congress, and privately to members, including myself, that there are only a handful of permits awaiting agency action,” Vitter wrote. “It is a mathematical impossibility for your representations to be accurate, as well as the filings of the Department of Justice to be accurate. It is not possible for there to be ‘too few permits’ awaiting review, and simultaneously ‘too many’ permits being reviewed to make issuing a particular handful problematic.”

The numbers reported on page 11 of a motion the U.S. Justice Department filed last week tell a different story than what the Obama administration recently reported in congressional testimony and transmitted privately to elected officials. The motion seeks to stay federal judge Martin Feldman’s two recent orders directing BOEMRE to issue at least seven permits.

In its filing, the DOJ warns the court’s order could force a potentially harmful “re-prioritization,” since there are 270 shallow water permit applications pending and 52 deepwater permit applications pending.

But when he testified before the Senate Energy and Natural Resources Committee, Salazar said the Interior Department had received only 47 shallow water permit applications over the past nine months and that only seven deepwater permit applications were pending. Bromwich told Vitter personally that only six deepwater permits were pending, and he publicly stated that deepwater permits would be limited because “only a handful of completed applications have been received.”

The stats and figures compiled by IER and API highlight the importance of Sen. Vitter’s challenge to Team Obama.

Kevin Mooney is a contributing editor to Americans for Limited Government. You can follow Kevin on Twitter at @KevinMooneyDC.

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