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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

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