Study: Picking up the Gulf oil permitting pace could result in 230,000 jobs

posted at 3:40 pm on July 22, 2011 by Tina Korbe

A new study by IHS Cambridge Energy Research Associates shows the current (slow) pace of permitting for Gulf oil exploration and production continues to cost the country in jobs, government revenues and oil production.

“The moratorium last year halted drilling activity, but since the moratorium was lifted last October, oil activity has been slow to restart and this has had a negative impact on jobs growth and U.S. oil production,” IHS CERA managing director of global oil James Burkhard said yesterday on a press call. “There is what we call an activity gap under the new regulatory environment and this activity gap is created by the difference in the capacity of oil regulators to oversee oil exploration and development activity and the industry’s capacity to invest. What we found is congestion in the regulatory capacity that is holding back the creation of jobs and domestic oil production in the Gulf of Mexico.”

Specifically, compared to historical trends, pending oil exploration plans are up by nearly 90 percent, but approvals are down by 85 percent — and the approval process has slowed from an average of 36 to 131 days. Over the past year or so, the backlog of deepwater plans pending approval has increased by 250 percent. Drilling permits for both shallow- and deepwater have declined by 60 percent.

Aligning the permitting process with the industry’s production capacity could result in 230,000 American jobs and more than $44 billion in U.S. gross domestic product — all by 2012. That would mean more revenues for the federal government and less money going to foreign governments.

The employment effects would not be limited to the Gulf states. One-third of the jobs would be generated outside the Gulf region in states like California, Florida, Illinois, Georgia and Pennsylvania.

That’s especially significant at a time of high unemployment, as James Diffley, IHS Global Insight managing director of U.S. Regional Economics, explained.

“The unemployment rate in the U.S. has remained stubbornly stuck above 9 percent,” Diffley said on yesterday’s call. “Although technically we’re out of the Great Recession, recovery has been very slow, indeed, even more sluggish this summer. … There are still millions of lost jobs not recovered yet, as the 9-point-plus unemployment rate attests. This economy is in a desperate need of engines of growth to create demand, add jobs and generate incomes. Our analysis demonstrates that restoring the Gulf of Mexico is one such engine.”

The slowed pace of approvals has also likely cost the country in oil production. Since 1998, new discoveries in the deepwater Gulf of Mexico have, on average, contributed more than one billion barrels of additional oil reserves each year. Thanks to the moratorium and the slow pace of permitting, no new discoveries were made in the past 12 months. Discoveries that might have been made would be contributing to production for future years. The lack of discoveries will have significant implications for future supplies from the Gulf of Mexico (and, presumably, for oil and gas prices).

This should be a total no-brainer. The federal government needs to improve the permitting process, retaining whatever gains have been made in the way of added safety, but no longer sacrificing the economic benefits the Gulf has to offer a nation that desperately needs them.

 

 


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This should be a total no-brainer. The federal government needs to improve the permitting process, retaining whatever gains have been made in the way of added safety, but no longer sacrificing the economic benefits the Gulf has to offer a nation that desperately needs them.

we stopped operating on anything resembling common sense in November 2008.

ted c on July 22, 2011 at 3:43 PM

Will never happen…

PatriotRider on July 22, 2011 at 3:43 PM

Doesn’t matter if it would create 236 million new jobs. Obama wants to destroy the oil industry. He wants $10 gas so that everyone is forced into driving an econobox.

angryed on July 22, 2011 at 3:44 PM

Yes, but they wouldn’t be green jobs!

cartooner on July 22, 2011 at 3:44 PM

If it ain’t green…it ain’t gonna happen under this Administration.

coldwarrior on July 22, 2011 at 3:46 PM

Yes, but that would cost Obama millions of campaign contributions and a few votes.

GaltBlvnAtty on July 22, 2011 at 3:46 PM

“Picking up the Gulf oil permitting pace could result in 230,000 jobs.”

Of course it would…

… but we can’t have THAT now, can we?

