Tag: Oil

Manufacturers Call on Interior Department to Expedite Drilling off Alaska’s Coast

Yesterday, the National Association of Manufacturers (NAM) filed comments with the Department of the Interior’s (DOI) Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) urging them to expedite the permitting and lease process in the Chukci Sea and other areas of Alaska’s Outer Continental Shelf (OCS) for oil and natural gas development.

Estimates show that in Alaska’s OCS, there are roughly 27 billion barrels of oil and 132 trillion cubic feet of natural gas. It is time to put an end to needless red tape, excessive delays and unreasonable regulations preventing domestic exploration and production.  Using these abundant resources will not only generate $193 billion in revenue to the government over the next 50 years, it will also create tens of thousands of jobs, increase our energy security and our domestic supply as well.

While unemployment continues to increase, and energy prices are at record highs, it is time we use the domestic resources readily available to us to solve the problems we face.

Manufacturers support responsible and environmentally sensitive practices that promote safety and conservation, and this can be achieved; all while securing our energy future and rebuilding our shaken economy. It is time to open up Alaska’s OCS.

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The Department of Interior Issues Its Fifth Permit – But It’s Still Not Enough

The Obama Administration, today, issued its fifth deepwater permit since lifting the Gulf drilling moratorium, approving Chevron’s request to drill a “wildcat” well in 6,750 feet of water more than 200 miles off the coast of Louisiana.  This is the most important permit so far, in that it is actually for a new exploratory drilling as opposed to a permit that was previously issued.  It is also the second permit to be approved which is using the containment system designed by Marine Well Containment Company as its solution in the case of a loss of well control.  This is a good step forward and, we hope, marks the Administration’s intention to move more expeditiously on the other pending permits.  In addition, with the unrest in the Middle East, and the increasing oil prices, there is now talk of a possible double-dip recession.  Therefore, it is essential for the Interior to move on these permits as quickly as possible to ensure that as many companies are able to return to the Gulf of Mexico to safely drill and explore for domestic sources of oil and gas. 

Offshore drilling is a significant part of the U.S. economy.  The federal government estimates that the Gulf of Mexico Outer Continental Shelf contains proven reserves of 20.3 billion barrels of oil and 183.7 trillion cubic feet of gas.  Moreover, the waters off Alaska’s coast contain about 27 billion barrels of oil and 132 trillion cubic feet of natural gas.  These reserves can provide a dependable and secure source of energy which will keep energy costs low. 

With its action on Chevron’s application, Interior has shown itself capable of approving permits for new deepwater drilling.  Let’s see the agency follow through by moving on all these pending permits, ensuring that many companies are able to return to the Gulf of Mexico to safely drill and explore for domestic sources of oil and gas.

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Issuing Only Three Permits for Offshore Drilling is Not Enough

This afternoon, the Department of Interior issued a deepwater permit to ATP Oil & Gas Corp. to resume drilling 90 miles south of Venice, Louisiana.  The project was put on hold by the drilling moratorium.  Although this is a good step forward by the Interior, the permitting process is still slow and more permits need to be issued.  During a time when the price of gas at the pump continues to rise, companies waiting for permits should be allowed to go back to drill in the Gulf of Mexico. 

Currently, a number of companies are keeping their rigs “warm” by continuing to pay for their leases and maintaining a skeletal group of workers so that they can immediately return to drilling when they receive their permits from Interior.  These companies can incur costs up to $1 million a day while their rigs sit idle. 

Offshore drilling is a significant part of the U.S. economy.  As Scott Angelle, Secretary of the Louisiana Department of Natural Resources, noted in his testimony this week, one third of our nation’s domestic production comes from the Gulf, and nearly 90% of that production is from deepwater drilling.  Furthermore, drilling in the Gulf directly impacts nearly 16,000 companies and 153,000 employees. 

Although the Interior is on the right track by issuing its third permit, this will not address those jobs that are put at risk and the slowdown of oil and gas production.  The Interior needs to streamline its permitting process and to issue permits more quickly.   The U.S. is still struggling with a recovering economy with high unemployment.  Furthermore, with the unrest in the Middle East that is causing even higher prices at the pumps, the Interior needs to be more efficient in issuing permits that will boost our domestic production of oil and gas and put people in the region back to work.

