Ranting about the Oil Drilling Moratorium

[ccr1138.livejournal.com]

Moratorium, suspension .... call it what you will. A pile of excrement by any other name would smell as putrid.

This is from something I posted on a political blog, in answer to a person who thought the moratorium didn't affect any active wells, and didn't understand why delaying drilling for 6 months is such a big deal:

First, you are misinformed about the moratorium itself. The first moratorium shut down 32 rigs with an estimated impact of up to 50,0000 jobs. Pundits are predicting that entire blue-collar communities are going to be ruined, probably permanently. Obama's latest suspension gambit will shut down 33 rigs employing 46,000 people directly, and many thousands of oil service and manufacturing firms indirectly. This is the very definition of adding insult to injury.

Second, you, like a lot of people, don't understand the oil business. Those rigs cost billions of dollars to develop and hundreds of thousands of dollars PER DAY once they're rolled out. The companies can't afford to let them sit idle. They must start producing on schedule if the creditors and investors are to get paid. So yes, a 6-month delay can easily bankrupt a company. Given the uncertainty and hostility, oil companies are scrambling for ways to stay afloat. To my knowledge, at least four drilling rigs are already on their way across the Atlantic, with more to follow shortly. Because of the logistics and cost of moving those rigs, I doubt they will ever come back to this side of the world.

If you look at recent polls, a majority of people in the Gulf states don't agree with the moratorium. These are the folks directly impacted by the spill. They've suffered enough economic devastation lately with hurricanes and now this, but they are still wise enough to know which side their bread is buttered on.

Finally, the uncertainty that is created by a president who interferes directly in industry without going through any sort of due diligence or due process freezes the hearts of business people throughout the country. That's one of the big reasons why nobody's hiring. CEOs are wary of what other sweeping changes Obama might ram through using his congressional majority or simply enact via executive fiat. In a climate where the president feels free to take over certain industries, overhaul huge portions of the economy despite protest from a majority of citizens, sue a sovereign state of the union for attempting to enforce federal law, and shut down operations of rigs that have passed inspection and complied with all federal requirements, etc., well, it's no wonder business people and investors are hunkering down until we the people can get Mr. Hope & Change out of the White House.

The moratorium has not only affected deepwater drilling. The administration is putting barriers up against all E&P. From the article linked above: "To date, and despite assurances from the White House and the Interior Department, about one-third of the shallow water fleet has been idled by the application of what can only be called a de facto moratorium," said Jim Noe, senior vice president and general counsel of Hercules Offshore. "Unless Interior changes course, and matches their action with their rhetoric, another third of the fleet will be idled and thousands more workers will be furloughed within the next few weeks."

Finally, I must point out that the reason oil companies are engaged in extremely dangerous deepwater drilling is because safer alternatives have been put off limits by short-sighted bureaucrats and environmentalists. What would be easier to clean up, an accident in the Alaskan wilderness or a spill five miles deep in the Gulf? BP takes the lion's share of the blame for this disaster, but the environmentalists bear a part of the responsibility for their being out there in the first place.