WSJ: Drilling moratorium a second disaster

posted at 12:15 pm on June 17, 2010 by Ed Morrissey

Over a week ago, the panel of experts consulted by the White House publicly accused the Obama administration of misrepresenting their views on the drilling moratorium imposed by Barack Obama for deepwater drilling in the wake of the Gulf disaster.  The White House acknowledged that their release of the language had changed since the experts had reviewed it, but that they took the experts’ advice in reaching those conclusions that led to the moratorium.  The Wall Street Journal decided to consult with the same experts — and report that their opinions diametrically oppose the White House position:

The experts were certainly under the impression they were reviewing a comprehensive document, as some of the recommendations would take six months or even a year to implement. And the report they agreed to did address moratoria: It recommended a six-month ban on new deepwater permits. Yet Benton Baugh, president of Radoil, said that in at least two separate hour-and-a-half phone calls among Interior and the experts, there was no discussion of a moratorium on existing drilling. “Because if anybody had [made that suggestion], we’d have said ‘that’s craziness.’” …

A big reason why those experts would have balked is because they recognize that the moratorium is indeed a threat to safety. Mr. Arnold offers at least four reasons why.

The ban requires oil companies to abandon uncompleted wells. The process of discontinuing a well, and then later re-entering it, introduces unnecessary risk. He notes BP was in the process of abandoning its well when the blowout happened.

The ban is going to push drilling rigs to take jobs in other countries. “The ones that go first will be the newest, biggest, safest rigs, because they are most in demand. The ones that go last and come back first are the ones that aren’t as modern,” says Mr. Arnold.

The indeterminate nature of this ban will encourage experienced crew members to seek other lines of work—perhaps permanently. Restarting after a ban will bring with it a “greater mix of new people who will need to be trained.” The BP event is already pointing, in part, to human error, and the risk of that will increase with a less experienced crew base. Finally, a ban will result in more oil being imported on tankers, which are “more likely” to spill oil than local production.

All this is even before raising ban’s economic consequences, which already threaten tens of thousands of jobs. This is why Louisiana politicians are now pleading with the Administration to back off a ban that is sending the Gulf’s biggest industry to its grave.

There is already some talk of the evaporation of assets.  Supposedly, Petrobras is interested in the rigs that went out of business, to fill the demand created by Brazil’s government-owned oil company to explore and exploit the huge field of oil discovered recently off their coast.  As those efforts increase in Brazil and other areas where deepwater drilling will be conducted, the need for completed rigs will be at a premium, leaving fewer for the US to use when drilling eventually resumes.

The same is true of the skilled labor base.  First, skilled deepwater oil workers are probably not in large supply in the US anyway, thanks to the efforts of the US government to discourage drilling or at least slow it down.  The people put out of work won’t get many other kinds of job opportunities in this economy, and will have to look overseas for work.  They may return if jobs become available in the US or they may decide to stick with their current job, but as with the rigs, the most valuable (experienced) labor will go first and get the best deals, which will provide a big disincentive for returning.

Economically, this will be a second disaster for the Gulf region.  The spill has critically damaged other traditional industries such as fishing, shrimping, and tourism.  Now the moratorium will kill another skilled-labor industry on which tens of thousands of Americans rely for their livelihood.  Small wonder that state and local governments reacted with alarm to the blanket moratorium; tax bases will shrink even further and put a heavier strain on government services.

The Obama administration has not moved to correct this moratorium and its damaging impact.  Perhaps Congress needs to get involved — and not just in the moratorium, either.


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Comment pages: 1 2

We will all truly feel the pain of this at the pumps next years, folks

E9RET on June 17, 2010 at 2:47 PM

They WANT us to feel that “pain” (I put it in quotes because they seem to think it would just hurt a little, not throw our society into 3rd-world Mad Max status almost overnight). Obama said $10/gal gas sounds great to him. And I’ve gotten in many arguments with progressives lately who say such a scenario is absolutely necessary to get us to stop living our oil-dependent lifestyle. As if there’s some lazy genius out there who simply doesn’t realize the urgency yet of our need for alternative energy, who will suddenly get up off the couch and provide us with the long-awaited miracle only when it “hurts” enough — which is apparently when swaths of suburbia lie abandoned and grocery store shelves are empty because no one can afford the gas to go to work or deliver goods to stores.

They are clueless to the idea that, even if the miracle alternative energy were discovered tomorrow, it would take years, perhaps decades, to build up the infrastructure to mass-produce it and distribute it to all corners of the world, much less retrofit all the vehicles and machinery to make use of whatever it is. In the meantime, we need affordable, abundant OIL. They are such frickin idiots it makes me want to scream.

aero on June 17, 2010 at 3:05 PM

Please believe me, this moratorium was specifically crafted to kill oil production in the GoM for decades for a purpose and not just some badly worded hurried up knee jerk. Someone very much wants GoM oil exploration dead..