Seven Percent Solution on July 22, 2011 at 3:46 PM

This should be a total no-brainer

Unless, of course, someone in power wasn’t interested in creating jobs…….

search4truth on July 22, 2011 at 3:46 PM

bho and the epa won’t let this happen. If they did, they are already going after refineries big time to stop refining the oil. Gas is no where near high enough for bho yet! Gotta get his buddy ge more and more money with the green crud!
L

letget on July 22, 2011 at 3:49 PM

After reading this article, it’s obvious to me that we just need to go hire more Government Bureaucrats to get these permits processed. Maybe those temporary census workers are still looking for gainful employment./s

Red State State of Mind on July 22, 2011 at 3:49 PM

Drill, Baby, Drill!

You Betcha!

OnlyOrange on July 22, 2011 at 3:49 PM

Tina, the only permit they (BOEM)are letting through are called Sidetracks. That is it.

upinak on July 22, 2011 at 3:49 PM

Obama’s administration represents a clear and present danger to the American economy.

BuckeyeSam on July 22, 2011 at 3:52 PM

Don’t expect hiring any time soon. Obama et al will issue new drilling rules in the coming weeks and also undergo a structural reorganization creating two separate agencies. Source

debg on July 22, 2011 at 3:56 PM

What…

… you didn’t believe him?

Seven Percent Solution on July 22, 2011 at 3:56 PM

Can I get a DUH???

Exhibit #52,423,532 that this administration is completely unserious about job creation and the economy in general.

CantCureStupid on July 22, 2011 at 3:57 PM

Paging Sarah Palin. Will Sarah Palin pick up the red courtesy phone. Paging Sarah Palin.

Paul-Cincy on July 22, 2011 at 3:58 PM

For every new oil worker job, a polar bear dies. Fact.

Bishop on July 22, 2011 at 4:02 PM

But won’t those be jobs in mostly ecky red states?

Cindy Munford on July 22, 2011 at 4:06 PM

Somehow, with letting those 10 “big-rigs” leave the Gulf, I don’t think Employment of Americans is very high priority of this administration. Spending money for welfare seems to be #1.

RADIOONE on July 22, 2011 at 4:07 PM

Barack Obama = engine of national destruction.

slickwillie2001 on July 22, 2011 at 4:07 PM

Of course there’s a white guy front and center in the caption photo. Where did you find that racist crying about his job, a KKK rally?

-ernesto

Bishop on July 22, 2011 at 4:10 PM

Permits will pick up around September/October 2012

Election time

cmsinaz on July 22, 2011 at 4:11 PM

Spending money for welfare seems to be #1.

RADIOONE on July 22, 2011 at 4:07 PM

Absolutely. Get that gubmint $ to my people/voters first; screw the complain’n military.

GaltBlvnAtty on July 22, 2011 at 4:11 PM

The country’s CEO is an ideologue. He wants redistributive tax polices. He wants the end of fossil fuels. It doesn’t matter what effect his policies have on employment or the financial health of the nation, he wants what he wants which is nothing less than profound fundamental and foundational change. Candidate Obama said as much over and over again. I for one believed him.

SukieTawdry on July 22, 2011 at 4:16 PM

There will be no drilling. So sayeth the One Man Marxist Wrecking Ball of Fury (TM)

Key West Reader on July 22, 2011 at 4:18 PM

Has anyone seen the AARP ads, stopping waste and fraud will save the day.

Cindy Munford on July 22, 2011 at 4:18 PM

Time, once again, for Massrighty’s 5 point energy plan:

1. Drill/mine/extract all resources, wherever they are.
2. Build new refineries (to stop the madness of transporting unrefined fuel to distant refineries, then re-transporting the finished product. (This IS a green improvement.
3. Nuclear.
4. Any alternative energy plan (wind/water/garbage/switchgrass/solar) gets fast-tracked through the permit and appeals process.
5. Any assistance offered to any OPEC member is done in exchange for negotiated discounts on current unshipped purchases and future purchases. No discount/no help. (*This means you, Mexico!)

massrighty on July 22, 2011 at 4:19 PM

Let’s see, ban drilling by dragging out approvals and George Soros makes billions. Not that the two are related…

Wine_N_Dine on July 22, 2011 at 4:23 PM

Will never happen…

PatriotRider

. . . until January, 2013!

honsy on July 22, 2011 at 4:24 PM

Who owns Petrobras? Oh yeah – so how exactly would opening up US drilling help Obama get re-elected?

batterup on July 22, 2011 at 4:25 PM

I agree completely – DRILL BABY DRILL. Get these people in the Gulf States back working and open up drilling in other areas. We need to stop importing oil and we need to create jobs HERE AND NOW.

