CERA study: Faster drilling permits means more jobs

Faster permitting of offshore oil and gas projects could create nearly 230,000 new jobs in 2012 and boost the economy by $44 billion, including a surge in federal and state tax revenues, according to an industry-funded study put out today by IHS-CERA.

The job growth would extend well beyond the traditional Gulf Coast energy industry states, the study says, boosting employment indirectly as far away as California, New York, Florida, Illinois and Georgia.

The study, funded by The Gulf Economic Survival Team, a collection of largely Louisiana-based energy and business interests, looks at data on the pace of permitting by the Bureau of Ocean Energy Management Regulation and Enforcement through April 30 – six months after the federal moratorium on offshore drilling was formally lifted following the Deepwater Horizon accident.

You can see the study here.

IHS CERA Chairman Daniel Yergin said in a conference call the study doesn’t try to answer why the pace of permitting has slowed or how it should be fixed. Rather is simply identifies the problem and the missed economic opportunities that come with less oil and gas drilling.

Following the April 2010 incident that killed 11 and led to the largest ever oil spill in the U.S. Gulf of Mexico, the federal government began to reorganize the agency overseeing offshore exploration and production, adding a number of new safety and environmental rules and did away with prior rules exemptions that allowed companies to skip certain analysis.

Since then, the backlog of permits waiting for approval has grown, the study says, reaching some 90 percent more than pre-spill levels.

The length of time permits are waiting for approval has also grown some 95 percent over the pre-spill pace, the study says.

These delays are leading to lost opportunities for industry investments in the U.S. Gulf, which would create jobs and tax revenues, the IHS-CERA study reported.

It is also hurting future U.S. oil production as fewer drilling permits mean fewer new oil discoveries – or at least several years of delays before new discoveries are made. Faster permitting could lead to an additional 400,000 barrels per day in production by 2012, according to the study.

IHS-CERA

“There is a need to better align the new regulatory environment with industry capacity, as the current pace of plan and permit approval is congested,” said Jim Burkhard, IHS-CERA’s managing director for global oil, who co-authored the report. “With that alignment, then the country can realize the economic and energy security benefits of a restarted Gulf of Mexico.”

The study presents arguments similar to those made by industry groups repeatedly in the months since the moratorium was lifted. Earlier this month a study from the American Petroleum Institute and the National Ocean Industries Association said a return to prior permitting levels could create about 190,000 jobs by the year 2013.

There have been some changes in the outlook since the time frame of the study, which ended April 30.

In June ExxonMobil announced a new discoveryin the Keathley Canyon area of the Gulf with an estimated 700 million barrels of recoverable oil. Shell also announced plans to invest $2.5 billion in its Cardamon field in the Gulf.

BOEMRE has also said a new Gulf lease sale is on schedule for later this year:

In a hearing last week, BOEMRE director Michael Bromwich defended the agency’s work.

IHS-CERA

The agency can only act on the permits they have pending, Bromwich said, which as of Thursday includes four new shallow water permits and 14 new deepwater well permits.

He has also said that while BOEMRE has hired more permitting staff and inspectors, further hires are jeopardized by a Republican spending bill in the House that would cut funding for the agency roughly $35 million below what had been sought by the Obama administration

Bromwich is still seeking authority to pay recruits more money and improve benefits in order to better attract and retain staff at the agency.

“We are working as efficiently as we can with the resources we have, including hiring people as swiftly as the federal system will allow with the funding provided this Spring by the FY11 budget,” said Melissa Schwartz, a spokeswoman for BOEMRE.

24 Comments

  1. JB

    These are high paying jobs, not fast food service industry jobs.

    #1
  2. MUNDYJM

    I’m seriously beginning to think that this President, doesn’t care if 230K more jobs are added to the unemployment numbers. He is so radical, so self indulgent and arrogant, congress should investigate and impeach him for purposely choking American jobs and industry!

    #2
  3. richard

    Is that counting the jobs created trailing and picking up boom, the skimmer ships and the beach crews?

    #3
  4. Flavortown

    If we allow drilling, the world will explode.

    #4
  5. YeahBuddy

    And exactly how will that increase our dependence on Brazilian oil?
    Yes, just as I thought. Let’s focus, here.

    #5
  6. BOB

    Pee on those jobs we don’t want dirty jobs only green jobs like Spain. Spain is in financial trouble like us and they have had a green jobs policy for years and their unemployment just got worse and worse.

    We the US of Amerika should strive to be like Spain.

    #6
  7. txloanguy

    Why is this a surprise? The job killer named Barack Obama has been busily at work sculping the US in his Progressive image. Oil bad. Green energy good. Even the green energy projects that will never come close to replacing oil. Wind 3% and solar less than 1%? Boy that really makes us want to stop all drilling. 2012, we need a change.

