Scuttlebutt - the latest insights from OMSA

Obama’s Drilling Ban by the Numbers

July 12, 2011

Heritage Action for America posted the following today:

  • 33: the percent that capital spending dropped on account of the deepwater moratorium
  • 60,000: number of jobs lost due to the moratorium
  • 190,000: number of jobs that could be created by 2013 if the Gulf is open to drilling
  • 140: the percent that capital expenditures could increase by if the Gulf is open to drilling
  • 70: the percent increase that the offshore oil and gas industry would spend
  • 45 billion: total dollars of GDP contribution that would come from a return to drilling
  • 6: the number of months President Obama held a moratorium on offshore drilling
  • 9: the number of months since the moratorium was lifted, without a return to drilling
  • 33: the number of shallow-water permits for new wells issued since 6/8/2010
  • 5: the number of permits issued for deepwater wells that were in the process before moratorium
  • 1: the number of new deepwater wells issued since 10/12/2010

And let me add one more.

  • 0: what’s left of my patience.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


Turning up the HEAT

July 6, 2011

The House Energy Action Team is turning up the HEAT with a new video detailing the damage done to the economy caused by the Administration’s job-destroying energy policies. The video opens with the question “Fed up with prices at the pump?” While other countries explore and develop new energy supplies, the Obama Administration continues to keep American resources under lock and key. The video also highlights President Obama’s offer to make America the number one customer of Brazilian energy exports. To see the video in its entirety, click to watch below.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


President Gives Green Light and American Jobs to Foreign Owned and Operated Ships in U.S. Waters

June 23, 2011

Today, President Obama waived the Jones Act, thus importing foreign workers to take more American jobs.

It is mind boggling that the President would jeopardize national security by letting foreign owned and operated ships transport oil from our Strategic Petroleum Reserve to and from American ports. (Ironically, the President had earlier cited Libyan unrest as a national security emergency in order to tap those reserves.)

For more than a year, the Obama Administration has had a stranglehold on energy development in the Gulf of Mexico, which has put tens of thousands of Americans out of work. The Administration talks incessantly about the importance of safety and environmental compliance by industry, but when those regulations stand in the way of the President’s agenda, he doesn’t hesitate to do the opposite. Foreign-flagged vessels do not have to comply with U.S. safety and environmental standards. They do not pay U.S. taxes. And most certain, they do not employ U.S. workers.

Sometimes you just can’t explain stupid.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


Strategic Oil Reserves Drawn Down for Libya, but President Won’t Permit Oil Exploration in the Gulf of Mexico

June 23, 2011

After weeks of “secret meetings,” the President infused international markets with 30 million barrels of oil from our U.S. Strategic Petroleum Reserve. Was it to replace the half of 62+ million barrels of lost oil production in the Gulf of Mexico since he imposed a moratorium on domestic drilling 388 days ago? Not quite.

According to today’s press, the President is compensating for lost production resulting from the conflict in Libya. How dependent is the U.S. on oil imports from Libya? Of the 88 million barrels of oil we consume in one day, Libya provides us with a paltry 44,000 (0.05 percent).

What’s the real reason? The economy is tanking and American’s won’t let the President forget that they’re paying nearly $4 per gallon for gasoline.

Prior to the President’s drilling moratorium in the Gulf of Mexico over a year ago, the Gulf produced 1.7 million barrels of oil a day. Today, as a result of his policy directive, production will continue to drop precipitously — by 330,000 barrels a day in 2012, according to the Department of Energy.

Brazil? Libya? When will President Obama put Americans back to work drilling for American oil?

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


Victims of the Obama Drilling Moratorium

June 13, 2011

Heritage and the Institute for Energy Research recently sent a team to Louisiana to hear directly from the people most affected by the Administration’s de facto moratorium one year later. Their latest video reveals worker frustration, particularly with Obama for his words of praise about offshore drilling in Brazil while doing the opposite here at home.

We have to keep up the pressure. If you haven’t already signed our letter to President Obama, please link through to comment.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


Tagged ,

Why Americans Are Paying A Lot More for Gas: Political Will

June 3, 2011

Note: the following opinion was published in The Daily Caller (June 3) and in the National Review (June 8).

Just as America marked the first anniversary of the President’s blanket moratorium on all deepwater oil exploration in the Gulf of Mexico, we learned exactly how his administration manipulated its regulators to keep oil drilling idle for more than a year.

For months, Interior Secretary Ken Salazar used the Deepwater Horizon tragedy as the single excuse for his agency’s failure to issue permits for new oil exploration in the Gulf. But a new Oversight and Government Reform Committee report tells a different story.

It’s all about political will.

Ignoring key evidence and input from hundreds of energy exploration experts, Mr. Salazar suspended drilling on 33 deepwater wells and banned new drilling plans in the Gulf of Mexico. Mr. Salazar claimed that the moratorium had the backing of a panel of experts that the Obama administration had put together. But the report points to an “important White House official [who] changed the safety report [and] created the misleading appearance of scientific peer review.”

The report also noted the administration’s reckless disregard for the 400,000 Gulf Coast workers either directly or indirectly employed by the oil and gas industry. Rebecca Blank, Under Secretary at the Department of Commerce, testified that the administration never once studied the economic impact the moratorium would have on the Gulf Coast economy and on oil production.

Are we really expected to believe that the Administration’s ongoing de facto moratorium on oil exploration in the Gulf is because of one drilling rig accident — one out of 42,000 drill rig operations in the last 60 years? Of course not. Prohibiting all drilling and exploratory activities is akin to banning all airplanes because of one crash.

Clearly, the President hopes that banning oil exploration in the Gulf will decrease America’s energy demand by making gas more expensive. But it’s not working out that way.

The administration’s de facto moratorium on oil exploration in the Gulf has resulted in a complete reversal from where we were one year ago: Domestic production was at an all time high for the sixth year in a row; U.S. reliance on the Middle East lessened as oil imports from the region declined to less than 18 percent; and Americans were paying $2.86 per gallon.

The Obama-Salazar “let them drive hybrids” mentality is indicative of the disconnect between the White House and the public. There are 250 million cars in this country that don’t run on electricity from solar or wind; they run on oil. And because this President won’t let us drill for oil in the Gulf, there’s less of it — and American drivers are paying the price at the pump.

Safety is no longer an issue. Oilrig operators have already demonstrated that they can contain a BP-sized blowout. Yet the Administration has issued just one permit to drill in the Gulf of Mexico in the last 12 months. And one year later, the Interior Department is still mulling applications to resume previously approved, previously permitted and previously drilled wells.

As gas prices skyrocketed, the President feigned concessions by re-opening Alaska’s National Petroleum Reserves (NPR-A) to lease sales … that no one wants. The Bureau of Land Management offered 1.8 million acres last year and received bids on just 28,444 acres.

As if that’s not enough insult to injury, the President then said he would create a new team to expedite permits for approved drilling plans in the NPR-A — not the Gulf of Mexico, not for today’s Gulf lease holders, not for last year’s previously approved and permitted wells.

If the President truly wants to cut our dependence on foreign oil, reduce gas prices and create jobs, he could direct Interior Secretary Salazar to clear the backlog of oil exploration permit applications in the Gulf and expedite plans going forward.

But the President doesn’t want that. And that’s the point.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


One year later: All talk. No action.

May 27, 2011

Monday marks the one-year anniversary of one of the most-damaging decisions ever made by a Washington bureaucrat. On May 30, 2010, U.S. Interior Secretary Ken Salazar formally imposed a moratorium on deepwater drilling in the Gulf of Mexico.

That decision, with the full backing of President Obama, has been an economic disaster for America. It has propelled gas prices into the $4-a-gallon stratosphere, cost thousands of Gulf residents their jobs, and made the U.S. even more dependent on foreign oil.

With friends like that in Washington, Americans don’t need enemies.

The moratorium was a debacle from its very inception. When the Interior Department made the announcement, Mr. Salazar said his decision had the backing of a panel of experts that the Obama administration had assembled. But Mr. Salazar was wrong: All the experts had not agreed to the blanket moratorium. Some even said the moratorium could actually compromise safety.

Less than a month later, a federal judge struck down the moratorium as an overreaction by the government. Mr. Salazar’s response? Digging himself — and America — even deeper: He quickly instituted a second moratorium that was nearly identical to the first. That prompted the judge to hold the Interior Department in civil contempt.

Since then, Mr. Salazar has repeatedly claimed that the moratorium has been lifted, and that his office is working to approve oil drilling permits. But the thousands of idled Gulf workers — who are waiting on those permits — see little evidence that his office is doing anything.

Perhaps it’s appropriate then that a federal holiday falls on the one-year anniversary of Mr. Salazar’s moratorium. It’s an official day when those in his office won’t be doing their jobs.

Unfortunately, neither will Gulf workers.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


Federal Judge Orders Interior Secretary to Quicken the Pace (…Yet Again)

May 20, 2011

On Thursday, another federal judge compelled Secretary Salazar to stop dragging his feet on a decision that would permit Shell Oil to move forward with an offshore drilling program. This is the fourth such ruling from the bench in less than a year, when the administration imposed a “capricious and arbitrary” drilling moratorium in the Gulf of Mexico.

Time and again, we see the administration needing a legislative or judicial kick in the rear just to do its job. If Secretary Salazar would just do his — by reviewing offshore exploration plans and issuing permits in a reasonable and predictable timeframe — hundreds of thousands of Americans could get back to their jobs.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


BOEMRE Director Michael Bromwich Misleads Lawmakers, Nation on New Drilling Well Progress in the Gulf

May 18, 2011

Testifying before the Senate Energy and Natural Resources Committee yesterday, Michael Bromwich admitted to Senator Landrieu (D-La.) that his agency had issued only one permit in the last 13 months to drill a new exploratory well in the Gulf of Mexico. Prior to their exchange, he told lawmakers that BOEMRE “permitted 14 unique deepwater wells.”

