The BP oil spill was a body blow to the American Gulf coast. But in addition to the economic cost to tourism, fishing, and the environmental damage, new deepwater drilling was put on hold for months.
One new report says, that is costing everyone, including Uncle Sam, money.
This time last year, we were all fixated on the underwater camera that showed oil gushing into the Gulf.
But now, one group says, it’s time to get back to business in deep water, and one beneficiary could be the US Treasury.
For 85 agonizing days, oil poured into the Gulf of Mexico from the Deepwater Horizon oil rig, and that blowout ultimately sent 5 million barrels into the water, and onto the Gulf Coast.
But outrage at BP and its bumbling response has now turned into anxiousness to get the industry going again.
A 6-month moratorium on deepwater drilling was imposed while experts investigated the worst spill in US history.
“We will continue the existing moratorium, and suspend the issuance of new permits to drill deep water wells for 6 months,” President Obama announced.
“But even after those moratoria had expired,” says Rob Bluey of the Heritage Foundation, “you had a situation where government has essentially been dragging its feet and not approving permits at nearly the pace that it has in the past.”
But the ban ended in October, and the permitting of new deepwater rigs is going slowly.
With tougher safety standards in place, 10 have been issued so far in a period that would normally see 40.
“Part of the problem,” Bluey says, “is that you always have a delay from when you grant a permit to actually producing oil. It could take 2 years in fact, before we see some of this materialize. If the Obama administration started granting these permits again, and production increased in the Gulf and we didn’t have a deficiency of 200,000 barrels a day, then, yeah, the government could be collecting what it intended to collect to begin with.”
And that costs Uncle Sam money.
“But until that happens,” he concluded, “you’re looking at about a billion dollars in lost revenue over the course of 2011.”
The United States used about 20-million barrels of oil a day. We produce 8. That makes us a net importer.
It would be nice to address that balance a bit.