There have been recent proclamations, mostly from conservative quarters, that President Obama has been a major obstacle to oil industry activity. And some of the left have applauded him for such efforts as not approving the Keystone border crossing. Most here should already know I’m an oil patch conservative and obviously don’t agree with all of the POTUS’s social/tax agenda. But that doesn’t stop me from offering the reality: President Obama has been the best thing to happen to the oil patch in a long time. Ok…OK...OK…not so much anything he has done per se. The rise in the price really gets the credit. But the POTUS has been just as willing to take advantage of that fact as the oil patch. We both have a great vested interest in increasing domestic oil production.
From Oct 2012:
The administration has issued more DW drilling permits in 2012 since 2007. Through Oct 2012 the govt has issued 89 permits for news wells in water depths greater than 500’. In 2007 a total of 106 permits were issued under the Bush administration.
Environment groups such as Oceana have asked the administration to stop issuing permits because the feel the new regulations aren’t sufficient to prevent another BP like disaster. The administration has refused those requests.
From Rigzone this last Monday: “The Gulf of Mexico is in the early stages of an extended growth cycle and is poised to remain one of the strongest offshore markets in the world in terms of deep water activity. Overall, rig count and exploration and production (E&P) activities are at pre-Macondo levels and look to continue on an incline for the next couple of years. The rig count for deep water rigs is forecasted to be the highest it has been in five years and even higher in 2013. In the first half of this year, the Gulf of Mexico is expected to have 46 competitive rigs with this number projected to increase by mid-2014 to just over 50 competitive deep water units.
And if anyone doubted the industry didn’t expect continued support from the current administration: In 2012 eight new build floaters entered the Gulf of Mexico with another eight expected to enter in 2013.Thus far, five new build floaters are forecasted to enter the 2014 GOM market. Investment levels in 2012 were expected to equal the pre-Macondo peak and push well beyond it in 2013. The govt has approved 332 deep water permit applications. In December 2011 the administration held its first offshore auction since the BP oil spill, granting leases for more than 20 million acres in federal waters. The leases are worth more than $330 million to the federal government with the potential to produce 400 million barrels of oil. And that $330 million in just the lease bonuses. If that 400 million bbl target happens that’s another $6 billion in royalty payments to the govt. Everyone, including the POTUS, loves that mailbox money.
And not just an increase in drilling activity: the installation of a forecasted 13 floating platforms by 2016 will provide the additional capacity required to push GOM crude production above and beyond its 2010 record. Over the next five years, a forecasted 49 deep water fields are expected to come online in the Gulf of Mexico.
And all of this has and will occur under President Obama’s watch. The right wing can whine about how little onshore development is happening on govt lands. But as they say if you want to learn the truth just follow the money.
