The Cost of New Drilling Rules

A recent editorial in Investors Business Daily (IBD) suggests its time to repeal the Obama administration’s “Don’t Ask, Don’t Drill” rules. If the Deepwater Drilling Moratorium has been lifted under the “New Drilling Rules” established by Interior Secretary Ken Salazar, you’d never know it from the declining oil and gas production in the Gulf of Mexico, the only offshore area where any drilling at all is permitted.

From March to September, oil production from the Gulf was down 22% and natural gas production off 30%. One source shows that only 18 to 20 new drilling permits have been issued since May, about the number that would have been issued in a single month before the Deepwater Horizon rig exploded in the Gulf. Most of these permits are for shallow-water gas operations, not for the deep oil wells where needed reserves are to be found.

A recent study by Science Applications International Corp. shows that failure to exploit our domestic and offshore resources will cost the U.S. economy $2.3 trillion dollar in lost opportunity over the next two decades.

The former president of Shell oil is predicting that the U.S. will face 1970s-style energy shortages and rationing by the end of the decade, accusing the federal government of turning its back on the country’s domestic oil supply.

Even if your willing to ignore the loss of jobs, what about the cost to the farm equipment industry when farmers are pouring higher and higher priced fuel in their tractors? ◆