Tag: OCS drilling

Manufacturers Need Access to Affordable Energy

Late last week the U.S. Energy Information Administration published their “Today in Energy” and featured coal reserves. According to the report, “The United States leads the world with over 260 billion short tons of proven recoverable coal reserves—28% of global reserves. Recoverable domestic coal reserves, at current mining levels, would last 222 years.”

I find it ironic that we have one government agency touting our coal reserves while another agency does everything it can to limit the use of coal. Affordable energy is key to manufacturers’ ability to compete. We can ill afford to lock away any sources of energy that can help manufacturers better compete. We have an energy policy in this country being set by the Environmental Protection Agency (EPA) instead of Congress.

President Obama’s decision to shelve the unachievable and unaffordable ozone standards proposed by the EPA was appropriate but long overdue. There are a whole slew of other EPA regulations that we need to deal with from Boiler MACT, to Utility MACT to coal ash as well as permitting delays for OCS drilling and threats of regulation on shale exploration and fracking. We need the White House to lead and make decisions that provide an environment where job creation is possible and not stifled by poorly thought out regulations. 

Chip Yost is vice president for energy and resources policy, National Association of Manufacturers.

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No Permitorium for Cuba

From TWN, AFP, via China Post, “Cuba reveals plans to drill 5 new oil wells in the Gulf of Mexico by 2013“:

HAVANA — Cuba on Tuesday announced plans to drill five deep-water oil wells in the Gulf of Mexico beginning this summer, expressing confidence that its efforts will be rewarded with major new energy finds.

“We’re about to move to the drilling phase,” said Manuel Marrero, an official with the government authority tasked with overseeing Cuba’s oil sector. “We’re all really hopeful that we will be able to discover large reserves of oil and gas,” said Marrero, who added that the ventures would be undertaken with the help of unspecified foreign companies.

There’s a new pitch: End Cuba sanctions so U.S. can import its oil!

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Drill, Brazil, Drill, Says the U.S.

The Washington Post editorialists are not persuaded by President Obama’s odd pleas to the Brazilians to drill more offshore while the Administration slow walks domestic drilling permits in the Gulf of Mexico. From today’s lead editorial, “Oil NIMBY-ISM“:

WHEN WAS the last time an American president stood before an audience in a foreign country and announced that he looked forward to importing more of its oil? Answer: Just over a week ago, when President Obama joined political and business leaders in Brasilia in hailing the fact that their newly discovered offshore petroleum reserves might be twice as large as those in the United States. Americans “want to help with technology and support to develop these oil reserves safely, and when you’re ready to start selling, we want to be one of your best customers,” Mr. Obama said….

Mr. Obama’s enthusiasm for punching holes in the ocean floor off Brazil is hard to reconcile with his decision, announced Dec. 1, to keep the waters off the East and West coasts and the eastern Gulf of Mexico off-limits to exploration indefinitely. His policy was a reversal of an earlier decision he had made to open some of those areas. We can understand that reversal, after the massive oil spill in the western Gulf last year. And, demonstrating a measure of flexibility even after the disaster, the administration has announced five deep-water drilling permits in the western Gulf since the spill.

The Post’s reference to NIMBY-ism makes the point that by pushing energy development overseas, the Obama Administration sends it to countries less able or inclined to protect the environment, e.g., Nigeria or Angola.

Today’s Post editorial is just the latest in a wave of pointed criticisms against President Obama for his short-sighted remarks in Brazil on energy development. Others: (continue reading…)

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How to Kill My Company: A Drilling Moratorium and Lost Jobs

“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. (continue reading…)

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Manufacturing Jobs or Deepwater Drilling Moratorium?

The National Association of Manufacturers ran this ad today in Politico.
Politico Deepwater Drilling Ad Paper Version

And we’re giving Scribd a try as an embedding tool.

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No ‘Energy Bill’ in the Senate Until September, If Then

Senate Majority Leader has pulled the plug, flipped the switch, powered down and shut off Senate consideration of an “energy bill” this week.

Reid announced the change in plans to reporters this afternoon. He blamed Republicans, saying, “We tried jujitsu. We tried yoga. We tried everything we can with Republicans to get them to come along with us and be reasonable.”

A Fox News blog reports this edifying statement: “Sen Bob Menendez, D-NJ, chairman of the DSCC, bashed Republicans for having ‘special interest’ policies and said this would be the key question of the 2010 elections: ‘Whose side are you on?’”

The bill would have lifted the liability cap on offshore drilling accidents, driving all but the largest operators out of the Gulf of Mexico. More …

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Gulf Residents to Rally Against Moratorium on Jobs, Energy Security

The Louisiana Oil and Gas Association is reporting on plans for a rally next Wednesday at the Lafayette Cajundome, the Rally for Economic Survival, protesting the federal moratorium on deepwater drilling in the Gulf of Mexico that is costing jobs just as the region needs for more economic activity and employment.

Don Briggs, president of the association, commented, “I have never seen so many people so focused and dedicated to a cause. I hope the entire nation will see the large crowd we assemble at the Cajundome, hear the words of our diverse and distinguished speakers and realize how important lifting the moratorium is for the entire country. More importantly, I hope President Obama will see the people in the Cajundome – representing all walks of life – and hear their message to lift the moratorium immediately.”

One of the speakers will be Louisiana Gov. Bobby Jindal, who has an op-ed in today’s Washington Post, “Ban on deep-water drilling adds insult to injury“:

[The] federal government unwisely chose to add insult to injury by decreeing a moratorium on deepwater drilling in the gulf. This ill-advised and ill-considered moratorium, which a federal judge called “arbitrary” and “capricious,” creates a second disaster for our economy, throwing thousands of hardworking folks out of their jobs and causing real damage to many families. Now this federal policy risks killing 20,000 more jobs and will result in a loss of $65 million to $135 million in wages each month….