E9RET on June 17, 2010 at 2:53 PM

Absolutely. This isn’t incompetence; it’s malice. Whether it’s border enforcement or energy policy, it is clear that Obama’s agenda is to punish the people of the states which don’t support him.

bitsy on June 17, 2010 at 3:06 PM

They are clueless to the idea that, even if the miracle alternative energy were discovered tomorrow, it would take years, perhaps decades, to build up the infrastructure to mass-produce it and distribute it to all corners of the world, much less retrofit all the vehicles and machinery to make use of whatever it is.

aero on June 17, 2010 at 3:05 PM

In fact, we did discover a miraculous source of alternate energy decades ago — nuclear energy. They killed that.

bitsy on June 17, 2010 at 3:13 PM

Fortunately, it’s just like in Atlas Shrugged. Remember all the barriers they put in Hank and Dagny’s way? Remember how they just fought harder, and found a way to make money, because they coudl still make it profitable?

Ingenuity and determination keep people working through government regulations long after most people would assume efforts would stop.

hawksruleva on June 17, 2010 at 1:25 PM

Have you forgotten how Atlas Shrugged ended? In the end, government will ruin this country.

fossten on June 17, 2010 at 3:27 PM

Am I missing something? Virtually all offshore drilling is done in INTERNATIONAL waters. Everybody has the right to drill there- even our enemies. Wouldn’t be better both for our economy and our environment if WE (not they) did the drilling?

Territorial waters extend out 12 miles from the low water line with an additional 12 miles for law enforcement and then out to 200 miles for exclusive economic use. Then there are “customary territorial limits” which certain countries often “claim an historical” ownership of certain bays and gulfs.

The leases where the oil spill occurred are considered U.S. waters.

All of the rigs, production or otherwise, are considered U.S. vessels and the production managers have to be qualified U.S. Merchant Marine Officer certification and license and are considered captains. The USCG has jurisdiction over all U.S. flagged vessels, including the oilrigs anywhere in the world.

E9RET on June 17, 2010 at 3:51 PM

I agree. This is going to be more devastating that the crisis itself, and there will be no compensation for it, either.

AnninCA on June 17, 2010 at 4:02 PM

I think, after reading most posts here, this is the MOST PISSED OFF and fired up I have ever seen commenters commenting!!

Is there anything the average person can do to STOP THIS INSANITY!!

I sure don’t have a clue…but stop it must…time to put our collective heads together and come up with somthing constructive…

Will calling every damn politician out there work?

There has to be someone who know what to do LEGALLY!!

Someone asked if there was a military type recourse we could use/do…could we?

Do we even have a leg to stand on or do we wait until November…

Enough of this shite from this POS pretending to be the POTUS…

I AM MAD AS HE!! AND I AM NOT TAKING IT ANY MORE!!11!!!

RoxanneH on June 17, 2010 at 4:18 PM

Mexico says: Moratorium? We don’t need no stinking moratorium! We will continue drilling in the gulf, you stupid gringos.

RadClown on June 17, 2010 at 4:23 PM

He notes BP was in the process of abandoning its well when the blowout happened.

OK. Here we go again. Why would they abandon a well that has that much oil in it?
Mirimichi on June 17, 2010 at 1:29 PM

Ding! Ding! Ding!

petefrt on June 17, 2010 at 4:37 PM

Sort of fitting…

http://www.youtube.com/watch?v=q_qgVn-Op7Q

I am mad as hell and not gonna take it any more… :-P

RoxanneH on June 17, 2010 at 4:42 PM

Please believe me, this moratorium was specifically crafted to kill oil production in the GoM for decades for a purpose and not just some badly worded hurried up knee jerk. Someone very much wants GoM oil exploration dead..

E9RET on June 17, 2010 at 2:53 PM

I believe.

petefrt on June 17, 2010 at 4:49 PM

He notes BP was in the process of abandoning its well when the blowout happened.
OK. Here we go again. Why would they abandon a well that has that much oil in it?
Mirimichi on June 17, 2010 at 1:29 PM
Ding! Ding! Ding!

petefrt

That’s already been explained earlier. BH was an exploration ship, not a production platform. The plug it up and move on to another location

E9RET on June 17, 2010 at 4:51 PM

BO is making sure that we continue to fund terrorist organizations, since they likely funded his campaign.

workingforpigs on June 17, 2010 at 4:57 PM

E9RET According to what I have been able to gather.

1 The BP spill occurred in international waters but within the US economic zone (this zone is currently being disputed.)
2 The BP rig (vessel) flew the flag of the Marshall Islands-which had jurisdiction of the vessel before it sank.
3 The vessel owner is a Swiss corporation. Maritime law limits the vessel owners liability to the value of the vessel.

Thus everything, when it comes to international treaties, territorial limits and tort liability is as clear as mud-which is what lawyers intended it to be.

MaiDee on June 17, 2010 at 5:12 PM

Lies stacked upon lies. Is there no end?

ultracon on June 17, 2010 at 5:45 PM

E9RET on June 17, 2010 at 4:51 PM

Yes, I saw it. That explains it. I should have acknowledged seeing it. Thank you.

petefrt on June 17, 2010 at 6:22 PM

Deliberately sabotaging the nation’s economy and lying to cover it up.
Treason is not an unreasonable description of what is happening.

n0doz on June 17, 2010 at 7:16 PM

E9RET on June 17, 2010 at 4:51 PM

Yes, I saw it. That explains it. I should have acknowledged seeing it. Thank you.

petefrt on June 17, 2010 at 6:22 PM

Also, just because there is a great deal of oil, doesn’t mean that it is economical oil to refine. I wouldn’t think that baby-poop orange was a typical color for good quality crude.

Harry Voyager

Voyager on June 18, 2010 at 1:58 AM

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