Offshore Drilling: Increase Access, Reduce the Risk and Stop Hurting American Companies
August 27, 2012
Oil companies are not only eager to drill off America's coasts, they are enthusiastic about creating jobs and bringing more oil to the world market, which, in turn, will help lower gas prices, according to Hans von Spakovsky, a senior legal fellow, and Nicolas Loris, the Herbert and Joyce Morgan Fellow, at the Heritage Foundation.
However, since the BP oil disaster, the Obama administration has riddled the deepwater drilling industry with regulations that have had consequences for the U.S. economy. ATP Oil & Gas Corporation filed a claim against the United States for these overbearing regulations.
- By March 2010, ATP had obtained all necessary permits to drill in the Gulf of Mexico.
- ATP got $1.5 billion in financing from JP Morgan to pay for the ATP Titan -- a platform in 4,000 feet of water designed to allow ATP to safely drill deeper into already-penetrated oil reservoirs.
- After the BP oil incident, the Obama administration issued two moratoria on drilling activities and ordered the entire deepwater industry to cease drilling.
- In a capital intensive industry such as this, companies like ATP have sought to recoup some losses by securing contracts in the Levant Basin in the Mediterranean Sea, effectively outsourcing U.S. jobs.
Rather than regulating an industry that is important to our domestic economy, the United States should instead pursue policies that increase job creation and energy supplies.
- First, require that all of America's territorial waters open for leasing, exploration and drilling.
- Second, honor the permit deadlines. This would provide companies with the certainty to continue exploration and drilling projects.
- Additionally, liability caps should be reformed for oil spills. This would reduce frivolous lawsuits and accurately assign risk and liability for oil spills.
- Finally, the permitting process should be transitioned to state regulators. This would allow states to best balance economic growth with environmental protection.
Source: Hans von Spakovsky and Nicolas Loris, "Offshore Drilling: Increase Access, Reduce the Risk, and Stop Hurting American Companies," Heritage Foundation, August 13, 2012.
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