A moratorium on drilling in the Gulf of Mexico after the 2010 Deepwater Horizon oil spill plus a longer offshore oil and natural gas permitting processes will cost the U.S. more than $24 billion in lost oil and natural gas investment over the next several years, according to a report commissioned by the American Petroleum Institute.
The study by the energy industry trade group also found that, because of the moratorium and longer permitting process, capital and operating expenditures fell over the last two years by $18.3 billion.
The region saw $8.9 billion and $146 billion in investments in crude oil and natural gas, respectively -- about 6 percent of global investment dollars. But that figure would have been closer to 12 percent for 2011 had the drilling moratorium not been put in place, the report said.
As a result of decreases in investment due to the moratorium, total U.S. employment is estimated to have been reduced by 72,000 jobs in 2010 and approximately 90,000 jobs in 2011, the report said.
Since April 2010, 11 drilling rigs left the Gulf for Brazil, Egypt or Angola, generating more than an estimated $21 billion in investments in those countries.
More than 130 offshore drilling projects have been delayed by almost a year and half, since the moratorium, compared with 46 projects being delayed pre-moratorium.
A regulatory environment that eliminates unnecessary permitting delays and maintains competitiveness with development opportunities in other regions of the world would provide a first step to revitalizing the offshore oil and gas industry, the report said. Additional access to offshore areas currently off?limits remains a key missing component of U.S. energy policy, and would provide substantial additional gains to the nation in terms of energy security, employment and government revenue.
Melissa Schwartz, a spokeswoman with the Bureau of Ocean Energy Management, Regulation and Enforcement, said the report published this week distorts the date and ignores the facts.
She said since the reformed regulations have been implemented in February of last year, the Bureau of Safety and Environmental Enforcement approved 290 permits for deepwater operations, on top of the 98 shallow water permits the bureau previously approved.
We will continue to take steps to expand responsible production, and the numbers speak for themselves, Schwartz said.
API President and CEO Jack Gerard used the study to renew his call for a shift in the nation's energy policy.
We're not doing what we should be doing to help meet our nation's energy needs, deliver revenue to our government, and create jobs, Gerard said in a statement. This is not just hurting people in the Gulf, it's hurting people across the country.
The report comes as the Department of the Interior announced this week that onshore oil and natural gas lease sales generated about $256 million in revenue for American taxpayers in the last year, a 20 percent increase over the 2010 level.
On Dec. 14, the Department of the Interior also conducted the first new lease sale in the Gulf of Mexico, which generated $712.7 million for the Treasury.