Obama’s Second Term a Boon for Offshore Gas Drillers?
The big question in the energy world is: Will a second Obama term mean bad news for offshore oil drilling?
Clearly, the energy companies would have been happier with a de-regulator like Romney. Yet the simple answer going forward is: probably not.
In 2012 the Obama administration issued the most deepwater oil drilling permits for the Gulf of Mexico since 2007. With oil output in October hitting a 17-year high, the search for all kinds of energy sources, including renewables and natural gas, is at an all-time high. Some is intended for domestic use, much—especially natural gas—for export.
The U.S. Bureau of Safety and Environmental Enforcement, which regulates offshore drilling, issued more than 90 permits in 2012, compared with 32 in 2010 and 28 in 2011.
During the campaign President Obama said that one of his deficit-reducing measures would include taking some tax incentives away from the energy industry. But the reality of getting the energy companies to pay higher taxes with a Republican congress still in the majority will be tricky at best.
The big winners in the energy sector post-election may be the guys who make all that drilling equipment for gas and oil rigs and related fluids, rig technology, petroleum services, supplies like transfer pumps and all those companies that provide maintenance, repair and spare parts. Judging by truck traffic alone the economy of southern Louisiana looks to be booming.
Despite the growth of offshore drilling, the Obama team insists that new drilling is taking place under tougher safety standards, imposed after the 2010 Deepwater Horizon disaster. Oceana and other environmental groups have asked the president to slow it down, that regulations are still insufficient to prevent more disasters. Yet Exxon, Shell and BP are among companies out there exploring fast and furiously. It’s possible the fed may even permit firms to explore in deepwater off the East Coast, areas that have long been considered off limits.
It is somewhat ironic that all of this boom continues even as the U.S. Coast Guard has determined that a sheen BP reported in October near the Deepwater Horizon blowout site matches samples from the 2010 spill. According to a BP spokesman, the oil most likely came from a bent pipe that once connected the Deepwater Horizon rig to the well head about 5,000 feet below the surface.
“We think the reopening of the Gulf, especially with regard to deep-water drilling, is an accident waiting to happen,” Jacqueline Savitz, deputy vice president for U.S. campaigns at Oceana, told Bloomberg Businessweek. “What we’ve been asking the government is: don’t sell more leases.”
That may not be in the cards.
Though the president received just 41 percent of the votes in Alaska, and the state’s governor has said he has “waged a war on American jobs” and has an agenda to stop development of Alaska’s oil and gas resources, it is anticipated that Shell will, after years of wrangling and some $4 billion, drill it’s first rig in the Arctic waters off Alaska sometime during the summer of 2013.
Should the United States under a second Obama term ramp up off-shore oil production? Tell us in the COMMENTS.