“How to kill my company” is the headline in today’s hard copy Washington Post for column by Randy Stilley, president and chief executive of Seahawk Drilling, which owned and operated 20 jackup rigs in the Gulf of Mexico. The online headline is the less provocative but no less true, “A preventable bankruptcy in the Gulf of Mexico.”
Last month, Seahawk Drilling declared Chapter 11 bankruptcy and announced the sale of its assets to shallow-water driller Hercules Offshore. This devastating decision was the culmination of a long period in which we found our customers unable to secure permits for work in the Gulf of Mexico despite the fact that both our industry and our company have excellent safety records. In the 11 months after the Deepwater Horizon accident, it became clear that Seahawk’s greatest rival was no longer our industry competitors but the U.S. government.
The government’s drastic slowdown in the issuance of permits for shallow-water drilling operations — in which companies work in familiar geological formations, typically in less than 500 feet of water, mostly seeking to produce natural gas — has all but crippled the industry. The survivors (for now) like Hercules are staying afloat largely thanks to revenue from operations outside U.S. waters. Put another way, a once-proud industry born in the gulf during the Truman administration can no longer survive on operations in its own back yard.
The economic harm from the Obama Administration’s slow walking of permits and domestic energy development reverberates throughout the economy, as a well-known economist from Louisiana explains. From CNSNews.com, “19,000 Jobs Worth $1.1 Billion in Wages Lost Nationally Since Offshore Drilling Moratorium Imposed“:
Joseph Mason, author of “The Economic Cost of a Moratorium on Offshore Oil and Gas Exploration to the Gulf Region,” estimated that the new regional job losses due to the moratorium on offshore oil production in the Gulf region is now 13,000 – up from his original estimate of 8,000.
Mason also estimated the national job losses to have increased from 12,000 to 19,000; regional wage losses to be $800 million, up from $500 million; national wage losses to be $1.1 billion, up from $700 million; lost tax revenues on the state and local level to be $155 million, up from $100 million; and lost tax revenues on the national level to be $350 million, up from $200 million.
Michelle Malkin punched hard on the issue in her recent column, “Let’s export Ken Salazar to Brazil.”
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