In the meantime, Interior has issued new regulations and a new permitting process for deep-water drilling in the Gulf; so far, it doesn’t appear that any new drilling has been approved under these regulations.
That hasn’t been the only impact on oil production. More traditional shallow water drilling has also been brought to a near-complete stop, not through an explicit change in policy, but simply by slowing the permitting process. The effect is that there has been a nearly complete moratorium on drilling — shallow water or deep — in the Gulf. Similar problems are slowing or stopping oil exploration in Alaska.
Of course, the effect on drilling companies has been dramatic. Many companies have simply moved their rigs away from the United States, looking for more congenial locations. The financial impact has been immense. This week, Seahawk Drilling, a smaller drilling company based in Houston, quoted their president and CEO, Randall Stilley:
Due to dramatic delays in the issuing of shallow water drilling permits in the U.S. Gulf of Mexico resulting from the Macondo well blowout, as well as the continued low prices for natural gas and the economic slowdown, Seahawk’s liquidity and operations have been adversely affected. As previously announced, we have engaged Simmons & Company International to explore strategic alternatives for the company in order to examine all possible options to best realize the potential of our assets and maximize value to our shareholders.
Translated from the special lingo of financial statements, that’s “the slow-down in drilling permits has so impaired our business that we’re looking to sell assets in order to survive.”
The Obama administration wants people to believe that they are not anti-business, but their environmental policies alone are wiping out small businesses, and promise to stall large projects waiting for regulatory approval, probably for years.
Ian Fleming, through his character Auric Goldfinger, proposed this law: “Once is happenstance. Twice is coincidence. Three times is enemy action.”