Let’s be clear: This moratorium will do nothing to clean up the Gulf of Mexico, and it is already doing great harm to many hardworking citizens. The effects will extend well beyond Louisiana. Since the moratorium was announced, America has already lost two rigs to foreign countries. More drilling companies are negotiating right now to work elsewhere. Every time we decrease our level of production, we make America more dependent on foreign sources of energy.

Diamond Offshore Drilling has announced the move of rigs to off the coast of the Congo, Africa, where the oil it produces could wind up being shipped back to the United States.

The Louisiana Mid-Continent Oil and Gas Association offers more details on the economic impact.

  • Each drilling platform averages 90 to 140 employees at any one time (2 shifts per day), and 180 to 280 for 2 2-week shifts
  • Each E&P [exploration and production] job supports 4 other positions
  • Therefore, 800 to 1400 jobs per idle rig platform are at risk
  • Wages for those jobs average $1,804/weekly; potential for lost wages is huge, over $5 to $10 million for 1 month—per platform.
  • Wages lost could be over $165 to $330 million/month for all 33 platforms
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Robert Samuelson: Energy Pipe Dreams

The Washington Post’s opinion columnist, Robert Samuelson, once again indulges himself in facts and reality in covering political rhetoric versus practical reality. Darn him, the dreamers curse.

From “Obama’s Energy Pipe Dreams“:

Just once, it would be nice if a president would level with Americans on energy. Barack Obama isn’t that president. His speech the other night was about political damage control — his own. It was full of misinformation and mythology. Obama held out a gleaming vision of an America that would convert to the “clean” energy of, presumably, wind, solar and biomass. It isn’t going to happen for many, many decades, if ever.

For starters, we won’t soon end our “addiction to fossil fuels.” Oil, coal and natural gas supply about 85 percent of America’s energy needs. The U.S. Energy Information Administration (EIA) expects energy consumption to grow only an average of 0.5 percent annually from 2008 to 2035, but that’s still a 14 percent cumulative increase. Fossil fuel usage would increase slightly in 2035 and its share would still account for 78 percent of the total.

Unless we shut down the economy, we need fossil fuels.

China is not taking the lead on “clean energy” technology, and the Presidents’ six-month moratorium on deepwater drilling isn’t justified, Samuelson further argues, again inconveniently using facts instead of wishful thinking to make his points.

Also cited, Robert Bryce’s new book, “Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future.”

UPDATE Another op-ed columnist burdened with facts is Charles Krauthammer, and he, too, works on the leader as dreamer theme, “Barack Obama, Dreamer in Chief“:

“Part of the reason oil companies are drilling a mile beneath the surface of the ocean,” said Obama, is “because we’re running out of places to drill on land and in shallow water.”

Running out of places on land? What about the Arctic National Wildlife Refuge or the less-known National Petroleum Reserve — 23 million acres of Alaska’s North Slope, near the existing pipeline and designated nearly a century ago for petroleum development — that have been shut down by the federal government?

Running out of shallow-water sources? How about the Pacific Ocean, a not-inconsiderable body of water, and its vast U.S. coastline? That’s been off-limits to new drilling for three decades.

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Good Start, But Why Reject More Energy?

Jay Timmons, executive vice president of the National Association of Manufacturers, issued a statement in reaction to President Obama’s announced support for some expanded offshore energy development.

The take away:

  • Today’s announcement by President Obama to move forward with opening portions of the Outer Continental Shelf for oil and natural gas exploration and development is a positive step toward a lower cost domestic energy supply and ensuring U.S. energy security and independence. Manufacturers commend the President for his leadership on this issue.
  • While manufacturers support the President’s announcement, we also believe the Administration has missed an opportunity to take advantage of proven and known reserves in Alaska and other portions of the OCS and to expedite the leasing process. To shut down known resources only hinders our ability to reduce our foreign energy dependence and create jobs.
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State of the State (Commonwealth): Virginia and Energy

Virginia’s new Gov. Bob McDonnell delivered his State of the Commonwealth address Jan. 18, fleshing out the policy programs he mentioned in his earlier inaugural address. While he did not use the word “manufacturing” — the term we’ve been searching for in governors’ addresses this month — the Republican governor did talk about “industry,” e.g., the bio-tech industry, an industrial mega-site, the wine industry, and, with the most detail, the energy industry.

McDonnell’s prescription for economic growth via energy is an all-of-the-above approach, including offshore oil and gas development, nuclear power, coal and bio-fuels. The Virginia governor is giving the Republican response to President Obama’s State of the Union address Wednesday, but his vision of energy development is non-partisan and one that the President would profitably embrace in pursuit of jobs, growth and tax revenues.

From McDonnell’s prepared remarks:

I am committed to utilizing all of our vast, God-given natural resources to make Virginia the “Energy Capital of the East Coast.” We must do our part to promote American energy independence.

We have the opportunity to be the first state on the Eastern Seaboard to sell the leasing rights to explore and drill offshore for oil and natural gas in 2011. The federal moratoria have been lifted. The state that is first will reap an economic bonanza. We can lead or be left out. Four years ago you had the foresight to pass legislation giving us a critical advantage. We cannot now let Washington bureaucracy undermine the clear desires of the people of Virginia.

I have written to Secretary of Interior Ken Salazar, and have let our congressional delegation know that this is a priority for our Commonwealth, consistent with President Obama’s commitment to make our nation more energy secure. Several studies show that environmentally-safe offshore exploration and production will create thousands of jobs, put hundreds of millions into our depleted state coffers, and spur billions in capital investment in the Old Dominion. There are many unemployed Virginians who are ready to work in the oil and gas production industry. (continue reading…)

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