Offshore Stall - How Regulations Affect the Industry Report from Washington
It stands to reason that eventually, American oil and natural gas production will fully resume in the Gulf of Mexico (GOM), with industry activity rising back to pre-spill levels. Ultimately, given the industry’s resourcefulness and the vast resources still available in the Gulf, it is not so far fetched to imagine that GOM production levels will someday easily surpass current expectations.
However, following more than a year of aggressive and continuous federal policy to regulate offshore production, the industry and the country for which it supplies energy is still unnecessarily traumatized by the government’s actions. Though future GOM production may well be fruitful, it should not be taken for granted. President Obama’s administration, in just a few short months, has had a negative effect on the nation’s energy supply and economy.
In the aftermath of the Deepwater Horizon incident and ensuing oil spill, there was no doubt that a thorough review of the accident and its causes was necessary. A temporary moratorium on offshore production might have seemed reasonable if those imposing such restrictions understood or appreciated the effects of such a moratorium over a long period of time. At the time of the spill, President Obama called for a halt to GOM production at the 33 operating exploratory deep-water rigs. His administration imposed a six-month suspension of new deepwater drilling permits and the canceled leasing plans for the Western Gulf of Mexico, offshore Virginia and Alaska. It was a harsh sentence, but even harsher and more damaging over time has been the slow and silent defacto moratorium imposed since the ban’s official “lift” last fall.