Thursday, December 2, 2010

New Environment for Offshore Drilling: What the new Obama Administration Plan does not mean?

The blog today takes on the debate that the new plan ushered in by the Obama’s administration, denying off-shore drilling in the eastern gulf, will lead to America’s dependence on foreign oil or energy sources. It is almost an aberration that America’s Energy Source debate takes on a new turn every time the government makes a conscious effort to correct for failures of participants in the energy industry. And, in many cases than not, the politicization of the process of reform often comes from those who know better; but, are determined to fool the public or downgrade honest effort by this administration. Off-shore oil drilling reform has explicitly begged to be attended to after the British Petroleum oil spill.

Many oil industry experts and insiders knew a change was coming after the beleaguered multinational corporation poured over 178 million gallons of oil into the Gulf Coast waters. Had the present administration not examined the status of the nation’s demand for oil from offshore sources and weighed it against the current nightmare of environment pollution and contamination, maybe it wouldn’t have rolled out the current plan of the administration to roll back offshore drilling in the eastern gulf. For those who are keen on the truth, there are million miles of this country, where on- and off-shore oil exploration activities are still continuing under already issued licenses to drill by the government. Except for some Federal land and ocean zones, the exploration of oil and gas can still continue till the hearts of oil source marauders contend.

While this new plan does not expressly forbid offshore drilling in other parts of the country where known exploration had continued, even with the associated risk of environmental pollution, it does include a number of restrictions and guidelines that make the oil industry evaluate the activities of its members, especially with off-shore drilling in a place as the Gulf of Mexico. Under the new plan from the off-shore five-year plan of the administration, oil companies are allowed to develop existing leases, but restrained from expanding into new areas for now. Under the old presumptive plan that was rolled out nine months ago, Obama’s Administration supported the exploration of oil and gas drilling in the Atlantic and Eastern Gulf of Mexico. The reality of the experience of the British Petroleum disaster had made the administration back track.

According to the Secretary of Interior Salazar, result of the Deepwater Horizon oil spill have thought us some lesson, most important of which is the need to proceed with caution and focus on creating a more stringent regulatory regime. All other undeveloped leases in the Gulf of Mexico, with lease licenses already issued can still proceed under the current plan. Now if there are politicians who have problems with corrective policy regime to allow for some sanity in offshore drilling, it may be wise for them to read the interim report of the Presidential Commission looking into the havoc caused by BP oil spill in the Gulf of Mexico.

As might be expected, initial reactions from Republican politicians holding brief for the oil industry, this new plan from the administration is irresponsible and short-sighted. Virginia Governor Bob McDonnell is going to seek legislative fixes and from my state, Republican Representative Doc Hasting does not want the BP oil pollution experience to disrupt the long-term need for existing energy plan that includes the responsible development of our nation’s oil and gas resources. Can you see the talking point among Republicans: we will fix it and continue at all cost, even if those costs destroy our environment, pollute our waters, poison our seafood source and damage our lands. To this group of politicians, anything for the oil and gas! These two politicians have not experienced the pain and sorrow of the largest oil spill in the history of North America and could hardly careless about the challenges that those who have experienced the nightmare went through. In short, Republicans are sending a clear message that they are going to fight a prudent and wise public policy that makes correction for excesses in an industry that makes billions of dollars at the expense of America’s environment.

The oil industry has responded in different ways to the new plan and has provided different reactions to the new plan. While some in the industry are concerned about the role their members has participated in contributing to the change in course by the Obama’s administration over offshore drilling, others believe that the new plan is a worthy stop gap, until the industry is able to put its act together and prevent future disaster as the one in the Gulf of Mexico. Can restriction on drilling in the eastern gulf, prevent the oil industry from expanding operations in already issues releases – including on land and in many areas in North America where alternative source to oil as energy source has already been identified? The answer to that question is, No!

Production data from oil exploration hinterland shows that there are huge opportunities to expand production levels to accommodate for the seven year restriction in the eastern gulf oil exploration and prospecting. The opportunities for oil and gas companies to make money in alternative sources of energy is huge, even if they do not make as much as they usually do. Unfortunately, this is underrating the oil and gas industry. This is a growth industry that is expanding in mammoth quadruple order. have you heard of their quarterly profits, lately? Even, BP that suffered some setbacks due to the accident in the Gulf of Mexico, still made billions of dollars in profits. If the industry wants to expand production, there are alternative sources of energy to the black gold that the oil companies can put their money; and, these sources are right here in America.

So, when you hear a politician say that the new oil and gas exploration plan is going to cost us money, jobs and independence from foreign energy sources, tell him or her to tell that to the marines!

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