Obama administration needs to ease chokehold on drilling permits: An editorial

02 01, 2012 by The Times-Picayune

President Barack Obama made grand pronouncements about domestic energy policy in his State of the Union address, vowing to pursue an "all-out, all-of-the-above strategy that develops every available source of American energy" to create jobs and meet the nation's energy challenges. Many Louisianians and other residents in the Gulf region, however, are still waiting for the president to deliver on such promises by ending the slowdown of new drilling permits in the Gulf.

Drilling companies must meet new safety standards after the BP oil spill in 2010, and the firms understand that. But the administration doesn't have an efficient process to handle permit requests in a timely fashion while applying the new standards. It's up to the president to provide the resources and the political will to change that.

There's urgency in this request. A survey by Greater New Orleans Inc. found that small and medium-sized companies in our drilling industry are cutting employee salaries, severely dipping into their cash reserves and moving business out of the Gulf of Mexico to stay afloat. The study also found that almost half of these companies are losing money, and some business owners have reached into or depleted their personal savings to remain in business.

The report called these companies "hidden victims" of the administration's policies, because they are still operating and have largely avoided laying off workers, so their strain has gone mostly unnoticed. The slow permitting process is asphyxiating many of these firms and stunting Louisiana's recovery.

President Obama has noted that domestic oil production is up. But production cannot be maintained or increased -- as the president has said he'd like to do -- if not enough new wells are being drilled. Besides, many of the industry's jobs are tied to the labor-intensive process of exploration and drilling. That's why an efficient permitting process is crucial.

The administration, however, continues to drag its feet. The Interior Department issued only an average of two deepwater drilling permits per month in the past three months, according to GNO Inc. That's a 66 percent decrease from pre-spill levels. Many of the small businesses in the region's oil industry won't survive or will face severe downsizing unless the permitting pace picks up.

This is not an argument to abandon stricter safety standards. On the contrary, Louisianians suffered the brunt of the spill and don't want a repeat of that disaster. But independent scientists have long established that the blanket moratorium after the spill and the de-facto moratorium that followed weren't needed to improve safety.

Louisiana needs a chance for recovery to take hold. That's why the president needs to achieve an efficient regulatory system to implement new drilling standards without delaying safe exploration and production in the Gulf.