    #7
  8. jim jim

    big oil can cry me a river … after The Deepwater Horizon oil spill, they are lucky there is any drilling period ! if anything, we should scalee down production and let prices go up … tired of seeing mega trucks with only one passenger inside on the freeway

    #8
  9. meetwoodflac

    how much does the gov’t lose in lost royalties with their foot-dragging as pertains to permits? that needs to be factored into their interference.

    #9
  10. detada

    This is what republicans and party of NOthing supporter don’t seem to realize. Spending cuts have a larger negative impact on job creation than increasing taxes. What is even sadder is how republican congressmen (and women) who say they want to reduce government spending, are quietly submitting spending projects located in their voting districts…..the epitome of hypocrisy.

    #10
  11. KB

    “Bromwich said…that while BOEMRE has hired more permitting staff and inspectors, further hires are jeopardized by a Republican spending bill in the House that would cut funding for the agency roughly $35 million below what had been sought by the Obama administration…”
    ——————
    Bromwich is a LIAR. It’s not affected by that.

    #11
  12. RBBR

    At this late date ,,, Obama, trying to dig back up to relevance, cares only about one thing: GETTING RE-ELECTED.

    He doesn’t care really if there’s drilling in the GOM or not. It’s clear to everybody that he has a hard time understanding what drilling for oil and gas is anyway. So, let’s sit back and watch how Obama allows O&G operators back into the Gulf shortly, propelled by much higher fees and even more complicated regulations, and tries to grab all the credit for “job creation”. Hardy-har-har. He’s so funny, he needs a guest spot on “Hee-Haw”.

    #12
  13. SarahATP

    WOW!!! That’s almost half as many State and Educator Jobs that Perry and the State R’s are cutting in Texas alone!!!
    Man!

    #13
  14. SarahATP

    How many thousand undrilled leases do oil companies hold in the US? I mean… if they had obtained permits for those, they could have drilled (what they already have leased) years ago.

    #14
  15. Nacho

    For the people jumping up and down screaming about how the legal process is keeping those 230,000 jobs from coming to fruition they also need to recognize the impact of the next spill that this is trying to prevent. People want to get excited about the $44 billion this will add to the economy but when it’s compared to the $20 billion escrow account for victims of the last spill it’s worth doing it right this time.

    #15
  16. Mark from Louisiana

    The folks that write the permits are all busy in New Guinea helping them set up a permit system quickly so George Soros does well on his One Billion dollar investment in natural gas there.
    Guess who is funding the anti fracking groups in America………..

    #16
  17. Jackalope

    detata, in case you haven’t noticed, spending has INCREASED $800 billion under Obama. BOEMRE hasn’t been cut (yet), so what’s their excuse???

    #17
  18. Jackalope

    Sarah, leases do not mean permits. How many leases do oil companies hold and cannot drill because the government is sitting on the permits? Yet the oil companies do not get their lease payments refunded when the government sells a lease and then denies all drilling permits.

    #18
  19. Slick Earl

    This study is certified to be biased as the energy companies paid for it — kind of the like the spilled oil is good for the otters and fish study.. The number of jobs is a small part of what was laid off in the 80′s and 90′s. These new hands, even from NASA, have no experience in drilling so where is the expertise going to come from??

    #19
  20. Tom

    Hussein Obama hates the Oil & Gas Industry so please do not speak of this again.

    #20
  21. It shouldn’t take a big “study” to know that “work” means jobs. The oil industry provides high paying jobs requiring special skills.

    The only problem is eliminating the “drunks” and “druggies” from the equation. Jobs create jobs. We have been regulated out of business. Recovery will never take place in an environment that rewards failure.

    #21
  22. Adler

    Remember when O’BozO said his moratorium would only effect 25,000? Now the truth comes out and it’s nearly 10 times as many. But wait. Those 1/4 MILLION workers have families, so the number includes another 3/4 MILLION people who are directly effected.

    Not so fast though. These 1 MILLION people spend money, or not. Their loss of income means they don’t go out to eat, they don’t go to movies, don’t go to the beauty parlors, don’t buy new cars, lawn mowers, pay for vacations, etc. Their employers don’t buy as many office supplies, tools, replacement parts, vehicles, etc. So the Idiot’s moratorium has an effect all up and down the US economy, and this during a recession. Is there any wonder why real unemployment is still near 20%?

    #22
  23. pdh42

    Explain to all Mr. Fowler why you think that Nobama really cares about the energy industry???? He has done everything that he can to kill ALL forms of energy and the many high paying jobs that it creates in this country…. They are NOT going to allow drilling in the gulf even though he lent the Brazil oil company over 2 billion dollars to do deep water drilling off of their coast…. Guess who is a LARGE share holder in that company…. George Soros the man who is known for destroying economies and one that really hates America and what it stands for…..

    #23
  24. MrOldMan

    “The study, funded by …, a collection of largely Louisiana-based energy and business interests…” – That’s all I needed to read right there.

    #24