The People of America's Oil and Natural Gas Indusry

Moratorium Is Lifted, Impacts Remain

Jane Van Ryan

Jane Van Ryan
Posted October 13, 2010

After a months-long investigation, the Department of the Interior made the right decision and ended the deepwater drilling moratorium. Interior Secretary Ken Salazar said it was "appropriate" to end the ban because safety measures have been strengthened and spill response capabilities have been improved.

But as API President and CEO Jack Gerard points out, lifting the moratorium is not likely to put oil and natural gas workers back to work immediately. The process to obtain drilling permits in both deepwater and shallow-water is time-consuming and difficult. API hopes the Interior Department is given the resources it needs to process permits quickly and efficiently.

In the meantime, the moratorium continues to have a negative impact on U.S. jobs as well as U.S. energy security. Consider the following recent reports which put the announcement ending the ban into a broader, global context:

  • Executive Director Nobuo Tanaka of the International Energy Agency warns that delays to new offshore deepwater oil and natural gas drilling could have a "huge" impact on world oil markets.
  • Seahawk Drilling Inc. has sold one of its shallow-water jackup drilling rigs to Essar Oilfield Services Ltd., which is a unit of a firm headquartered in Mumbai, India. Seahawk Chief Executive Randy Stilley says "We've got a lot of idle rigs as a result of the unofficial moratorium...If I could sell a few more at that price, I think we would."
  • The administration is acknowledging that new drilling regulations will raise the cost of drilling and could delay offshore development and destroy jobs. API's Upstream Director Erik Milito says, "We cannot have an approval process that creates unpredictable delays that could place at risk the flow of domestic energy in our country."
  • The United Kingdom has rejected the idea of imposing its own deepwater moratorium. Reuters reports the U.K recognizes that deepwater exploration is "vital for the country's energy security."

The oil and natural gas industry wants to work with the Interior Department to put people back to work and to produce more domestic energy for American consumers. The industry supports 9.2 million U.S. jobs and could provide many more under policies that encourage U.S. energy exploration and production.