A new report from a New Orleans-based group reveals that the Obama administration is approving just 35 percent of the oil drilling plans for the Gulf of Mexico so far this year. It is also taking an average of 115 days — nearly four months — to secure approval from the Bureau of Ocean Energy Management, Regulation and Enforcement.
Those numbers contrast sharply from previous years. This historical average is a 73.4% approval rate. The approval time has nearly doubled; the historical average is 61 days for the government to approve plans.
For plans that require drilling activity, the numbers are even worse. New regulations require all deepwater drilling plans to undergo an environmental assessment process. Those plans have an average approval time of 222 days or more than seven months.
The data were included in the latest release of the Gulf Permit Index from Greater New Orleans Inc. It has monitored this trend since last year’s oil spill in the Gulf of Mexico. The delays have continued for more than 18 months later.
Drilling permits don’t fare much better under the Obama administration either. One sign of hope might be a recent uptick in shallow-water permits. Greater New Orleans Inc. reported:
Deep-water permit issuance continues to lag the monthly average observed in the year prior to the oil spill. Only 5.0 deep-water permits are being issued per month since September 2011, representing a 0.8-permit — or a 14% — monthly reduction from the average of 5.8 permits per month. This number also represents a 2.0-permit — or a 29% — reduction from the historical average of 7.0 permits per month over the past three years.
Shallow-water permit issuance is rising above the historical average. Since September 2011, 8.3 shallow-water permits, on average, were issued. That number represents an increase of 1.2 permits — or 31% — from the monthly average of 7.1 permits per month observed in the year prior to the oil spill. However, this number represents a 6.4-permit — or a 44% — reduction from the historical average of 14.7 permits per month over the past three years.
The slowdown of activity in the Gulf of Mexico is having an impact beyond Louisiana, where one deepwater rig can create 700 jobs locally. Lack of production harms employment across America. It also strips much-needed revenue from the federal government, according to Nick Loris, an energy expert at Heritage.
“Allowing access for exploration and creating an efficient regulatory process that allows energy projects to move forward in a timely manner will not only increase revenue through more royalties, leases, and rent,” Loris recently wrote, “it will also create jobs and help lower energy prices in the process.”
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