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IADC among 18 groups urging Obama to increase permitting

Posted on 20 September 2011

By Joanne Liou, editorial coordinator

In light of President Barack Obama’s recent address to Congress and the United States on job creation and reducing unemployment, IADC joined more than a dozen other industry groups to urge the president “to improve efficiency and the rate of permitting activity in the Gulf of Mexico to a rate that is commensurate with industry’s ability to invest.”

Dr Lee Hunt, IADC President

Dr Lee Hunt, IADC President

IADC’s Dr Lee Hunt was among 18 leaders of organizations, including the National Ocean Industries Association and the Gulf Economic Survival Team, who wrote the president on behalf of the people impacted by the government’s permitting slowdown in the GOM and elsewhere in the US. In a letter addressed on the eve of President Obama’s televised speech, the leaders noted that increasing the permitting rate would simultaneously create high-paying jobs and increase revenues into federal coffers. “Getting back to work in the Gulf of Mexico creates jobs all across the United States,” the groups wrote.

On 8 September, the president addressed Congress and the nation about unemployment, the economy and what the future holds. He acknowledged a bleak status quo and proposed a plan to front the daunting task to pull America out of its economic crisis. Although there was not any mention of the oil and gas industry in his more than 30-minute speech, the American Jobs Act centers around getting more Americans back to work – a task easier said than done that the oil and gas industry can help accomplish.

“According to a recent study from some of the leading energy economists in the world – IHS Global Insight and IHS CERA – increased exploration and production activities in the Gulf would create 230,000 jobs, increase US gross domestic product by more than $44 billion,” Dr Hunt and the other industry leaders asserted in the letter. “This study adds to previous work, including the Quest Offshore report, which found that a return to historic permitting levels would add almost 200,000 jobs by 2013 for a total of nearly 430,000 jobs.”

The ongoing return to normalcy in the Gulf following the 2010 BP blowout and the subsequent moratorium on permits has been characterized by a lack of urgency and a lack of timeliness to tap into the region’s potential opportunities. Meanwhile, the Gulf is losing business to foreign markets. “The rate of approval of exploration plans is down 85 percent, and the median approval time has slipped from 36 days to 131 days,” the industry groups stated. “Rigs are actually leaving the Gulf for greater business certainty in places like Egypt, Congo and Nigeria.”

The organizations’ leaders realize the federal government’s budget concerns and assure President Obama that “unlike other proposals, permitting activity in the Gulf actually decreases the budget deficit.”

The groups state that “increasing exploration and production can be expected to increase revenues and royalty payments to state and federal treasuries by almost $12 billion while reducing US payments for oil imports by about $15 billion.”

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