Obama and Offshore Drilling

Today in Nevada, president Obama is promoting his announcement of "expanded" off shore drilling in the State of the Union Address. At that time, Obama said, "I’m directing my administration to open more than 75 percent of our potential offshore oil-and-gas resources." That really sounds like a big move towards energy self-sufficiency until you learn what Obama is actually doing. The key word used by Obama is "potential". The president is not opening up 75% of all offshore oil and gas for drilling. No, he is limiting what he is doing to 75% of areas already designated by the Interior Department as places appropriate for drilling. Last year, the Interior Department put forth a plan for oil and gas drilling that severely restricted the places where leases would be sold. Many areas (like the Atlantic coast, for example) were completely removed from drilling. Obama is not changing these limitations. Instead, he is opening up only 75% of the limited areas chosen by the Interior Department. Simply put, Obama is trying to look like he wants to expand drilling for oil while, in truth, he is restricting it.

To make matters worse, Obama knows that he has already effectively killed a big portion of the off shore drilling industry in the USA. Drilling in deep waters is done by big floating rigs which cost hundreds of millions of dollars to build. These rigs have to remain in operation or their owners lose millions each month. When Obama stopped all drilling in the Gulf of Mexico for nearly a year, the owners of the rigs moved them at great expense to new locations. Many went to Brazil. Others went to the African coast. More went to additional locations. So now these big rigs are drilling elsewhere. When Obama reopens off shore land to drilling, the rigs will not rush back. These rigs are under contract to drill elsewhere. Even once those drilling contracts end, it will be much more porfitable to continue drilling in the new locations rather than incurring the multi-million dollar cost to bring the rigs back to US waters. Indeed, by the time the leases are actually auctioned off by the government, it will likely be next summer. Permitting for drilling will then delay any drilling until at least after the election. No company in it right mind would spend millions to bring back drill rigs when the possibility remains that just after the election Obama will again find a reason to stop the drilling.