Tag: drilling permits

President Should Accept Responsibility for Lack of Domestic Energy

The Associated Petroleum Industry held a conference call with reporters this morning in anticipation of President Obama’s speech on energy. The API’s top policy expert on upstream operations, Erik Milito, discussed the many policy and regulatory decisions by the Obama Administration that have prevented domestic energy development, especially offshore oil and natural gas.

Milito was justifiably tough on Tuesday’s report from the Department of Interior on “unused oil and gas leases.” From his prepared statement:

Yesterday, the President’ point person for oil and natural gas development, Secretary Salazar, released a politically motivated and deeply flawed report on so-called idle leases. Among other things, it lists offshore leases that do not yet have approved exploration or development plans as “inactive,” regardless of whether there is exploration or pre-production activity going on such as seismic or technical reviews of the geography. This preparation work is necessary to determine whether natural resources exist on a lease and how to produce any oil and natural gas safely.

The Administration’s report assumes that oil and natural gas are spread uniformly across a lease acreage, suggesting that 70 percent of idled leases equates to 70 percent idled resources – as if finding oil were no more difficult than sticking a pipe in the ground. (continue reading…)

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Interior Department Issues Deepwater Permit

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.

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Sen. Landrieu Gets a Commitment from Salazar on Drilling

Sen. Mary Landrieu (D-LA) removed her hold, thus allowing the Senate to confirm Jacob Lew to be director of the Office of Management and Budget on Thursday. From Landrieu’s office, “Landrieu Receives Commitment from Sec. Salazar, Drops Hold of OMB Nominee Jack Lew“:

“Tonight I received a commitment from Interior Secretary Ken Salazar to provide certainty and regulatory clarity to an industry that has operated in the dark for months with shifting rules. The Secretary will come to Louisiana on Monday to meet with industry and express the Administration’s support for the oil and gas industry. He will outline the path forward so that permits will be issued and the people of Louisiana can get back to work in this vital industry. Given this commitment, I released my hold, so that Jack Lew can get to work balancing the federal budget and putting this country back on a path of fiscal discipline.”

Hope she’s right.

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