The Department of Interior (DOI) announced this afternoon that it issued its first deepwater drilling permit for the Gulf to Noble Energy. While this may be a good first step for DOI and the permitting process, there are still 14 deepwater permits pending review and approval. Since the moratorium on offshore drilling was lifted in November 2010, companies, who can afford to, have kept their lease and rigs “warm.”
Essentially, these companies pay approximately $550,000 per day in order to maintain their rigs – although for the most part the rigs are idle. Offshore drilling is a significant part of the U.S. economy both in terms of generating jobs as well as creating a domestic supply of oil and gas. A recent study noted that there are 125,000 jobs that can be lost by 2015 and we can stand to lose 680,000 barrels of oil by 2019 if the permitting delays continue to linger.
Although the DOI is on the right track by issuing this one permit, today’s announcement it will not resolve the jobs put at risk and the lost production if the permitting process is not streamlined. In an economy with high unemployment and disruptions in the Middle East that have significantly increased the price of oil, the U.S. cannot afford more permitting delays.