Speaking to Mr. Bromwich, Senator Landrieu (D-La.) said:

“Based on a chart I got from your website—this is not my website—it says ‘zero’, ‘zero’, ‘zero’, ‘zero’ for deepwater wells in 2011. It doesn’t say ‘one’. It doesn’t say ‘two’. It doesn’t say ‘fourteen’. It says ‘zero’.”

See for yourself:

While Mr. Bromwich admitted that the 14 deepwater wells were “all previously permitted” for drilling more than year ago, he later corrected himself. (On March 30, BOEMRE granted its first deepwater drilling permit for a new well to Shell Offshore. None has been issued since.)

We should all be worried that the lead regulator of offshore drilling — Mr. Bromwich — is confused as to the number of new exploratory wells permitted by his agency. Is it that difficult to remember ‘one’?

Prior to Senator Landrieu’s pressing questions, Mr. Bromwich told lawmakers that, “We’ve actually permitted [14] unique deepwater wells on the average of about once every four to five business days. That’s not a significantly slower pace than has historically been the case.”

How does he sleep at night? Seriously.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


Today’s Offshore Marine Service Shout Out Goes to…

May 17, 2011

If you’re a frequent reader of (or better, RSS subscriber to) our Media Coverage Page, you know I’m tracking relevant industry news all day long.

From time to time, someone says something spot on about the President’s energy policy and the effect that it’s having on Gulf workers. I’d like to share these with you from time to time as a tribute to our allies who are fighting to get us back to work.

So, without further adieu, today’s shout out goes to Senate Minority Leader Mitch McConnell (R-Ky.), who slammed new White House plans to accelerate oil-and-gas development as a public relations stunt. Here’s what he said:

“Permits are what really matters, and by refusing to issue permits in any meaningful way, the administration is showing its true colors in this debate.

“If the administration were serious about increasing domestic energy production, it would increase leases — and address this administration’s de facto moratorium on permits.”

I couldn’t have said it better myself.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


President’s Weekly Address Shorts Gulf’s Offshore Marine Workers

May 16, 2011

(Note: The Hayride has published this post as a by-lined column that can be also be read here.)

President Obama used his weekly radio address this weekend to attempt to persuade Americans that “incremental expansions of existing policies” would lower gas prices, create jobs or make us less dependent on oil imports.

If the President were truly committed to domestic energy production, he would have instructed Interior Secretary Salazar to streamline permitting for Alaskan and Gulf of Mexico offshore drilling projects. There are no drilling projects in Alaska to permit, but there is a backlog of permits to resume deepwater drilling in the Gulf of Mexico.

Once again, President Obama is a day late and a dollar short. While paying lip service to lowering gas prices, he did not lift his administration’s de facto moratorium on oil drilling in the Gulf of Mexico. And he offered no sense of urgency towards getting Gulf workers back to exploring for domestic oil.

Mr. Obama simply offered “incremental expansions of existing policies.” With millions of Americans suffering thanks to the President’s engineered energy crisis, this is the best that he could do? It’s time for the Obama Administration to clearly act on every drilling permit that has been suspended for over a year.

We’re tired of the President getting in the way of a real solution for our nation. Let us go back to our jobs, producing domestic energy that will keep fuel prices lower and Americans less dependent on foreign oil.

Mr. President, you missed another opportunity to put us back on the right track.

On behalf of all Americans, we’d like to say: Thanks for nothing.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


Hang On, America. Mr. Bromwich is Taking Us All for a Bumpy Ride

May 13, 2011

(Note: The Hayride has published this post as a by-lined column that can be also be read here.)

Michael Bromwich, Director of the Bureau of Ocean Energy Management, Regulation and Enforcement, granted an interview Thursday to The Hill. It was a strange trip through his thinking on domestic oil production, and his job performance.

A few of the trip’s highlights:

Bromwich should be an expert in this. The Obama administration’s own oil-drilling policies have been repeatedly struck down. The latest came this week when a federal judge ruled that the Obama administration has “unlawfully and improperly delayed” permit applications for deepwater drilling in the Gulf of Mexico.

Yes, there’s no one more effective than a boss who asks lots of mundane questions while employees are trying to get their jobs done. Perhaps this explains the anemic pace of permit approvals.

  • Bromwich said he is not trying to shut down offshore production in the United States. “What could my possible personal or political motive for that be? Am I going to get a gold watch if I shut down the industry? I don’t think so.
  • “Nobody from the White House or anybody else has told me to do my job in any other way,” Bromwich said. “And so for people to attribute political motives or a political agenda to me when I have none in this job, there’s just a huge space between those claims and the reality.”

We’re not sure which is worse: Stalling domestic oil exploration because of a political agenda, or incompetent leadership.

The effects, however, are the same. Businesses are closing, employees are losing their jobs and the price of gasoline is skyrocketing.

Mr. Bromwich need not worry about getting a gold watch for his work. Thanks to his efforts, Americans couldn’t afford one anyway.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


Federal Court’s Summary Judgment Compels Obama Administration to Act on Deepwater Drilling Permits (…Again)

May 10, 2011 (Note: the following was issued as a statement to the media.)

A federal judge today ruled that the Obama administration has “unlawfully and improperly delayed” permit applications for deepwater drilling in the Gulf of Mexico.

U.S. District Judge Martin Feldman ordered the Obama administration to act within 30 days on permits that it has been dragging its feet on.

“Although the government has begun to issue some permit applications, plainly because of this lawsuit, the future of drilling in the Gulf of Mexico remains elusive; plaintiffs’ other long-pending permit applications speak loudly to this,” Judge Feldman wrote in his ruling. “Moreover, the government’s conduct of delay in deepwater drilling in the Gulf dramatically presents far more than the mere possibility of persistent and repetitious intentional delays in processing . . . permit applications.”

The judge added: “The government has presented no credible assurances that the permitting process will return to one marked by predictability and certainty. Processing a scant few applications is at best a tactical ploy in a real world setting.”
We could not have said it better. For months, the Obama administration has aggressively dug in its heels to maintain its de facto moratorium on oil drilling. We’ve only seen the administration move — reluctantly — when shoved.

Fortunately, there are some leaders willing to give the administration a firm push. Today, the House is voting on H.R. 1229, which would require the Interior Secretary to decide on a drilling permit within 30 days of receiving an application.
Clearly, a lot of folks think the Obama administration needs a kick in the pants — whether in the form of a court order or an act of Congress — to do its job.

Americans don’t expect government to solve our problems. But we do hope our government won’t be the cause of our problems. Right now, the Obama administration is not only causing problems — unemployment, higher gas prices, more dependence on foreign oil — but it’s standing in the way of a solution.

It’s time that Gulf workers got back to work exploring for domestic oil. Americans want it, Congressional leaders are demanding it, and a federal judge has ordered it. What more does the Obama administration need to do its job?

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


We’d All Rather Forget This Anniversary

May 6, 2010

Today is the anniversary that no one is celebrating. One year ago today, President Obama placed a moratorium on all offshore drilling in the Gulf of Mexico. The decision launched a year of misery for Americans at the gas pump, a year of hardship for 375,000 Gulf workers, and a year of bizarre statements by the White House.

Here’s what the past 365 days have seen:

  • Thousands of Gulf workers have lost their jobs, others have taken huge pay cuts, and everyone worries about how long they can hold out (see a short documentary on the bankruptcy of Seahawk Drilling here).
  • Gas prices have soared to $4 a gallon and threaten to hit to $5 a gallon by the summer. With transportation costs skyrocketing, prices for everything from food at the grocery store to clothes at department stores also have increased.
  • President Obama traveled to Brazil to tell its leaders that he was looking forward to importing more of their oil. “We want to help with technology and support to develop these oil reserves safely, and when you’re ready to start selling, we want to be one of your best customers,” Obama said.
  • Interior Secretary Ken Salazar told Congress that he was in favor of a “robust” oil and gas industry in this country — but then made it almost impossible to get a new drilling permit. He also told Congress that drilling rigs were not leaving the Gulf of Mexico — but rigs were leaving and drilling companies were going bankrupt. He said oil and gas production in the Gulf of Mexico was at an all-time high in March 2011 — but, in reality, production had fallen by over 30,000 barrels per day.

It’s all made for 365 days of pain. America is crying uncle. We’ve had enough.

One year is more than enough time for President Obama to end his de facto moratorium in the Gulf. It’s time he told his Washington bureaucrats to do their jobs — since they’re lucky enough to still have jobs — and start issuing deepwater drilling permits for new projects again. Let Gulf workers get back to work finding oil for America.

Now that would be one memorable anniversary gift to our nation.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


The Foundry Shares Why Obama’s Anti-Energy Policies Are Bankrupting America

May 5, 2011

Randall Stilley has witnessed firsthand the Obama administration’s job-killing agenda. As the president and chief executive of Seahawk Drilling, he had to lay off 632 employees before filing for bankruptcy — a direct result of President Barack Obama’s anti-energy policies.

Stilley’s company owned and operated 20 shallow-water rigs in the Gulf of Mexico. The lack of energy production — a consequence of Obama’s drilling moratorium and subsequent “permitorium” — led to Seahawk’s demise. Now he’s speaking out, sharing Seahawk’s story in a new video from Heritage and the Institute for Energy Research.

It’s an unfortunate example of how policies in Washington are harming American jobs and also squelching energy production at a time when consumers are paying $4-per-gallon for gasoline.

Read the Heritage Foundation’s blog posting in its entirety here.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


Hastings: Obama’s Stance Hurts American Energy

May 4, 2011

Congressman Hastings, chairman of the House Natural Resources Committee, penned a wonderful op-ed for today’s edition of Roll Call:

With gasoline prices quickly surging to $4 per gallon and beyond, pinching the pockets of families and business across the country, it’s no surprise that gasoline has become a regular talking point in President Barack Obama’s stump speech. Yet instead of offering real solutions, the president is telling the American people that there’s “not much we can do” about high prices. He’s waving the white flag of defeat — essentially telling Americans to get used to paying more than $4 for gasoline.