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Transition Away from Prosperity, 9 Million Jobs

From President Obama’s televised address last night:

Each of us has a part to play in a new future that will benefit all of us.  As we recover from this recession, the transition to clean energy has the potential to grow our economy and create millions of jobs -– but only if we accelerate that transition.  Only if we seize the moment.  And only if we rally together and act as one nation –- workers and entrepreneurs; scientists and citizens; the public and private sectors.  

Jonah Goldberg, National Review, “Oil: The Real Green Fuel“:

If you remove the argument over climate change from the equation (as even European governments are starting to do), one thing becomes incandescently clear: Fossil fuels have been one of the great boons both to humanity and the environment, allowing forests to regrow (now that we don’t use wood for heating fuel or grow fuel for horses anymore) and liberating billions from backbreaking toil. The great and permanent shortage is usable surface land and fresh water. The more land we use to produce energy, the less we have for vulnerable species, watersheds, agriculture, recreation, etc.

From the American Petroleum Institute, the summary of a paper released last November:

America’s Oil and Natural Gas Industry Supports Over 9 Million Jobs
Everyone is touched by America’s oil and natural gas industry. How so? Farmers use fertilizer made from natural gas. Truckers use diesel fuel to ship goods to market. And businesses rely on oil and natural gas to make and sell their products and provide their services. If you buy a loaf of bread, purchase a new electronic gadget, or drive a car, consider yourself a part of the oil and natural gas industry. From airline pilots to welders, and every job in between, we’ve all got a stake in our energy future.

The API paper is available here.

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A Little Reality Amid the Slogans on Oil

Thanks to Robert Bryce of the Manhattan Institute for rebutting the “addicted to oil” sloganeering that has gained further purchase after the Deepwater Horizon accident. Bryce’s column today in The Examiner, “The blowout and our addiction to prosperity,” rejects equating the economy’s productive use of oil to an individual’s woes that can be overcome by something akin to appearing on “The Biggest Loser”:

If only it were so easy.

The blowout in the Gulf is a heartbreaking mess. I say that as someone who swims, fishes, and birdwatches on the Gulf Coast. But as awful as the blowout is — as dreadful as the environmental damage is and will likely be for years to come — the simple unavoidable truth is that we humans cannot, will not, quit using oil.

If oil didn’t exist, we’d have to invent it. No other substance can compare to oil in terms of energy density, flexibility, cost, and convenience.

For all of the myriad problems that oil creates, it also provides us with unprecedented mobility, comfort, and convenience. While we think of oil primarily as a transportation fuel, it’s also a nearly perfect fuel for heating.

It can be used to generate electricity. When refined, it can be turned into an array of products ranging from cosmetics to shoelaces and bowling balls to milk jugs.

The addiction meme inflames the masses and makes for convenient talking points for ambitious politicians, but the reality is that oil remains an absolutely critical commodity in the global economy. And that’s why BP and Transocean were out there in the Gulf of Mexico drilling in 5,000 feet of water.

President Bush’s promotion of the “addicted to oil” logic in his 2006 State of the Union was a low point in analytical thinking and clear communication. Unfortunately, it remains popular today, including, not surprisingly, with the New York Times’ Tom Friedmann.

Bryce provides a good starting point for informed debate and policymaking: Oil is a natural resource and a commodity critical to prosperity and mobility.

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Still Celebrating the U.S. Oil Industry at 150 Years

The American Energy Alliance helpfully supplies more, good links to articles and commentary on the 150th anniversary of the successful drilling of the first commercial oil well in the United States, completed at Titusville, Pennsylvania.

Philadelphia Inquirer, “Obscure, unsung genius of Penna.’s early oil boom“:

TITUSVILLE, Pa. – The oil boom that began 150 years ago in this small northwestern Pennsylvania town changed the world and made countless people rich, but not the man who found the way to extract black gold from the earth.

Edwin Laurentine Drake died an invalid, virtually penniless. In his later years, he relied on the goodwill of friends and a state pension given late in life to recognize the millions of dollars in tax revenue Pennsylvania made thanks to his drilling method.

The Titusville Herald, “The drizzle didn’t stop the sizzle with 240 attending BBQ,” celebrating the return of Penny Pennzoil to Titusville, 50 years on.

And from the inimitable Daniel Yergin, writing in “Foreign Policy“: “Oil’s very future is now being seriously questioned, debated, and challenged. The author of an acclaimed history explains why, just as we need more oil than ever, it is changing faster than we can keep up with.”

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