Policies have consequences – in the graphic below from API’s 2012 State of American Energy report, the consequences of the 2010 Gulf deepwater drilling moratorium are manifest: more than $21 billion in investment dollars lost and the departure of drilling equipment to other, more hospitable, venues.

More detail from the report:
• 11 drilling rigs, representing 14 projects had left the Gulf of Mexico since April 2010.
• 91,000 jobs lost as a result of the Gulf moratorium.
• An estimated $18.3 billion of previously planned capital and operating expenditures didn’t occur in 2010 and 2011.
• Gulf oil production is projected by the Energy Information Administration to be down 12 percent in 2012 over 2010.

Those are stark numbers that reflect what happens when policy blocks and/or d... more »

Shell America's Marvin Odum and Alabama mine operator Ronnie Bryant would appear to have little in common. Odum oversees tens of thousands of employees, making decisions that are measurable in the billions of dollars. Bryant has permitting to open a new coal mine that would employ about 125 workers in Alabama.

No question, a galactic difference in scale. But there's at least one common point. Both run businesses that attract environmental attention.

Odum told a U.S. Chamber of Commerce audience last week that a recent lawsuit filed by environmental groups against the government, targeting the federal permitting process, could bring drilling in the Gulf of Mexico to a standstill:

"We are not named in the suit, but we have an interest in how it is resolved - as does every energy consumer in... more »

Nearly 190,000 new jobs and billions in economic growth could result in 2013 if development of offshore oil and natural gas in the Gulf of Mexico returns to where it was before last year's drilling moratorium, according to a new study.

The research by Quest Offshore Resources for API and the National Ocean Industries Association also details the impact of the administration's anti-drilling policies last year - including a moratorium on deepwater exploration, followed by a slowdown in new permits after the total ban was lifted. Quest estimates more than 60,000 jobs were lost primarily because of reduced Gulf spending by energy companies in response to administration policies.

Key findings:

• Total offshore-related oil and gas employment could hit 430,000 in 2013 if the permit slowdown is rev... more »

A fire on an offshore platform in the Gulf of Mexico created a media furor yesterday. Several of the initial news reports contained inaccuracies that tended to exacerbate America's heightened awareness of--and sensitivity to--offshore drilling. The reaction was predictable: Politicians demanded answers, and environmental groups called on the government to keep the drilling moratorium in effect.

As we've stated before on this blog, the oil and natural gas industry believes no accident is acceptable. Offshore workers are trained in the proper way to manage operations and are drilled in safety precautions. We're thankful that all 13 crew members on the platform are accounted for.

The Mariner Energy platform fire was an industrial accident that should not be compared to the Deepwater Horizon.... more »

Last week, Grant Thornton LLP released a study--"The implications of the oil spill on deepwater exploration and production"--that outlines the impacts of new, proposed offshore drilling regulations. The analysis found that these regulations would likely increase costs for Gulf energy exploration and production (E&P) businesses and adversely impact the future of Gulf offshore drilling.

The study states that "as a result of the oil spill, the future costs of drilling and operating in the Gulf will rise considerably" due to the following factors:

• Insurance increases, estimated to jump as much as 50 percent, resulting in higher daily drilling rates;
• Higher capital costs with investors and creditors demanding higher returns; and
• Significant regulation changes, such as removing the liability... more »