It’s not just about what President Obama can do tomorrow to address higher prices, it’s about what he’s done over the past two years to get us to this point. The president’s attempt to deflect criticism and his ‘don’t blame me’ attitude expose how out-of-touch he is with reality and the everyday needs of American families. President Obama has an energy plan — it’s just not one to increase American energy production. Instead, President Obama’s plan is to block, delay and tax American energy.

When President Obama took office, the national average price of gasoline was $1.84 per gallon — and it’s been steadily climbing ever since. That’s because over the past two years the Obama administration has never missed an opportunity to block access to our American energy resources. For example:

When President Obama was elected, nearly all of our offshore areas were open to offshore drilling. Since then, President Obama has systematically locked-up the entire Atlantic Coast, the Pacific Coast and much of Alaska — preventing the creation of over 1.2 million jobs.

The Obama administration imposed a real and then de facto moratorium on drilling in the Gulf of Mexico, which according to its own estimates cost 12,000 jobs.

The Obama administration has delayed permits for renewable energy projects, such as wind and solar, on public lands.

Just weeks after taking office, the Obama administration withdrew 77 areas available for oil and natural gas leasing in Utah — eventually leasing only 17 and cancelling 60. According to a Uintah County commissioner, this prevented the creation of approximately 3,000 jobs.

The Obama administration first delayed and then significantly altered the oil shale research, demonstration and development (RD&D) lease program. As a result, sales of these RD&D leases declined by 85 percent and cost high-tech jobs in Colorado, Wyoming and Utah.

The Obama administration’s Environmental Protection Agency retroactively withdrew an approved permit for a coal mine in West Virginia. This cost 250 jobs that were ready to get working to create more American energy.

The Obama administration is aggressively pursuing sweeping new changes to mining regulations. These regulations, according to calculations in the government’s own study, will cost thousands of American jobs and decrease American energy production in 22 states.

The Environmental Protection Agency ordered the cancellation of a permit for a Navajo Nation power plant in New Mexico that was expected to create 400 permanent jobs and generate $50 million per year in revenue.

The Obama administration is blocking several energy projects in Alaska. It is slow-walking permits for production in Alaska’s north slope, which is necessary to keep the Trans-Alaska Pipeline System (TAPS) running. The administration is also stopping permits for oil development in the National Petroleum Reserve-Alaska (NPR-A).

The Interior Department has announced it is considering proposals to regulate hydraulic fracturing on public lands — a technique currently regulated by states that is responsible for tremendous growth in natural gas production. This could severely restrict energy production on federal lands.

This list goes on and on and on.

It is because of these actions by the Obama administration that the Energy Information Administration projects an overall decline in U.S. oil production by 110,000 barrels per day in 2011 and 130,000 barrels per day in 2012.

The policies of the Obama administration are costing jobs, decreasing energy production and jeopardizing our national security by deepening our reliance on foreign energy. This is an indefensible energy record, and one that Americans should remember every time they fill up their cars.

Of course, one can always count on President Obama to fall back on his favorite solution to all our energy problems: tax, tax, tax. Last Congress, the president was out front and center pushing for a job-destroying cap-and-trade national energy tax, which even he said would make prices “necessarily skyrocket.”

While the president continues to support this national energy tax, he’s also advocating for increasing taxes on American energy producers. Yet the White House has admitted this will do nothing to lower gasoline prices. In fact, it will have exactly the opposite effect — raising energy prices further when families can least afford it.

This week, Republicans in the House of Representatives will begin voting on a series of bills to expand offshore American energy production, create jobs and lower gasoline prices. Unlike President Obama, House Republicans have heard the American people’s demand for increased American energy production and we’re ready to act.

If the president wants to seriously address rising gasoline prices, he should abandon his block, delay and tax approach to American energy and work with us to pass this important energy legislation.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


Vitter’s Revenge

May 3, 2011

Today, our great Gulf champion—Senator David Vitter—stepped up to challenge Michael Bromwich’s power grab. The director announced yesterday that BOEMER will expand its oversight of coastal drilling to include new regulation of oil field service firms, rig suppliers and other offshore contractors. The money quote is on page two of the Senator’s letter:

“Again, you have on multiple occasions claimed to be understaffed, yet now—despite these claims—you appear to have adequate staff to expand BOEMRE’s jurisdiction and responsibility.”

The letter follows in its entirety.


Fox News’ Your World with Neil Cavuto Features Jim Adams

April 27, 2011

The following segment ran today at 3:00 p.m. CDT

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


The Audacity of Dope

April 27, 2011

Faced with Americans’ anger about skyrocketing gas prices, President Obama is begging Middle Eastern regimes for more imported oil. This isn’t leadership.

Americans don’t want to be even more dependent on foreign oil. They’re embarrassed when their President nags Saudi Arabia for more oil or tells Brazil he wants to be one of its “best customers.”

Americans want oil produced in the United States by American workers. We have that capability, if only President Obama would allow it.

Thousands of Gulf workers are ready to drill for U.S. oil now. The Obama administration simply needs to issue the permits needed to put them to work now.

Let’s explore what we have in the United States before we grovel to the rest of the world.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association

This statement was released to the media this morning.


Skyrocketing Gas Prices: No Day at the Beach…Literally

April 26, 2011

On Friday, the Coast Guard released a report blaming Transocean (the owner of the Deepwater Horizon) for poor maintenance and insufficient training in last year’s Gulf of Mexico disaster. This follows an earlier report written by White House Spill Commission Chief Counsel Fred Bartlit, which concluded that the Deepwater Horizon spill was “an entirely preventable disaster.”

“What the investigation makes clear, above all else, is that management failures, not mechanical failings, were the ultimate source of the disaster,” Mr. Bartlit wrote. “Better management of personnel, risk, and communications…would almost certainly have prevented the blowout. The Macondo disaster was not inevitable.”

Others agreed. BOEMRE’s own experts from the National Academy of Engineers did not support stopping ongoing drilling and characterized the government’s moratorium as being counter-productive to safety.

Yet here we are today with the Obama administration still withholding deep-water drilling permits. Thousands of jobs have been lost in the Gulf and the government (read: the American taxpayer) has lost billions in revenue.

Americans, meanwhile, are paying $4 a gallon for gasoline. Next up: Summer vacations and $5-a-gallon prices.

Does anyone remember paying $1.81 a gallon? That’s what gas cost when President Obama took office in January 2008.

Perhaps someone should tell him we’re headed in the wrong direction.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


Guilty as charged

April 21, 2011

As noted earlier, Micheal Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, denied this week that the Obama administration prolonged a moratorium on the oil industry’s deepwater activities following the Gulf Coast oil spill last year.

To quote Forbes’ Christopher Helman, “Am I wrong to consider a lack of permits to be evidence of an effort not to issue permits?”

Rather than buckling down and actually approving permits, Bromwich gave a speech on Tuesday at the Center for Strategic and International Studies. He didn’t announce any new permits, he just complained about those of us trying to get idle Gulf workers back to exploring for oil. He called it “sniping.” I call it “dealing in reality.”

Of course, Bromwich left out a few pertinent facts in his speech:

  1. The Obama administration shut down oil exploration in the Gulf’s deep waters for an entire year — penalizing not one, but all operators.
  2. The Obama administration was not only found in contempt of court but also later slapped with an injunction for ignoring a federal order. Judge Feldman found that the President’s moratorium on deepwater drilling in the Gulf of Mexico was “arbitrary and capricious.”
  3. The Obama administration handicapped the livelihoods of 320,000 Louisiana workers hired directly or indirectly by the oil and gas industry — penalizing not a few, but all employees.

    Yesterday’s Fuel Fix reported on a number of residents suffering because of the President’s energy policies. Here’s just one example, “The moratorium hurt us as much as the spill hurt us,” said Tony Alford, president of the South Central Industrial Association, which represents 200 businesses in four southern Louisiana parishes. “Even a year later, we’re still feeling the effects. There’s still some anger at BP, but it’s more of a government thing now.”

  4. The Obama administration’s energy policy has made us more dependent on foreign, unstable nations to meet our energy needs — jeopardizing the energy and national security protection of all Americans.

    In 2010, the United States reduced its reliance on foreign oil imports from 57 percent of consumption in 2008 to 49 percent. The Obama administration’s de facto moratorium has reversed that trend. The Obama administration’s own Energy Information Agency forecasts that liquid fuel net imports will average 9.5 million barrels a day in 2011 and increase to 9.9 million barrels a day (51 percent of total consumption) in 2012.

  5. The EIA continues to report that production in the Gulf of Mexico is in decline “due partly to the moratorium and restricted permitting.” EIA expects production from the Federal Gulf of Mexico (GOM) to fall by 190,000 barrels a day in both 2011 and 2012. Energy consultancy Wood Mackenzie puts that loss closer to 375,000 barrels a day.

Source: Department of Energy, Energy Information Agency, Short-term Energy Outlook for April 2011

Mr. President, Secretary Salazar and Director Bromwich, if holding you accountable is “sniping,” I plead guilty.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


American Idle

April 21, 2011

Bureau of Ocean Energy Management, Regulation and Enforcement director Michael Bromwich this week complained of “sniping from certain public officials and industry trade associations” who call out the Obama administration for crippling oil exploration in the Gulf of Mexico.

Bromwich should spend less time trying to silence public criticism and more time actually approving drilling permits.

At the very least, he should get his story straight. On the one hand, Bromwich says drilling permits are not being delayed. On the other hand, he says Congress is not providing the funding his department needs to approve permits in a timely fashion.

Which is it?

This bureaucratic double-talk would be laughable if thousands of Gulf workers weren’t sitting idle, or if Americans weren’t paying $4 a gallon for gasoline.

Americans are fed up with double talk, they’re tired of excuses, and they’re sick of bureaucrats making speeches instead of taking action. Americans can’t afford more permitting delays because they can’t afford $4-a-gallon gasoline.

There’s a way Bromwich could stop the criticism that seems to bother him so much. He could simply do his job.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


How we will end up paying $6 a gallon for gas

April 16, 2011

Note: this opinion editorial was originally published by the Washington Examiner yesterday.

