Offshore Energy Leases Fall from $10 Billion to Zero Under Team Obama
But, of course, he is trying to help get us out of The Recession, right?
Even as the Obama administration postures on behalf of deficit reduction and job creation, it continues to advance policies that undermine energy production in the Gulf region and lower federal revenue, Sen. David Vitter (R-La.) has pointed out in his correspondence with top officials in Washington D.C.
Most recently, in a letter addressed to Interior Secretary Ken Salazar and Bureau of Ocean Energy Management Regulation and Enforcement (BOEMRE) Director Michael Bromwich, warned of a severe revenue fall off attached to declining energy lease sales.
“Under the Obama administration’s management, revenue from our offshore lease sale program has gone from $10 billion to nothing in just three years,” Vitter said. “Revenue cannot be generated from sales that do not happen, and jobs cannot be created on leases that private industry cannot acquire.
We’re in a severe fiscal crisis and we’re facing significant economic challenges related to job creation, yet the administration continues to neglect our offshore resources.”
In fiscal year (FY) 2008 revenue from bonus bids on offshore leases was approximately $10 billion, but for FY 2011 that amount is down to $0, according to Vitter’s letter.
“Revenue cannot be generated from lease sales that do not occur, and jobs cannot be created on leases that private industry cannot acquire,” he continued.Without a higher volume of additional permits, the number of active oil rigs will continue to decline in the Gulf, Vitter warned in one of his earlier letters.
The 2011 permitting rate is well below the historical average, Vitter observed.As of early September, “there were 19 floating units operating in the Gulf, up from four in the third quarter of 2010, but down from the average of 28 recorded in the 2007-2009 period,” he wrote.
Up to 20 oil rigs could leave the Gulf, in addition to 11 that have already left, since the administration’s moratorium on deepwater oil and gas drilling went into effect in May 2010, according to a new report.
The future could still be there for the Gulf coast with the right mix of policies, the American Petroleum Institute (AEP) has concluded in a new study.
If U.S. companies were permitted to drill with fewer regulatory hurdles, they could boost government revenues by $800 billion and generate over a million new jobs by 2030, according to API.
But even with a change in administration heading into 2013, the Gulf region is not likely to experience a robust recovery in the short term, Kish, the IER policy expert, warns.
“It will take time to correct these policies,” Kish said. “The Obama administration has shifted the entire ground on which the Gulf of Mexico operates.”
Unless, the administration reverses course, Vitter anticipates “long-term economic impacts that include lose jobs, lost royalties and lost rental fees.” Companies will be reticent to own a lease if they cannot be reasonably certain that exploration plans or permits will be approved, he added.
Daniel Kish, senior vice-president of policy with the Institute for Energy Research (IER), sees an “opportunity cost” for the Gulf region that may not be recaptured anytime soon.“The Obama administration has virtually put a stop to energy development in federal waters,” Kish said.
“This is like planting seeds, if the government won’t allow to the seeds to be planted now, they are preventing future production. We are talking about a lost generation of economic activity.”
Hmmm….If he really wanted to destroy America would he have done anything different???
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