The People of America's Oil and Natural Gas Indusry

U.S. Offshore Drilling at Virtual Standstill

Jane Van Ryan

Jane Van Ryan
Posted August 18, 2010

A new Gallup poll shows Americans are divided down the middle over whether to lift the deepwater drilling moratorium. Overall, 47 percent of respondents say the ban should be lifted, while 46 percent say it should remain in place.

Interestingly, the poll also shows 64 percent of Democrats say the drilling freeze should continue, while 66 percent of Republicans favor removing the moratorium.

Political leanings aside, there's no doubt that the moratorium and the Department of the Interior's new offshore regulations are having a severe impact on oil and natural gas development. Vladimir at RedState points out that while our elected officials say they want energy independence, the "virtual shutdown of the Gulf of Mexico oil and gas business is the biggest, most dramatic retrenchment from that goal in history."

Vlad's research shows that the administration's actions have greatly affected shallow-water drilling, leading to the near shutdown of the U.S. offshore drilling industry:

"...exactly two new drilling permits have been approved for shallow water wells (water depth less than 500 ft) since the deepwater moratorium began. Both of those permits were for gas wells.

"No new oil well permits have been approved, and the permitting requirements have been increased and obfuscated to the point that it's unclear whether any new oil wells will ever be permitted.

"Only sixteen shallow water rigs are working, mostly fixing older wells, not drilling new ones. Shallow water rigs, not just their deepwater cousins, are beginning to exit the Gulf, bound for foreign shores.

"No new seismic permits have been granted. That will slow down future exploratory drilling.

"No pipeline permits have been granted."

These figures beg the following questions: With U.S. offshore drilling at a virtual standstill, how will the United States make up for the lost production? Where will the nation--and U.S. consumers--get their oil?