Someday, you will be pumping gas, staring at the digital numbers racing by, and you’ll wonder: “How could I possibly be paying $6 a gallon for gasoline?”

You also will be wondering why so many of your friends and relatives are still looking for work. Or why America is more dependent on foreign oil than ever before.

If you look back to today, you’ll remember why: President Obama’s de facto moratorium on deepwater drilling in the Gulf of Mexico.

You’ll recall how Gulf workers had begged the White House to approve new permits for oil exploration. They were losing their jobs and gas prices were soaring. It made sense to get everyone back to work exploring for oil in the Gulf.

Obama responded from the Bizarro World. He said he wanted to cut America’s dependence on foreign oil. Then his administration effectively blocked U.S. offshore exploration, refusing to approve but a handful of deepwater permits in the Gulf. He said he wanted incentives for domestic drilling, then sought new limits on drilling leases.

Oh, yes, Obama did call for more drilling in 2011… in Brazil. He traveled there to tell Brazil’s leaders that he was looking forward to importing more of their oil. “We want to help with technology and support to develop these oil reserves safely, and when you’re ready to start selling, we want to be one of your best customers,” Obama said.

Interior Secretary Ken Salazar, meanwhile, told Congress that he was in favor of a “robust” oil and gas industry in this country – but then made it almost impossible to get a new drilling permit.

He told Congress that drilling rigs were not leaving the Gulf of Mexico – but rigs were leaving and drilling companies were going bankrupt. He said oil and gas production in the Gulf of Mexico was at an all-time high in March 2011 – but, in reality, production had fallen by over 30,000 barrels per day.

Not surprisingly, gas prices skyrocketing, hitting $4 a gallon in the spring of 2011 and then $5 a gallon in the summer. With transportation costs soaring, prices for everything from food at the grocery store to shirts at department store also increased.

Obama repeatedly told Americans that he was doing something about rising gas prices, and that he had lifted the offshore drilling moratorium in the Gulf. But, in fact, his administration’s de facto moratorium was alive and well and working just as activists hoped — pushing American gas prices to European levels.

And here you are now, pumping $6-a-gallon gasoline and worrying about your unemployed friends and relatives. America is now more dependent than ever on foreign oil – and one of Brazil’s “best customers.”

If someone had just done something back in the spring of 2011, you wouldn’t be in this mess now. If you only knew then …

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


The Obama Administration’s Moratorium on Transparency

April 15, 2011

The Obama Administration says it will no longer issue press releases announcing new permits for deepwater oil drilling. It seems the Administration believes that issuing one permit every 12 months for new deepwater exploration is routine and no longer news.

We have some news for the President: We are not back to normal by any measure. Gulf workers are idle as Americans are paying more than $4 a gallon for gasoline. And absent any intervention to lift the de facto moratorium on oil drilling, Americans will soon be paying $5 to $6 a gallon. Time to get out your bikes, buggies and beeswax candles.

Americans are already cutting back on driving; summer vacation plans will be next. Airfares are rising, and so are prices for food and consumer products. The only things that are falling are Americans’ disposable incomes and the President’s approval ratings.

Of course, there’s a simple solution to putting us back on the road to lower gas prices: offshore drilling.

President Obama appears to have no qualms about offshore drilling, as long as it’s done somewhere else. Earlier this year, he told Brazil’s leaders that he was looking forward to importing more of their oil. “We want to help with technology and support to develop these oil reserves safely, and when you’re ready to start selling, we want to be one of your best customers,” Obama said.

Yes, it seems we won’t be seeing any more headlines on permit approvals in the Gulf. Here’s another headline you won’t see on a White House press release: Americans Suffer as Obama Administration Ignores Simple Solution.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


You Don’t Need a Nobel Prize to Know Less Oil Means Higher Prices

April 7, 2011

You Don’t Need a Nobel Prize to Know Less Oil Means Higher Prices

Statement from Jim Adams, President and CEO,
Offshore Marine Service Association

(New Orleans, Louisiana) — April 7, 2011 — With oil prices soaring to $110 a barrel, Jim Adams, president of the Offshore Marine Service Association, released this statement:

“President Obama has long since forgotten Gulf workers, who are suffering as his administration chokes off new permits for offshore drilling. Now other Americans can rightly wonder whether he has forgotten about them too. Maybe if President Obama had to fill his car each week he’d understand the pain that all Americans are feeling now.

“It doesn’t take a Nobel Prize winner to understand that when you don’t permit new drilling, you’re going to find less oil and prices will rise. It’s time for President Obama to level with the American people and admit that his policies are designed to increase prices for oil so demand will decline.

“Americans are right to ask whether President Obama has their best interests at heart. If he did, the President would once again allow deepwater drilling in the Gulf of Mexico — so oil prices would drop and America would be less dependent on foreign oil.

“Americans want more domestic oil and lower gas prices. Unfortunately, that’s not what the President’s policies are designed to deliver.”

OMSA represents the owners and operators of U.S. flag offshore service vessels and the shipyards and other businesses that support that industry.

# # #


OMSA Responds to President’s Plan for Energy Security

March 30, 2011

Statement from Jim Adams, President and CEO,
Offshore Marine Service Association

(New Orleans, Louisiana) — March 30, 2011 — In response to remarks made by the President today during his speech on energy security, Jim Adams, president and CEO of the Offshore Marine Service Association (OMSA), issued the follow statement:

“Once again, President Obama is sending us into the Bizarro World. He says he wants to cut America’s dependence on foreign oil, then his administration refuses to approve but a handful of deepwater drilling permits in the Gulf of Mexico.

“The President says he wants incentives for domestic drilling, then seeks new limits on drilling leases.

“Even Superman could not find his way out of this convoluted logic.

“It’s time President Obama got back to the real world and offered a real solution to rising gas prices and our nation’s growing dependence on foreign oil. Let Gulf workers get back to exploring for oil in America’s waters.

“We’ve said it before and we’ll say it again: It’s the permits, stupid.”

OMSA represents the owners and operators of U.S. flag offshore service vessels and the shipyards and other businesses that support that industry.

# # #


OMSA Responds to Interior Report On Idle Leases in the Gulf

March 29, 2011

Statement from Jim Adams, President and CEO,
Offshore Marine Service Association

(New Orleans, Louisiana) — March 29, 2011 — In response to Interior’s report on idle leases in the Gulf of Mexico, Jim Adams, president and CEO of the Offshore Marine Service Association (OMSA), issued the follow statement:

“The Obama administration first puts a moratorium on drilling permits, then blames the industry for not exploring for oil. They can’t have it both ways.

“Why would an oil company pay to lease an area to explore, then not explore it? That might make sense to the Obama administration, but it doesn’t make sense to anyone else.

“Americans know hypocrisy when they see it. Instead of trying to shift blame for rising gas prices, the Obama administration should do something about them. Let Gulf workers get back to work and start exploring for oil again.

“America needs new permits from the Obama administration, not new excuses.

“Companies aren’t exploring for oil because the White House won’t let them. It’s the permits, stupid.”

OMSA represents the owners and operators of U.S. flag offshore service vessels and the shipyards and other businesses that support that industry.

# # #


On Today’s Permit News

March 24, 2011

News broke today that the Obama administration issued a single deepwater permit to explore oil in the Gulf of Mexico. It should say something that this is considered news… something extraordinary… like Man Bites Dog.

It’s been 301 days since the Obama Administration imposed a six-month moratorium on offshore drilling, and 163 days since it “ended.”  Now President Obama is making news for issuing the first new deepwater exploration permit. Yet while the Obama administration is calling reporters to tout a single permit, businesses are closing, employees are losing their jobs and the price of gasoline continues to rise.

Anyone who needs evidence of this need only read today’s Washington Post. Turn to page A19 and see what the Obama administration’s policies have wrought.

How to kill my company

By Randy Stilley

Last month, Seahawk Drilling declared Chapter 11 bankruptcy and announced the sale of its assets to shallow-water driller Hercules Offshore. This devastating decision was the culmination of a long period in which we found our customers unable to secure permits for work in the Gulf of Mexico despite the fact that both our industry and our company have excellent safety records. In the 11 months after the Deepwater Horizon accident, it became clear that Seahawk’s greatest rival was no longer our industry competitors but the U.S. government.

The government’s drastic slowdown in the issuance of permits for shallow-water drilling operations — in which companies work in familiar geological formations, typically in less than 500 feet of water, mostly seeking to produce natural gas — has all but crippled the industry. The survivors (for now) like Hercules are staying afloat largely thanks to revenue from operations outside U.S. waters. Put another way, a once-proud industry born in the gulf during the Truman administration can no longer survive on operations in its own back yard.

You can read the full op-ed here, because you certainly won’t read about this in any White House press release.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


The Obamatorium on Offshore Drilling: 301 Days and Counting

March 24, 2011

Statement from Jim Adams, President and CEO,
Offshore Marine Service Association

The Obamatorium on Offshore Drilling: 301 Days and Counting

(New Orleans, Louisiana) – March 24, 2011 “It’s been 301 days since the Obama Administration imposed a 6-month moratorium on offshore drilling, and 163 days since they ‘ended’ it. And now President Obama wants credit for issuing the first new deep water exploration permit,” Jim Adams, President and CEO Offshore Marine Service Association said today. “One permit, two or three permits being served crumb by crumb is not enough.”

“We need an Administration that wants to provide the regulatory clarity that enables companies to plan and employees to know they will have work,” said Adams. “While the Obama administration is busy patting itself on the back for a single permit, businesses are closing, employees are losing their jobs and the price of gasoline continues to rise.”

“It’s time for the Obama Administration to support the American offshore energy industry with the same enthusiasm that it heaps upon Brazilian offshore companies and Brazilian offshore workers.”

OMSA represents the owners and operators of U.S. flag offshore service vessels and the shipyards and other businesses that support that industry.

