OFFSHORE DRILLING:
Summit puts focus on Gulf activity
EnergyWire:
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HOUSTON -- The race for the White House moves through Mississippi today to shine a light on industry complaints of slow progress in offshore drilling.
Today the Gulf Economic Survival Team (GEST), a nonprofit founded to fight the 2010 moratorium on offshore oil and gas drilling, will host its first Gulf Coast Energy Summit in Biloxi. GEST is sponsoring the event with the support of the Consumer Energy Alliance, the Mississippi Energy Policy Institute and related trade organizations.
The event is expected to draw national attention, as two of the three leading candidates for the Republican nomination for president will deliver remarks. Former Pennsylvania Sen. Rick Santorum and former House Speaker Newt Gingrich of Georgia are confirmed attendees.
Though it is destined to be seen as just another stop along the 2012 presidential campaign road, organizers of the summit insist that their main goal is not political. Instead, they aim to put a brief national spotlight on what many in the industry feel is an issue that has drawn too little notice: the slowdown in permits for drilling in the Gulf of Mexico.
"We see the Gulf of Mexico as being an economic engine, and our focus is to re-energize the Gulf of Mexico, to get us back to work there," said GEST executive director Lori LeBlanc.
The Gulf drilling moratorium enacted in response to the Deepwater Horizon rig explosion and oil leak gave time for the Obama administration to reorganize regulators and draft new rules governing permitting. Though the administration has stated that the flow of permits is back to pre-2010 spill levels, offshore operators and their supporters complain that the statement is misleading.
While the total number of permits moving out of the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement could be the same as before the spill, critics complain that more permits are required than ever before.
LeBlanc said drillers face a lengthy process in getting approvals to drill long before they can start operations that actually reach oil and gas fields. Her office estimates that the number of "unique new wells that have the potential to reach hydrocarbons" being drilled today is only about a third of the number drilled before the Macondo well spill.
Offshore well operators estimate that oil output from the federal waters of the Gulf has dropped by about 230,000 barrels a day. The impact of the Gulf spill on offshore output is overshadowed by the rapid increase in production from onshore tight oil extraction, most of it from privately held land.
Oil and gas companies admit that offshore operations are rapidly picking up despite their complaints of a permitting backlog. Nevertheless, organizations and the Gulf Coast communities that rely on offshore drilling for economic support aim to boost production to above pre-Macondo spill levels. Doing so, they say, would be a boon to the nation's economy as a whole.
"I spend a lot of time on the regulatory aspect in the Gulf of Mexico, and every chance I can, I speak across the nation, whether it's in San Diego, Virginia or anywhere else in between, reminding folks that we have a huge opportunity," said Scott Angelle, secretary of Louisiana's Department of Natural Resources. Angelle helped to organize GEST during his time as interim lieutenant governor of his state.
LeBlanc said she has developed a good relationship with people at BOEM and BSEE and that they show genuine concern for their cause. Angelle and the people at GEST and at other organizations say they believe that they can streamline the process without necessarily doing away with much of the new regulations, a politically risky proposition for the current president.
Many industry insiders complain that BOEM and BSEE are understaffed, which they say could be the biggest cause of the slowdown. GEST agrees that these agencies need more resources to process permit applications.
But they see other areas where regulations could be tweaked or streamlined to give companies more flexibility in developing new offshore wells. LeBlanc recounts one case in which a regulatory tweak replaced the word "should" for "must," resulting in what she says are needless delays as companies put in extra effort to meet what they now see as a more stringent and tightly enforced requirement.
On the stump
Campaign politics could make the dispute over offshore permitting with Washington more contentious than what Angelle and LeBlanc now describe.
Gingrich and Santorum are expected to use the platform as a forum for their efforts to win more Southern votes as they fight for the nomination. The summit comes just ahead of tomorrow's primaries in Mississippi and Alabama.
The candidates have sharply criticized President Obama and the Department of the Interior on the campaign trail, complaining that the two are responsible for rising gasoline prices by blocking industry efforts to produce more crude oil from federal lands and waters. But LeBlanc said that any harsh words that may come out of the mouths of the two candidates will be seen as aimed at Obama and not the staff members at BOEM and BSEE she has been struggling to work with.
Having the candidates attend is simply a vehicle to draw public attention to GEST and other groups' causes, she said.
"Having the presidential candidates obviously brings national attention," LeBlanc said. "It makes sure that this is a national cornerstone issue in the presidential race, and, quite frankly, it needs to be when you consider that we have such high gas prices, high unemployment and record deficits."
Mississippi Gov. Phil Bryant (R) and Alabama Gov. Robert Bentley (R) are among the confirmed attendees. Media reports Friday said that Bryant has endorsed former Massachusetts Gov. Mitt Romney for the presidential nomination.