On Friday, the Interior Department approved its third approval to resume drilling that was suspended as part of the deepwater moratoriums imposed back in May. Crawling at its current rate of 40 permits every 10 months (3 deepwater and 37 shallow water), the agency is on track to take nearly seven years to work through the more than 300 permits still pending approval — a figure revealed in a DOJ court filing earlier this month.
This week, the agency approved its first plan for new deepwater wells. But as Financial Times reporter Sheila McNulty points out, this approval gives the administration political cover but fails to actually give firms the green light to drill:
[Shell’s] plan calls for drilling three exploratory wells in about 3,000 feet of water, 130 miles offshore Louisiana. To actually drill, Shell must still get permits for each well. And, despite the fanfare, nobody has received a permit to drill a new deepwater well in the Gulf of Mexico since BP’s accident.
Despite this economically disruptive backlog, the Bureau of Ocean Management, Regulation, and Enforcement (BOEMRE) has assigned only six drilling engineers to process all permit applications pending in the Gulf of Mexico. While Michael Bromwich bemoans a lack of the staff necessary to speed up the process, he’s sending his staffers to Papua New Guinea to advise its officials on ways to develop the country’s offshore drilling infrastructure. A significant portion of the agency’s budget is covered by fees, royalties, taxes, and rents from energy production, so curtailing drilling closes off cash flow too.
Every day regulators delay is another day we have to increase imports — sending dollars overseas instead of investing them here.
Yet, this is hardly the only way in which the Obama administration has encouraged overseas what it’s prohibited at home. In 2009, the administration through a body called the “Export-Import Bank” offered to loan Brazil’s state-owned oil company, Petrobras, $2 billion to finance its offshore drilling operations. Last week, it granted the foreign firm permission to deploy the first ever deepwater floating production storage facility in the Gulf. And just yesterday, the President shared his plans with Brazil for the U.S. to become one of its “best customers” for oil imports.
Meanwhile, the absurd degree of roadblocks the White House is erecting against development here at home would qualify as comical is the economic results weren’t so tragic. Houston-based ATP Oil & Gas noted that its application for BOEMRE was a staggering 3,601 pages long. “Many of us have read the novel War and Peace, which is around 1,500 pages long,” Bulmahn said. These applications are twice that size. For a point of comparison, consider the original well application approved for Macondo in 2009; it totaled a mere 53 pages.