Proposed National Ocean Policy is Bad Politics and Worse Policy (Rigzone)
by: Michael Whatley
Both energy consumers and those involved in the oil and gas industry understand the positive benefits of expanding hydrocarbon production to our economic future. Study after study shows the industry is creating almost $1 billion in daily economic activity and may be helping the nation avoid a second recession. Polls show that the majority of voters can see this positive impact on a daily basis, especially those living in regions around the major plays. In spite of this, bureaucrats in Washington are blocking, or at the very least limiting the industry’s access to our natural resources. The latest example is something called the National Ocean Policy. Never heard of it? Most people haven’t. But you need to know what it could do to your pocket book.
The new National Ocean Policy is the latest of a string of recent actions by the federal government that hamstring our ability to harvest oil and gas resources off our shores. As one example, the Gulf of Mexico moratorium shut down all permitting and drilling activity in the region for many months, idling rigs and leaving thousands without jobs. This was followed by a five-year Outer Continental Shelf leasing plan that proposed the fewest lease sales of any plan since the program began in the 1980s.Michael WhatleySource: Consumer Energy Alliance
Now, the Obama Administration is poised to implement a National Ocean Policy that will involve mandatory ocean and coastal zoning, led by nine government “regional planning bodies” overseen by an unelected 54 member, White House-ledNational Ocean Council.
While the Administration claims the plan won’t block additional offshore development, it is difficult to reach that conclusion when details of the plan are loosely defined. Representatives from the U.S. House Natural Resources Committee have repeatedly requested additional information on the plan. The requests have gone unanswered. No doubt House members are wondering what potential impacts the new plan may have on offshore development in light of prior restrictive actions in the Gulf and other offshore areas.
Considering the National Ocean Council last summer proposed to “reduce the impacts of stressors over which we have more direct control,” such as “resource extraction,” in reference to addressing climate change issues, it would appear the apprehensions of the Committee members are well placed.
Interior Secretary Ken Salazar has already reversed previous plans for expanded offshore development, citing the National Ocean Policy Executive Order in part as justification. This means one office of Administration is justifying its actions based on another office that no one knows anything about. This didn’t sit well with groups like the Outer Continental Shelf Governors Coalition, which recently sent a letter to the President saying they are “concerned about the lack of communication from the federal government on critical matters that affect our coastal development.”
Advocates for the policy say they only wish to create a framework for enforcing current offshore regulations. But this is a tough argument to swallow, considering the foundational document for the policy states that the initiative will “require clear and easily understood requirements and regulations, where appropriate, that include enforcement as a critical component.”
One thing is certain: development of the nation’s offshore resources holds great promise for our economy. In spite of these recent roadblocks, offshore oil and gas activities were responsible for contributing roughly $121 billion in economic output last year. Future potential is even greater, with reports estimating that total government revenues derived from offshore production could reach $2.6 trillion.
With anemic economic growth in other industries, mulishly high unemployment, and an election looming, Interior and the broader Administration should transparently move to free up the industry and allow expanded production of our offshore resources. Their reluctance to do so speaks volumes about the Administration’s feelings towards a proven offshore resource base.
We know offshore production can create jobs and economic growth in areas hit by overly cautious government intervention. Studies have shown that just returning to historical production levels in the Gulf of Mexico could provide between 110,000 to 230,000 jobs, with larger offshore development having the potential to create over 1 million jobs. Our offshore resources present the Administration with the ability to practice smart politics and sound economic policy. The National Ocean Policy fails the President, and the American people on both counts.
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