Last April 20, tragedy took the lives of 11 men as they worked aboard the Deepwater Horizon. A year later we still mourn the loss of Jason Anderson, Dale Burkeen, Donald Clark, Stephen Curtis, Gordon Jones, Roy Wyatt Kemp, Karl Kleppinger, Blair Manuel, Dewey Revette, Shane Roshto, and Adam Weise. And we continue to diligently examine the causes and consequences of the accident and its impact on our industry and our national energy security.
Recent events all over the world remind us of the crucial role that energy plays in our day-to-day lives. Unrest in Egypt, Libya, Syria, and elsewhere in the region has caused the price for a barrel of oil to rocket through $100, prices at the pump are over $4 per gallon in some areas, and the disaster in Japan quickly became a story about energy after power failed at the Fukushima nuclear plant.
Even as we watch these events unfold, we need to heed their warnings: We simply have to make our country more energy secure, both by ensuring the safety of our existing energy infrastructure and by reducing our dependence on foreign oil supplies.
High fuel prices and potential disruption of oil supplies from the Middle East have prompted calls from many for the Administration to open up the Strategic Petroleum Reserve (SPR).
Whether or not the decision is made to tap the reserves, the Administration has truly painted itself in a corner. We would not even be having the debate over use of the SPR, had more been done to increase domestic oil production off our own shores, particularly in the Gulf of Mexico. Why don’t we produce more of our own oil – vast amounts of which lay untapped beneath the ocean?
Things got off to a positive start in the early days of the Administration. President Obama announced that the Interior Department would consider opening new offshore areas to development. Then came last year’s Macondo spill in the Gulf. Drilling and exploration activities in existing fields ground to a halt and have only just started to slowly resume. Even more alarming is the fact the new exploration in the Eastern Gulf of Mexico and in potential areas along the eastern seaboard of the United States has been taken off the table for consideration until at least 2017. The fewer the options, the more we remain dependent on foreign sources of oil.
Current oil production in the Gulf is down, according the Energy Information Administration (EIA), by nearly 300,000 b/d since last April when the Interior Department imposed a moratorium on exploration and production following the Macondo accident. Just over a year later, despite the lifting of the moratorium, the permitting and leasing process remains agonizingly slow in the Gulf of Mexico. While the Interior Department recently began issuing deepwater drilling permits, most were for projects well underway before the Macondo spill. Many more applications, thought by industry to have met the new safety standards, are in the queue or have been returned to companies for further paperwork before the government will even put them in the queue for consideration. Approvals for shallow-water permits have also slowed to a trickle, even though we’ve been drilling safely there for decades. Equally disturbing is that it appears there will not be even one lease sale held in all of 2011.
In addition to the long-term consequences regarding our energy security and reliability, delayed permits and exploration plans are having a very real, immediate impact on the economy of the Gulf Region. Thousands of industry workers are either out of work or face very uncertain futures. Some companies have moved equipment out of the Gulf in search of productive work elsewhere around the world. Federal, state, and local governments are collecting less in taxes and royalties at a time when their budgets already are under severe pressure. Other countries understand this concept and are actually exploring and developing oil and natural gas off their own shores. They will have oil to sell, and we, no doubt, will pay the price.
While the Macando spill was an event that never should have happened, it does not represent an insurmountable technical challenge that should shut down oil and natural gas drilling across the board. The United States has not seen fit to shut down the nuclear industry in the wake of the disaster in Japan, just as we do not shut down the airline industry after the tragedy of a crash.
The facts remain that we still need the energy resources that can be safely developed offshore. Furthermore, we’ve drilled more than 50,000 wells in the Gulf over the years. We know how to do it safely, and the lessons we’ve learned and applied from Macondo will make drilling even safer. The memory of the men who died working on the Macondo well will remain a stark reminder that safety is priority one as we continue to explore and develop offshore oil and natural gas.
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