# # #


OMSA Responds to BOEMER’s Third “Permit”

March 18, 2011

Statement from Jim Adams, President and CEO,
Offshore Marine Service Association

Fact: Secretary Salazar Is Not Issuing New Deepwater Permits

Interior Is Allowing Existing Permit Holders to Resume Exploration in the Gulf of Mexico

(New Orleans, Louisiana) — March 18, 2011 — Jim Adams, president and CEO of the Offshore Marine Service Association (OMSA), said that BOEMER’s late day announcement that it has issued an additional permit for deepwater drilling is misleading.

“There were 32 deepwater drilling operations already permitted when the President imposed his moratorium last year. Interior Secretary Salazar is merely allowing existing permit holders to resume their operations,” said Adams. “This administration has yet to approve and permit a new deepwater exploration proposal submitted in the last 11 months.”

Adams continued, “Secretary Salazar is treating Gulf workers like peasants, tossing us work crumb by crumb and expecting us to be grateful,” Adams said. “We’re tired of fighting for scraps. We want to get back to work—all of us, not just a handful of crews.”

Adams noted that Secretary Salazar’s latest announcement follows on the heels of another round of Congressional hearings this week on the Obama administration’s de facto moratorium on deepwater drilling in the Gulf.

“It still takes Congressional intervention or court orders to compel the Interior Department to issue a scant number of ‘permits’,” Adams said. “And still, energy producers don’t have a clear picture of what it takes—or how long it takes—to satisfy Secretary Salazar.”

“No one is sure what Secretary Salazar really wants,” Adams added. “All we want is to get back to work.”

OMSA represents the owners and operators of U.S. flag offshore service vessels and the shipyards and other businesses that support that industry.

# # #


Jim Adams Testimony Before Energy & Power Subcommittee

March 17, 2011

James L. Adams
President and CEO
Offshore Marine Service Association

Energy & Power Subcommittee
Energy & Commerce Committee
United States House of Representatives

THE AMERICAN ENERGY INITIATIVE

March 17, 2011

Mr. Chairman and Members of the Subcommittee:

As the President and CEO of the Offshore Marine Service Association (OMSA), I am grateful for the opportunity to describe the devastating economic impact of the Obama Administration’s deliberate policies to curtail oil and gas production in the Gulf of Mexico. OMSA represents more than 250 companies, including approximately 100 firms that own and operate marine service vessels in the Gulf of Mexico. These vessels connect America with its offshore energy resources, providing every pipe, wrench, computer, barrel of fuel, and gallon of drinking water to offshore rigs and platforms. When the industry is fully functioning, our members transport tens of thousands of workers to and from offshore facilities.

Mr. Chairman, let me begin by expressing the deep appreciation of my members for the attention that you and your Subcommittee have given to the dire situation facing our industry in the Gulf of Mexico. And, in particular, we want to acknowledge the heroic efforts of Congressmen Steve Scalise and Gene Green of this Subcommittee, both of whom have used every available opportunity to ensure that this industry’s voice is being heard at the highest levels of our Federal government.

Mr. Chairman, after the Macondo tragedy in April of last year, Secretary of the Interior Ken Salazar famously said that he “would keep his boot on the neck of BP.” We quickly learned that his real intention was to keep his boot on the neck of every business owner and worker engaged in the offshore oil and gas industry. With the full support and guidance of the White House, he has effectively and ruthlessly shut down our industry – an industry that is vital to the economic health of this country. Drilling rigs sit idle, offshore supply vessels are moored to the dock, and layoffs mount. President Obama and Secretary Salazar say that they support domestic oil and gas development in this country. But, we all know better. Every day for the past 11 months, jobs have been lost and companies threatened because of the casual indifference of this Administration towards our industry and the families that depend on it. We are witnessing the systematic decapitalization of a strategic domestic industry.

We often ask ourselves – what will it take to turn this Administration around? What will it take for this Administration to let our people go back to work? Maybe unrest in North Africa and the Middle East will spur them to action. Or, maybe the specter of $4 per gallon gas at the pump will cause them to change course. Maybe another recession caused by a huge spike in energy costs will do the trick. Not likely. The Obama Administration’s “solution” is to suggest tapping the Strategic Petroleum Reserve and investigate price gouging. I am sure that will come as reassuring news to the thousands of hard-working Americans who have lost their jobs all across the Gulf Coast as a result of the post-Macondo policies of this Administration. We all know what the real solution is. The real solution is to reverse the job-killing, illegal and unjustified policies of this Administration and get the offshore oil and gas industry back to work in the Gulf of Mexico.

Mr. Chairman, some have suggested that this is a partisan issue. But, Democrats and Republicans alike have called for an immediate end to the belligerent treatment of our industry by this Administration. Former President Bill Clinton, Senator Mary Landrieu, Senator Mark Begich, and Congressman Gene Green, all proud Democrats, have called on this Administration to stand down. They understand, like many of their Democratic and Republican colleagues, that our industry is vital for economic growth. They understand that we cannot continue to rely so heavily on foreign sources for oil and gas – particularly in the face of the escalating turmoil in Libya and other oil-producing countries. They understand that our national security is put at risk when we dismantle an industry that forms the basis for much of America’s security at home and abroad.

Before the Macondo incident, my members operated over 1,200 vessels that serviced the 33 deep water rigs, nearly 50 shallow water rigs, and almost 4,000 fixed platforms in operation in the Gulf of Mexico at that time. Those vessels collectively provide approximately $4.6 billion annually in wages, and represent an investment by the offshore service industry of over $18 billion. Those vessels and the shipyards that build and repair these vessels had direct employment of at least 29,000 workers. Additionally, approximately 103,160 jobs are supported by the economic activities of these U.S. shipbuilders and offshore vessel operators with an average salary of almost $44,000 plus benefits. The Federal government collected nearly $1.4 billion annually in taxes directly and indirectly in 2008 due to the operations of these two industries. With the massive reduction in vessel and shipyard revenue and employment, these tax payments will certainly be reduced in 2010.

We were preparing to build even more vessels and hire more crew members as projections indicated that as many as 45 deep water rigs were to have been in operation in the Gulf of Mexico by the end of 2011. But, as we all know, in an unprecedented step, this Administration issued in May of last year a drilling moratorium bringing to an immediate halt all shallow and deep water drilling activities in the Gulf. Afterwards, the Administration, with great fanfare, told the public that the shallow water moratorium was ‘lifted’ after 30 days. It subsequently announced in October that the deep water moratorium was also ‘rescinded’. Does anyone think that these pronouncements by this Administration were designed to lead to a renewal of drilling activity in the Gulf? Not likely. In fact, in direct contradiction to its numerous assurances to the public, this Administration simply imposed a de facto drilling moratorium that kept drilling activity at a virtual standstill.

Like any market, the number of vessels and employees engaged in the offshore service industry will expand or contract based upon customer demands. In this case, the Department of Interior dictated that our customers’ activities in the deepwater exploration sector should shrink from 33 rigs to none for ten months. In the shallow water sector, the Administration reduced normal exploration activities by over two-thirds. As a result, we are seeing industry-wide vessel utilization rates that are about 50% of the industry’s capacity and that have resulted, for the time being, in overall employment reductions of 25%. It is important to point out that while employment reductions have trailed vessel utilization rates, this ratio will not last. Business owners who are struggling to retain highly-skilled employees for as long as possible will be forced into making more layoffs in the coming months. Without exploration permits, the market will further contract. Due to the Administration’s policies, we are witnessing the de-capitalization of the American offshore industry.

The moratorium is already responsible for exporting some of our most expensive and technologically capable U.S.-flag vessels to serve in foreign markets. To date, approximately 50 larger vessels that employed over 1,100 American crew members have left the Gulf of Mexico. On the highly technical vessels, those crew members enjoyed the highest compensation levels in our service industry, averaging over $75,000 per crew member.

The human toll on employees and their families who depend on this industry is simply enormous. These are the same families that struggled mightily to recover from the devastating Gulf hurricane season of 2005. Many were just getting back on their feet financially, only to be taken down again, taken down by the Obama Administration’s de facto drilling moratorium. The economics of this situation are pretty simple. When there are no drilling rigs operating in the Gulf, there is no work for our offshore service vessels and there are no jobs for our crews. When no rigs are operating in the Gulf, the very existence of the offshore service sector is threatened.

Mr. Chairman, after having watched this horrible scenario unfold, several prominent members of OMSA brought suit in Federal court against Secretary Salazar seeking to set aside his destructive de facto drilling moratorium. Judge Martin Feldman, having carefully reviewed the facts and the law, promptly issued an injunction prohibiting the Administration from enforcing its moratorium. But, with his boot still firmly planted on our neck, Secretary Salazar defied the Judge’s order and issued a second, virtually identical moratorium. This defiant act led Judge Feldman to find Secretary Salazar in contempt. But, notwithstanding the Judge’s orders, the de facto moratorium continues in full force and effect. Secretary Salazar is brazenly ignoring a Federal court order and very few drilling permits are being issued.

Production in the Gulf of Mexico is clearly headed downward. The futures markets and the prices at the pump do not reflect past production levels. They instead reflect on the likely future supplies from exploration and development activities occurring today. Energy Department estimates show that the average Gulf of Mexico production levels are now falling at a precipitous rate. The Administration has dictated that the Gulf will produce less oil and gas, and the market knows it. Pressure from Federal court orders and Congressional oversight to date has yielded some, but not enough, progress to restore drilling operations in the Gulf. The industry requires certainty in order to commit sufficient capital and other resources to drilling new wells and undertaking other offshore development.

So, Mr. Chairman, I am here to request that your Subcommittee and this Congress act immediately to get the Gulf of Mexico back to work. We urge you to move legislation at the earliest possible date that would streamline the drilling permit process and remove the ability of this Administration to frustrate the timely and appropriate issuance of drilling permits. We understand that additional safeguards need to be implemented in the wake of last year’s disaster. But, a complete shut down of the process is unconscionable and unacceptable. We therefore believe that legislation is desperately needed to open up that process and get our vessels and our people back to work. Our members and others in this industry would be pleased to work with you and the Subcommittee on this important initiative.

