Grim reaper photoshop credit: Manly Rash
Ed Morrissey at Hot Air has an exclusive sneak peek at the economic havoc that Obama’s eco rules are wreaking. Bottom line: More than 800,000 jobs are at risk in a broad cross-section of industries.
Read the details here.
On a related note, the Obama’s offshore drilling moratorium isn’t the only thing roiling the oil and gas industry:
When deepwater drilling restarts, it will do so in an all-new regulatory environment. The regulatory agency itself is new. The Macondo tragedy hastened and deepened a preordained overhaul of the old Minerals Management Service. At the new Bureau of Ocean Energy Management, Regulation, and Enforcement (BOE), regulators—now separate from resource and revenue managers—are busy.
…Already, BOE has issued notices to lessees that require additional technical and environmental information on applications for permits, and not just for deep water. Operators complain of a de facto moratorium in shallow water caused by new permit requirements and regulatory confusion. Meanwhile, stricter National Environmental Protection Act compliance for OCS leases is under consideration. And newly updated “idle iron” guidance presses operators to plug nonproducing wells and remove inactive platforms within strict time limits, prompting the National Ocean Industries Association to wonder if state and federal regulators will approve the work.
…Looming over this uncertainty are federal budget proposals calling for higher taxes on producers, higher fees, and penalties for leases on which production doesn’t begin promptly enough to suit regulators. Congress wants to remove liability limits for deepwater operators. And producers have no assurance deepwater drilling will resume Nov. 30. Bromwich told reporters on Sept. 14 that BOE won’t issue permits until applicants satisfy the new regulations—the regulations still under development, which might or might not be finished by Sept. 30.
More than 8,000-12,000 jobs are in jeopardy. With a regulatory tempest raging, a temporary moratorium, however painful now, is not the biggest or most enduring threat to offshore drilling and related employment…
And from TheStreet.com: Obama Drill Ban May End, But Drilling Delays Won’t: Poll
The debate over the Gulf of Mexico doesn’t just have potential repercussions for the oil spill companies led by BP, that is, if BP is ever allowed to drill in the Gulf again. All the oil spill companies, including deepwater engineer Halliburton(HAL), rig operator Transocean(RIG), and Anadarko Petroleum(APC), have major business interests tied to the Gulf.
Anadarko has been the most optimistic of the group, saying at a recent Barclays Capital conference that it is ready to begin drilling again the moment the ban is lifted in November.
Transocean has been moving rigs out of the Gulf of Mexico for contracts elsewhere, and currently has more rigs idled than has been common in its recent history.
Halliburton is sticking with its earlier estimate that the net impact of the oil spill and drilling ban on its earnings this year will be less than 10 cents per share.
All the oil and gas companies have been chiming in on the issue as the oil spill itself receded into the deep and into history. The CEO of Total (TOT_) recently told the Wall Street Journal to expect 20% higher operating costs in the Gulf. The Total CEO cited permitting delays as one reason, and Noble Corp (NE_) has also claimed that permitting delays, even on shallow water projects, are already a major headache in the Gulf and will continue to be a major issue.
One more grim item from Thomas Pyle in the Examiner on White House book-cooking:
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One day after being sworn into office, President Obama issued a memorandum to the heads of executive departments and agencies “reaffirming the commitment to accountability and transparency.”
Yet, with the majority party scrambling for votes and a grim November election forecast on the horizon, qualities such as transparency and openness have taken a back seat to political spin.
The administration itself offered the latest example of chicanery in its analysis of the economic effects of its moratorium on deepwater drilling – an analysis that found a loss of ‘only’ 8,000 to 12,000 jobs in the Gulf.
Though the administration’s dismissive attitude toward its own actions which left thousands of U.S. workers in the unemployment line are disheartening, the most troubling aspect of its report was the numeric sleight of hand the administration performed to minimize the appearance of the damage they had done.
Administration analysts cut their estimates by an unexplained 40 to 60%. Without these unexplained and unexplainable reductions, the estimate of lost jobs in the Gulf leaps to nearly 20,000 for just the 6 months covered by the original drilling ban. That’s just employment fallout. The report also fails to account for GDP, wages, or tax revenues lost.
The combination of misdirection and election pressure has the makings for a perfect policy storm. Congress is attempting to pass anything which can be leveraged for a campaign victory, while analysts are apparently being pressured to remain silent regarding damaging data…
August 31, 2014 09:29 AM by Doug Powers
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