IlonaE on July 22, 2011 at 4:37 PM

Meh – who wants more jobs and lower gas prices?

hawksruleva on July 22, 2011 at 4:38 PM

Time, once again, for Massrighty’s 5 point energy plan:

massrighty on July 22, 2011 at 4:19 PM

Very sound ideas.

Red State State of Mind on July 22, 2011 at 4:39 PM

This should be a total no-brainer

Unless, of course, someone in power wasn’t interested in creating jobs…….

search4truth on July 22, 2011 at 3:46 PM

Drill, Baby, Drill!

You Betcha!

OnlyOrange on July 22, 2011 at 4:48 PM

Sorry for the double-post… the earlier one wasn’t showing up… :(
/facepalm

OnlyOrange on July 22, 2011 at 4:50 PM

this activity gap is created by the difference in the capacity willingness of oil regulators to oversee allow oil exploration and development activity and the industry’s capacity to invest

Fixed.

iurockhead on July 22, 2011 at 5:15 PM

This should be a total no-brainer. The federal government needs to improve the permitting process, retaining whatever gains have been made in the way of added safety, but no longer sacrificing the economic benefits the Gulf has to offer a nation that desperately needs them.

Oh, it is a no-brainer. Anybody should be able to see that about six-nine months before the election all of a sudden a bunch of permits will be approved for Gulf of Mexico drilling.

If they were approved now, the political bump from the improving job statistics might not last until the election. . . . and what sense is it to have the power to affect employment, if you don’t use that power to maximize your chances of re-election?

Narniaman on July 22, 2011 at 7:27 PM

Oh, it is a no-brainer. Anybody should be able to see that about six-nine months before the election all of a sudden a bunch of permits will be approved for Gulf of Mexico drilling…

Narniaman on July 22, 2011 at 7:27 PM

Won’t work. Floating oil rigs that have been moved somewhere else in the world don’t just come running back because little Bammie changes his mind again. They’ve been burned by him once, it will take a different president to convince them to take a chance on such an enormous investment again.

slickwillie2001 on July 22, 2011 at 7:33 PM

I’ve been saying the same thing for over 1 year. And was applauding McCain for saying it in the 2008 election stumping. Not that I expect anyone in DC to listen to anything I have to say, but please don’t be dissappointed if no one there listens to you or James Diffley either.

Robert17 on July 22, 2011 at 7:42 PM

Obambi only likes public sector union jobs, not private sector union jobs. And he absolutely despises jobs that create wealth for the middle class, especially energy.

Wanderlust on July 23, 2011 at 1:01 AM

This should be a total no-brainer. The federal government needs to improve the permitting process, retaining whatever gains have been made in the way of added safety, but no longer sacrificing the economic benefits the Gulf has to offer a nation that desperately needs them.

we stopped operating on anything resembling common sense in November 2008.

ted c on July 22, 2011 at 3:43 PM

Dem leadership has been engaging in anti-logic for years. If businesses make too much profit (in comparison to other businesses, and defined by them) those businesses must be made more inefficient so as to create more make-work jobs–you know, like Federal jobs are.

The fact that businesses have the option to close shop and move to a new environment is just another problem requiring a Europen solution in the minds of these enlightened dimwits.

rwenger43 on July 23, 2011 at 11:06 AM

And he absolutely despises jobs that create wealth for the middle class, especially energy.

Wanderlust on July 23, 2011 at 1:01 AM

I like your turn of phrase. For months we’ve been hearing wealth parasites–government overlords–talk about creating middle class jobs. Fools.

Anybody can create a job. However, only the market can determine the earning potential of that job. The only way a government can create a middle-class job is by artificially inflating its value and protecting the job from the accountability of the market.

But since energy is in demand–not by government fiat but by demand in the marketplace–these jobs would be true wealth-producers, as you say.

rwenger43 on July 23, 2011 at 11:16 AM

Picking up the Gulf oil permitting pace could result in 230,000 jobs

Which is why Obama won’t do it if he can help it. People don’t understand the depths of his depravity. It is difficult to comprehend that America fell for his flattery.

scotash on July 23, 2011 at 12:43 PM