Mr. Chairman, it is time for the blockade of the oil and gas industry to stop. Our industry creates thousands of good-paying jobs for hard-working Americans. We provide reliable and affordable energy supplies. We generate billions of dollars in tax revenue for Federal, state and local governments. And, above all, we enhance the national security of this country by reducing our dependence on unreliable and often unfriendly foreign sources of oil. We are ready with drilling rigs, vessels, and experienced personnel to restore high levels of oil and gas production in the Gulf of Mexico – and to do it safely and efficiently. President Obama’s moratorium needs to end because it is killing jobs, raising the price of energy and making our country vulnerable to unpredictable international political forces.

Mr. Chairman, thank you for inviting me to appear before your Subcommittee today. I will be pleased to answer any questions that you or members of the Subcommittee may have.


Sam Giberga Testimony Before House Natural Resources Committee

March 16, 2011

Samuel A. Giberga
Senior Vice President and General Counsel
Hornbeck Offshore Services, Inc.

Natural Resources Committee
United States House of Representatives

OBAMA ADMINISTRATION’S
DE FACTO MORATORIUM IN THE GULF OF MEXICO:
COMMUNITY AND ECONOMIC IMPACTS


Mr. Chairman and Members of the Committee:

As the Senior Vice President and General Counsel of Hornbeck Offshore Services, Inc. (Hornbeck), and on behalf of the member companies of the Offshore Marine Service Association (OMSA), I appreciate the opportunity you have provided today to address the devastating short and long-term impacts resulting from the decisions made by the Obama Administration to shut down oil and gas production activities in the Gulf of Mexico.

Mr. Chairman, on behalf of the employees of my company and thousands of others who make their living in the offshore oil and gas industry, I am simply here to ask for your help. We have fought this Administration in the Federal courts. We have fought this Administration in Congress.  We have fought this Administration in the media.  And, yet as we sit here today, in defiance of Federal court orders and repeated bipartisan requests from Congress, this Administration continues to pursue a destructive policy struck down by a Federal court, despite the court’s admonition holding the Department of the Interior in contempt of court.  Their strategy is cynical, but so far, amazingly successful. Secretary of the Interior Ken Salazar tells your Committee that he is in favor of a “robust” oil and gas industry in this country – but then aggressively blocks the issuance of drilling permits.  Secretary Salazar tells your Committee that drilling rigs are not leaving the Gulf of Mexico – but at least 12 rigs have left and more are expected to follow, and one drilling company has been forced into bankruptcy.  Secretary Salazar tells your Committee that oil and gas production in the Gulf of Mexico is at an all-time high – but the fact is that, as a result of Administration policies, production in the Gulf has fallen by over 30,000 barrels per day.  So, for public consumption, this Administration paints a rosy scenario and hopes that nobody will take notice that an entire industry is being dismantled, rig by rig, vessel by vessel, employee by employee.  Mr. Chairman, I can assure you that we have noticed. And, we need your help before it is too late. We need your help to make sure the American people understand the outrageous and illegal behavior of this Administration as it pursues an extreme philosophy despite the country’s need for domestic oil and gas resources.   We need your help to make the Administration realize that the oil and gas resources in the Gulf of Mexico are the real strategic petroleum reserve of our Nation.  We need your help to take whatever steps are necessary to stop this Administration before it completely destroys our industry while putting our national and economic security at great risk.  Those risks are readily evident – all one has to do is turn on the television to any news broadcast.  The price of oil has skyrocketed to over $100 per barrel.  The price of gas at the pump is rapidly approaching $4.00 per gallon.  The Middle East and North Africa remain in turmoil.   And what is our Administration’s response?  It turns a blind eye to these risks.  It pursues an extremist policy designed to eliminate our industry.  Mr. Chairman, we cannot let that happen.

Hornbeck Offshore Services is one of the many proud participants in that offshore industry.  The Hornbeck story is not unlike that of many companies that have been formed over the last 50 years to serve the needs of the offshore oil and gas industry.  Todd Hornbeck, the founder of the company, was 27 years old when he started Hornbeck in 1997.  After gaining experience through working with his father’s offshore service company, Mr. Hornbeck formed our company in order to provide support services to meet the needs in the next expanding phase of offshore drilling – in the deepwater regions of the Gulf of Mexico.  Today, Hornbeck is the second largest deepwater supply vessel company in the Gulf of Mexico with a fleet of new generation offshore supply vessels operating off the United States and other locations around the world.  Additionally, Hornbeck owns and operates the two largest supply vessels and two of the most advanced deepwater construction vessels in the world.  These four vessels alone represent nearly a $500 million capital investment by Hornbeck, and were vital components in the operational response to the DEEPWATER HORIZON incident.  Hornbeck directly and indirectly employs thousands of workers and mariners, has spent billions of dollars in U.S. shipyards, and like many other companies in our industry, has invested millions of dollars to ensure safe and environmentally sound operations.  Concerning company employment, Hornbeck has consistently added jobs within the company since its founding in 1997, and had planned to increase company employment in 2010 and 2011.  With the de facto moratorium in place, not only has Hornbeck been unable to add any jobs in the last year, but it has been forced for the first time to reduce its workforce as a result of the significant slowdown in offshore drilling activity in the Gulf.

The DEEPWATER HORIZON incident and the current (and completely avoidable) offshore energy crisis in the Gulf of Mexico are unprecedented events for our country and for companies like Hornbeck that strive each day to work in a safe and environmentally sound manner in the offshore industry.  We understand that changes must be made, but the Administration’s response to the Gulf oil spill has been unreasonable, unwarranted, unfair, and unlawful. The resulting de facto moratorium on drilling activities in the Gulf threatens the livelihood of hundreds of thousands of American workers and significantly undermines critical energy, security, economic and other national policy interests.

The Administration repeatedly tells us that the offshore drilling moratorium has been lifted and that there is no de facto moratorium.  On the contrary, the moratorium on offshore drilling is alive and well.  Since its implementation in May 2010, there has only been one permit issued to resume the drilling of a deepwater well, and shallow water activity has been drastically curtailed.  As a result, the Administration’s policies have already taken a terrible economic toll on the Gulf Coast.  This industry supports 150,000 high paying jobs.  At least 8,000 jobs have already been lost and more layoffs are being made each week. Seahawk Drilling, the second largest shallow water drilling company in the Gulf of Mexico, declared bankruptcy a few weeks ago for one overriding reason – a lack of drilling permits. Bear in mind, Mr. Chairman, that Seahawk only drills in the shallow waters of the Gulf and had absolutely nothing to do with the DEEPWATER HORIZON spill. Yet, the Administration has forced that company and its 1,000 employees out of business. We fear that more bankruptcies will follow if the Administration does not immediately change course.

And yet, the Administration continues to ignore the truth.  Mr. Chairman, your Committee observed that first-hand when Secretary Salazar testified that Gulf of Mexico production has “remained at an all time high”.  Hornbeck was pleased that your Committee quickly corrected the Secretary and advised the public that Department of Energy data tells a drastically different story about declining production in the Gulf.  Without a change in the Administration’s policies, production levels will continue to plummet, rendering Americans even more vulnerable than they are today to political instability in the Middle East and higher fuel prices at the pump.

It is clear that terrible mistakes were made concerning the DEEPWATER HORIZON well.  And lessons must be learned from those mistakes.  But that does not mean that the industry has been “lucky” up to this point after drilling thousands of wells in the Gulf of Mexico without a significant environmental incident.  The characterization of our industry as having been “lucky” is one that I want to refute because it was made by Michael Bromwich, the Director of the Bureau of Ocean Energy Management, Regulation and Enforcement (formerly the Minerals Management Service) and the principal regulator of offshore oil and gas exploration and production activities.  The truth is this – our industry has an impressive safety record and it has worked hard and diligently to attain that record.  Since the 1950’s, over 40,000 wells have been drilled in the Gulf of Mexico, with only one DEEPWATER HORIZON-type event.  The extrapolation of this single event into an industry-wide failure is breathtaking in its lack of regard for the facts and vital economic, energy, security and other national priorities.

When the Administration’s offshore drilling moratorium was first announced in May 2010, Hornbeck quickly reached three basic conclusions:

  • Notwithstanding the stated six-month period for the moratorium, the halt in offshore drilling activities was likely to extend well beyond that time period.
  • The moratorium policy, if left unchecked, could cripple the web of physical and human capital required to support safe deepwater offshore exploration and production operations.  In other words, a working Gulf is a safe Gulf.  Without the work, people and assets would soon leave the region, rendering the offshore industry less capable in its pursuit of safe and environmentally-sound deepwater operations.
  • And, most importantly, the moratorium was not legal.  The Administration’s actions were based upon the erroneous premise that the DEEPWATER HORIZON event itself proved the existence of a systemic, industry-wide problem.  Hornbeck knew that was not the case.

Hornbeck and other service companies take seriously their obligations to work in a safe and environmentally sound manner.   We dedicate significant financial and personnel resources to industry safety and training.  Consequently, we intuitively understood that the Administration’s premise for its industry-wide shutdown was wrong.  Hornbeck concluded, together with other offshore industry companies, that there was no choice but to sue the Federal government.  With the Gulf of Mexico as the company’s principal operating theater, the government’s actions threatened the very viability of Hornbeck, and could lead to the dismantling of an industry that employs hundreds of thousands of people and upon which the Nation depends for its energy security.  Thus on June 7, 2010, Hornbeck filed suit against the Department of Interior (DOI) seeking an injunction to bar the enforcement of the moratorium.   We did not take this step lightly.  But, we felt an obligation to our country, our industry, and our employees to stand up and fight this injustice.

In the course of this litigation, Hornbeck uncovered information calling into question the Federal government’s good faith in the imposition of the offshore drilling moratorium.  We learned that some experts from the National Academy of Engineers claimed, contrary to reports from the Administration, that they had not peer reviewed or recommended the six-month moratorium announced by DOI.  The experts further informed Hornbeck that the suspension of ongoing drilling operations could actually compromise safety.  They were extremely embarrassed that their views were being misrepresented to the American public as having been in support of a drilling moratorium.

