The Bureau of Ocean Energy Management of the Department of the Interior published a 33-page Interim Final Rule covering new oil and gas drilling regulations for the Offshore. Buried within the bowels of this beast is a perfunctory assessment of the impact of the rules on the economy and on small business in particular.
The impact on domestic deepwater hydrocarbon production as a result of these regulations is expected to be negative, but the size of the impact is not expected to materially impact the world oil markets. The deepwater GOM [Gulf of Mexico] is an oil province and the domestic crude oil prices are set by the world oil markets. Currently there is sufficient spare capacity in OPEC to offset a decrease in GOM deepwater production that could occur as a result of this rule. Therefore, the increase in the price of hydrocarbon products to consumers from the increased cost to drill and operate on the OCS is expected to be minimal. However, more of the oil for domestic consumption may be purchased from overseas markets because the cost of OCS oil and gas production will rise relative to other sources of supply. This shift would contribute negatively to our balance of trade. [Page 22 of the document.]
This is rather stunning on several levels.
- They assume the United States will only be affected only as to the world price of crude oil, not availability and security of supply.
- To the Administration, it’s OK if we lose domestic production capacity, because OPEC has plenty of oil. [Are you freaking kidding me??!!]
- “Currently there is sufficient spare capacity in OPEC” only because we are in a monumental, persistent worldwide recession and demand is low. Last time we had a vibrant economy, oil was $140 per barrel. Oil has doubled from $40 to $80 per barrel during Obama’s term, and the economy has been in the toilet the entire time. This is a big, red warning flag and should be of grave concern to anyone who plans to come out of recession some day. Expensive energy could keep it from happening.
- Energy planning time frames are 10 to 30 years. “Currently” there is excess supply overhanging the market. What about six months from now? What about six years from now?
- And what about small businesses? The rule goes on to say that they’ll be OK because they will just leave the Gulf for onshore, or better yet, overseas. Just like that, huh? It shows just how foolish and unconnected are the idiots who write this stuff.
The actions of this Administration are naive, ill-considered and contrary to the self-interest of our Nation. I swear to Aqua Buddha, we’d get better governance from the Student Government of a major university.
Cross-posted at RedState.com.