This distortion by the Administration became a central fact in the Federal litigation brought by Hornbeck.  In his decision striking down the moratorium on June 22, 2010, Federal Judge Martin Feldman, of the U.S. District Court for the Eastern District of Louisiana, expressed his apprehension about the integrity of the Administration’s review and “misleading text in the Executive Summary [of its report] that seem[ed] to assert that all the experts agree[d] with the Secretary’s recommendation” to impose the drilling moratorium.  Not only was a peer review of the moratorium decision not obtained, but the Administration at its highest levels appeared to have misrepresented to the public that expert peer review of the decision had in fact occurred.  These facts caused Judge Feldman to question the “probity” of the process followed by DOI in issuing a moratorium that was, in essence, an industry-wide shutdown.  Notably, in a subsequent investigation by the DOI Inspector General on this point, Secretary Salazar’s counselor explained to investigators that “[t]he decision to invoke the moratorium on current deepwater drilling projects was a policy decision made by Secretary Salazar and President Obama . . . the moratorium was never peer reviewed by the experts”.

Additionally, based upon a review of the administrative record, Judge Feldman determined that the Administration “failed to cogently reflect the decision to issue a blanket, generic, indeed punitive, moratorium with the facts developed during the thirty-day review”, and that Hornbeck and the other parties had “established a likelihood of successfully showing that the Administration acted arbitrarily and capriciously in issuing the moratorium.”  With the moratorium struck down, Hornbeck expected an immediate resumption of at least some offshore drilling activities while the industry and its governmental oversight agencies worked to learn from the mistakes of the DEEPWATER HORIZON incident.  Unfortunately, the Administration’s response to Judge Feldman’s ruling did just the opposite.  Notwithstanding the fact that Judge Feldman enjoined the enforcement of the blanket, generic and punitive moratorium, Secretary Salazar set about almost immediately to defy the Court’s order.

Within hours of Judge Feldman’s ruling, the Secretary issued a written statement announcing his intention to issue a second moratorium.  In testimony before a Senate hearing the very next day, the Secretary characterized the enjoined moratorium as the “moratorium in place” and he promised that DOI would impose shortly a new moratorium. And in fact, the second moratorium was issued by Secretary Salazar on July 12, 2010.  All the while, DOI subjected Hornbeck and the other litigants in the Hornbeck case to considerable expense through its posturing and other litigation tactics that have since been criticized by the courts.

While Hornbeck did not participate in a legal challenge to the second moratorium, Ensco plc (Ensco) did.  It is important to note that the Administration’s ultimate decision to lift the second moratorium in October 2010 occurred the same day that parties were to submit additional briefing before Judge Feldman.  Judge Feldman remarked during the Ensco case that the Administration’s conduct in the Hornbeck matter could well be contemptuous.  Later on February 2, 2011, finding that the “second moratorium disabled precisely the same rigs and deepwater drilling rigs and activities in the Gulf of Mexico as did the first one”, Judge Feldman took the highly extraordinary step of holding the Federal government in contempt for having defied his order in the Hornbeck case.  This ruling is notable in that it identifies conduct, at the highest levels of the Federal government, to have been deliberately defiant and dismissive of a co-equal branch of the government.  In a Nation of laws, even the President must accept the rulings of a Federal court.

Against that backdrop, and with the issuance of new DOI safety, equipment and other requirements within weeks of the DEEPWATER HORIZON incident, offshore drilling operators have had significant difficulties in deciphering the steps needed to receive a drilling permit.  The DOI notices and regulations, none of which have been implemented with public input, contain enormous areas of ambiguity that operators have legitimately claimed cannot be met.

At a time when significant regulatory, environmental compliance, and other hurdles have been placed in the path of the resumption of offshore drilling activity, instability within foreign countries in North Africa and the Middle East further threatens the national and economic security of our country.  Our Nation should be using every opportunity to safely develop its oil and gas resources to ensure that we are not dependent upon foreign oil and the tangled obligations that go with it.  That said, in one of the most astounding pronouncements from the Administration, DOI in October of last year specifically stated that:

Currently, there is sufficient spare capacity in OPEC to offset a decrease in [Gulf of Mexico] deepwater production that could occur as a result of this rule. … However, more of the oil for domestic consumption may be purchased from overseas markets because the cost of OCS oil and gas production will rise relative to other sources of supply.

75 Fed. Reg. 63366 (Oct. 14, 2010).  The Administration so much as admits that it prefers to rely on foreign markets, even those hostile to United States interests, rather than to encourage and incentivize domestic resource development and production.

Hornbeck and other industry participants recognize that there will be changes in the post-DEEPWATER HORIZON world.  That said, the industry needs to be a participant in a meaningful dialogue about those changes and how best to achieve the shared goal of a safer deepwater oil and gas industry.  Instead, there has been nothing more than one-way, uninformed pronouncements from the Administration with little or no regard for the enormous economic and national security contributions made by this industry.  Even when faced with multiple losses in the Federal courts and a contempt citation, this Administration has remained “dug-in” to a policy that is harming our Nation on a daily basis.

Mr. Chairman, through this hearing and your continuing oversight, Hornbeck very much appreciates your efforts to illuminate these major issues confronting the offshore industry.  The discussion must include the costs to the economy and the Nation in losing a key component of the energy industry.  And, we need to discuss all associated costs, including those associated with greater dependence on foreign oil.  We need to consider, as the industry is dismembered rig by rig, the loss of human capital and expertise that truly jeopardizes any advancement of safety in the Gulf.  We need to talk about the ability to deliver economic and self-sustaining prosperity to the Nation while tripling – or more – the cost of energy.

Mr. Chairman, our employees do not want an unemployment check.  We are not asking for a bailout.  We simply want to go back to work.  We urge you and the Committee to continue to use every opportunity and all options at your disposal to compel this Administration to reverse its dangerous energy policies and restore oil and gas production in the Gulf of Mexico.

Mr. Chairman, thank you for allowing me to appear before you today.


President Clinton: Drilling Delays are ‘Ridiculous’

March 12, 2011

Former President Bill Clinton, perhaps the country’s most prominent Democrat, said Friday that delays in offshore oil and gas permits are “ridiculous,” Politico is reporting.

Speaking at the HIS CERAWeek conference, Clinton told attendees that there are “ridiculous delays in permitting when our economy doesn’t need it.”

Clinton spoke on a panel with former President George W. Bush, according to Politico. The panel was closed to the media, and videotaping was not permitted (which saves Obama from being repeatedly embarrassed as news outlets run the clip over and over).

Politico, however, reports that the “two former presidents both generally agreed on the need to get offshore drilling workers back on the job.”

We couldn’t agree more with the former Presidents. Now if the current President would just listen to his predecessors, we’d all be a lot better off.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


Caught!

March 11, 2011 PM Update

Immediately following the President’s press conference today, OMSA issued a statement (which you can read in the previous post below) correcting—to put it delicately—the President’s many inaccuracies on Gulf oil production. I was heartened to see Fox News (and others) alert the American people to what’s truly happening in the Gulf today and the impact the administration’s policies will have on this country in the years to come.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


OMSA Responds to the President’s Explanation of High Gas Prices

March 11, 2011

Statement from Jim Adams, president and CEO,
Offshore Marine Service Association in Response to
the President’s Press Conference on Skyrocketing Gas Prices

Lifting Administration’s De Facto Moratorium on Gulf
Oil Exploration Would Ease
President’s Self-imposed Energy Crisis

(New Orleans, Louisiana) — March 11, 2011 — “President Obama’s rhetoric will not bring down the price of gas, will not make us less reliant on unstable regimes and will not generate new jobs in the energy sector. The only immediate solution to the administration’s self-imposed energy crisis is to lift the de facto moratorium on offshore drilling in the Gulf of Mexico,” said Jim Adams, president and CEO of the Offshore Marine Service Association (OMSA).

“This administration continues to deceive hard working Americans with false assurances of today’s production output,” continued Adams. “There has been no exploration off the continental shelf for nearly a year—that means future production will drop precipitously.”

According to Tuesday’s “Short-Term Energy Outlook” (published monthly by the U.S. Energy Information Administration), “Domestic crude oil production, which increased by 150,000 bbl/d in 2010 to 5.51 million bbl/d, declines by 110,000 bbl/d in 2011 and by a further 130,000 bbl/d in 2012 (U.S. Crude Oil Production Chart).”

U.S. Energy Information Administration's Short-term Energy Outlook (March, 2011)

A co-worker explains why she wants the price of oil to go way up.

March 10, 2011

Here’s a clever explanation as to why the price of gas and oil is skyrocketing:

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


More Questions for Secretary Salazar

March 8, 2011

Today we signed on to a letter asking U.S. legislators to probe Secretary Salazar on several points when he appears before them to defend the Interior’s budget. The content of that letter follows:

ATTN: Members – House Appropriations Subcommittee on Interior, Environment and Related Agencies
ATTN: Members – Senate Appropriations Subcommittee on Interior, Environment and Related Agencies

To Whom It May Concern:

The continued, unfounded and unlawful de facto moratorium in the Gulf has already cost the U.S. economy tens of thousands of jobs and billions of dollars in economic activity. This week, Interior Secretary Salazar will appear before your committee to defend his 2011 budget request. We urge you to address the following points with Secretary Salazar when considering authorization of his department’s budget:

What is the Secretary doing to address energy security?

Interior Secretary Kenneth Salazar recently claimed that “what we do [in the Gulf] in terms of production is not going to affect the price of oil, which is set on the world market.”

Uncertainty in the supply chain—whether from disruptions in the Middle East or federal moratoriums at home—plays a major role in influencing energy prices. Increasing supply by reopening access to a region that provides one third of domestic energy production can help to boost confidence in international commodity investors, add a significant amount of resources to the market to steady prices, and stimulate our economy.

When will the Department of the Interior resume standard procedures for permitting in the Gulf?

The Secretary continues to claim the Department is resuming its standard approval process, despite that only one deepwater exploration permit has been issued in the last year.

This political maneuver to temper federal legislators as the Interior Department chief begins his agency’s budget debate is strikingly similar to the Administration’s official removal of the moratorium just before the November elections. It’s only for show. Such Washington politicking is insulting to the tens of thousands of individuals and businesses which continue to suffer in the Gulf from the all but total shutdown of offshore activity resulting from the de facto moratorium. Economic certainty is needed to gain the interest of investors, the trust of banks, and the confidence from businesses to reinvest in growth. Until this certainty is provided and the whimsical permitting process ended, this government imposed recession will continue in the region.

How can the Secretary defend the use of taxpayer dollars when his department has wasted so many already?

Respected experts—even within the White House’s own spill commission—continue to dispel the claims of “systemic risk” the Interior cites to justify its heel dragging on permits.

White House Spill commission Chief Counsel Fred Bartlit called the Deepwater Horizon incident “an entirely preventable disaster.” U.S. drilling technologies are the gold standard for the world. The U.S. is the only nation to have taken such extreme measures as a complete drilling ban in response to the Gulf oil spill. Shutting down all drilling activities has eliminated over 20,000 jobs in the Gulf and cost the government nearly $14 billion in revenue.

Will the Secretary keep his promise to resume operations now that a deployable containment system exists?

Despite promises to resume permitting once our oil and gas industry developed technology to address future deepwater disasters—no matter how unlikely—the Secretary has ignored the world’s most advanced well containment system.

The industry led effort to develop technologies capable of stopping uncontrolled deepwater well-blowouts successfully resulted in the Marine Well Containment System. This new system can be deployed in a day to stop the flow of hydrocarbons, or direct the flow to containment vessels. Secretary Salazar has been down to the Gulf, seen this system, but failed to live up to his promise to resume drilling.

If the Interior Department begins issuing new permits, won’t that generate the necessary revenue to review and issue even more in the future?

Now, the Interior Department has stated that if it does not receive desired funding, “we may never return to the pre-Macondo rate of permitting.”

It is no surprise that the agency is lacking funding since a portion of its budget is covered by fees, royalties, taxes, and rents from energy production. Restart the drilling and the funding will follow. Department pleas for more money are the last thing businesses in the Gulf want to hear right now from an agency so thoroughly destroying the regional economy.

Secretary Salazar has chosen to hold the entire gulf accountable for one tragic, and preventable disaster. That decision is punishing our Gulf communities, the tens of thousands of impacted workers our organizations represent, and American taxpayers who are left to foot the bill for the department’s irresponsible moratorium.

Please tell the Interior Department to stop this misguided and unnecessary moratorium before it is too late for the thousands of Gulf businesses scraping by on savings.

Respectfully,

Offshore Marine Service Association
Ship Builders Council of America
National Black Chamber of Commerce
Louisiana Black Chamber of Commerce
Minority Business Enterprise Legal Defense and Education Fund
Center for Environment, Commerce, and Energy

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


Michael, Row Your Boat Offshore …

March 7, 2011

Michael Bromwich wrote an op-ed in the Houston Chronicle this weekend that had a lot of folks spitting out their morning coffee. Mr. Bromwich, head of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), claimed that the government was moving ahead on approving permits for deepwater drilling in the Gulf.

Yet his op-ed was published only two days after his boss, Interior Secretary Salazar, said it might have to reject seven permits for deep-water drilling if a federal judge forces the government to make a quick decision on the applications.

The judge, Martin Feldman, ruled that the Obama administration had plenty of time to make decisions on the permits, saying the delays were becoming “increasingly inexcusable” and telling the government to start acting on the permits within 30 days. Now the Obama administration has declared that it might have to reject these permits because it can’t act so soon. (Not surprisingly, the administration dropped the news late Friday—the infamous time for dumping bad news.)

Is there any more evidence needed to show that the administration has instituted a de facto moratorium on deepwater drilling?

The Obama administration has approved just one deepwater permit in 10 months—and that came only after Judge Feldman held the government in contempt of court.

In his op-ed, Mr. Bromwich says the administration is simply concerned about safety, but that doesn’t fly. Fred H. Bartlit—the President’s appointed Chief Counsel to the National Committee on the Deepwater Horizon Oil Spill and Offshore Drilling—concluded in his report that, “What the investigation makes clear, above all else, is that management failures, not mechanical failings, were the ultimate source of the disaster. … Better management of personnel, risk, and communications…would almost certainly have prevented the blowout. The Macondo disaster was not inevitable.”

That’s why it was completely unnecessary to shut down the entire industry while the government worked on revising its standards. There simply is no evidence that the tragedy that befell the Deepwater Horizon was due to systemic industry-wide failures.

In fact, the evidence shows just the opposite. More than 50,000 wells have been drilled in a safe and environmentally sound manner. BOEMRE’s own experts from the National Academy of Engineers did not support stopping ongoing drilling and characterized the government’s moratorium as being counter-productive to the important cause of safety. Why? Because when you shut down an industry you lose critical assets and human capital that the industry must rely on in order to operate safely. We don’t getter better or safer sitting at the beach.

Mr. Bromwich wrote that “we can have more productive discussions if we deal in facts and not rhetoric.” But as Forbes writer Christopher Helman points out, Mr. Bromwich ignores some important facts found on BOEMRE’s website.

There’s lots of more interesting facts that he didn’t include. Take these that I pulled off of BOEMRE’s website on Friday. They reflect the number of new wells drilled and total wells producing in Gulf waters of more than 2,000 feet deep for the 12 months ending March 1 for each of these years…

2006 — 131 wells drilled, 296 wells producing
2007 — 154 drilled, 314 producing
2008 — 164 drilled, 359 producing
2009 — 137 drilled, 370 producing
2010 — 133 drilled, 398 producing
• 2011 — 36 drilled, 383 producing

Now those are some interesting facts, right? Wells drilled down 75% in one year, and the number of producing wells dropping for the first time in a decade.

Here’s another good fact from BOEMRE’s site: in March 2010 oil production from the Gulf was 1.58 million bpd, while natural gas production was 6.68 billion cubic feet per day. In December (the most recent month with good data), the volumes had dropped to 1.2 million bpd of oil and 4.35 billion cfepd of gas. That’s a 25% decline in oil volumes, and a 35% drop in gas. In 2009 the Gulf was producing as much as 1.74 million barrels of oil per day (equivalent to all of Libya).

Here’s another fact that Mr. Bromwich ignored: More than 50,000 oil wells have been drilled in the Gulf of Mexico in a safe and environmentally sound way. No one wants to pollute our beaches, put people out of work or spend billions of dollars to clean up a spill. It’s in everyone’s best interests to drill safely.

After six decades of safe drilling, there’s no reason for a de facto moratorium. Judge Feldman agrees and has held the Obama administration in contempt of court for not approving permits. After all, if an airplane crashes, the government doesn’t shut down the entire airline industry.

While oil production falls, oil prices soar and Americans suffer, we have offered a solution. Let thousands of workers get back to drilling for oil and gas in our own waters before more drilling rigs have to leave for foreign waters.

Our workers are tired of being idle. Americans are tired of paying rising gasoline prices. And I’m tired of spitting out my morning coffee when I read the Obama administration’s latest excuse for why permits aren’t being approved.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


President Obama, Put Domestic Oil Production “On the Table.”

March 7, 2011

Statement from Jim Adams, President and CEO, Offshore Marine Service Association

President Obama, Put Domestic Oil Production “On the Table.”

(New Orleans, Louisiana) — March 7, 2011 — “President Obama’s Chief of Staff, Bill Daley, told Meet the Press this weekend that “all matters have to be on the table” when it comes to responding to skyrocketing gasoline prices. He mentioned higher fuel economy standards, better batteries for electric cars, and tapping the Strategic Petroleum Reserve.

Conspicuously absent from the table is the most logical response: a resumption of oil exploration in the Gulf of Mexico. Getting the Gulf back on line would increase the global supply of oil, reduce America’s dependence on imported oil, and put tens of thousands of Americans back to work all across the region.

It makes no sense to turn off future production and leave the workers, their families and their communities that depend on oil production in suspense while the administration decides what to do. All Americans are suffering because of this self-inflicted energy crisis.

I urge Mr. Daley and President Obama to lift the de facto moratorium on Gulf oil production before oil and gas prices rise even further.

OMSA represents the owners and operators of U.S. flag offshore service vessels and the shipyards and other businesses that support that industry.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association


There is Nothing “Robust” About the Obamatorium

March 3, 2011

Statement from Jim Adams, President and CEO, Offshore Marine Service Association

There is Nothing “Robust” About the Obamatorium

(New Orleans, Louisiana) — March 3, 2011 — This morning Interior Secretary Ken Salazar told the U.S. House of Representatives that the Obama Administration has a “robust’ plan for Gulf Coast oil and gas production.

In reality, the Administration is implementing the planned demise of the offshore domestic energy industry.

In response to a question from Rep. Fleming about the Obama Administration’s de facto moratorium on Gulf Coast oil and gas production, Interior Secretary Ken Salazar claimed that domestic oil production had increased since 2008.

“The statistics, Mr. Congressman, are absolutely wrong. When you look at the production within the Gulf of Mexico, even in the midst of the national crisis of the Deepwater Horizon, the production has remained at an all time high and we expect that it will continue as we bring new production online,” said Secretary Salazar.

It is Secretary Salazar who is absolutely wrong. As can be seen from the Department of Energy’s EIA Short Term Energy Outlook (below), offshore oil production in the Gulf has been on a steady downward slide since the Obamatorium went into effect last year. Without a change in policy, production will continue to decline sharply.

Source: U.S. Department of Energy EIA Short Term Energy Outlook (February 2011)

It is self-evident that without exploration there will be no oil production. President Obama’s energy policy is killing jobs, raising the price of fuel and making Americans vulnerable to political instability in the Middle East.

OMSA represents the owners and operators of U.S. flag offshore service vessels and the shipyards and other businesses that support that industry.

Jim Adams

Jim Adams
President and CEO, Offshore Marine Service Association