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Despite Permit Issuance, Business Coalitions Warn: De Facto Moratorium Continues

WASHINGTON, DC – A coalition of non-profits, trade associations, and Gulf coast organizations including the National Black Chamber of Commerce (NBCC) and the Offshore Marine Service Association (OMSA) sent a letter to Congress today, asking U.S. legislators to end the ongoing de facto energy production moratorium in the Gulf.

NBCC President and CEO Harry Alford explained, “The single deepwater drilling permit granted in the Gulf is a political maneuver, and an insult to struggling businesses, meant only to alleviate pressure on Interior Department Secretary Salazar for budget discussions with Congress. The Administration ought to be focusing attention toward alleviating the pressure on business owners on the brink of collapse from the economically destructive and ongoing moratorium.”

“The government has already lost out on nearly $14 billion in revenue as a result of this misguided policy. And back in September the Gulf region had already lost nearly 20,000 jobs. When will it be enough? It is time to put the Gulf back to work,” added OMSA President and CEO Jim Adams.

The following groups also co-signed the letter:

  • Ship Builders Council of America
  • Louisiana Black Chamber of Commerce
  • Minority Business Enterprise Legal Defense and Education Fund
  • Center for Environment, Commerce, and Energy

To speak to Harry Alford, please contact Kay DeBow at (202) 466-6888. To speak with Jim Adams, please contact Hillary Brown Thrasher at (202) 352-7970.

To:
Members - House Appropriations Subcommittee on Interior, Environment and Related Agencies
Members – Senate Appropriations Subcommittee on Interior, Environment and Related Agencies


To Whom It May Concern:

The continued, unfounded and unlawful de facto moratorium in the Gulf has already cost the U.S. economy tens of thousands of jobs and billions of dollars in economic activity. This week, Interior Secretary Salazar will appear before your committee to defend his 2011 budget request. We urge you to address the following points with Secretary Salazar when considering authorization of his department’s budget:  

What is the Secretary doing to address energy security?

Interior Secretary Kenneth Salazar recently claimed that “what we do [in the Gulf] in terms of production is not going to affect the price of oil, which is set on the world market.”

Uncertainty in the supply chain – whether from disruptions in the Middle East or federal moratoriums at home – plays a major role in influencing energy prices. Increasing supply by reopening access to a region that provides one third of domestic energy production can help to boost confidence in international commodity investors, add a significant amount of resources to the market to steady prices, and stimulate our economy.

When will the Department of the Interior resume standard procedures for permitting in the Gulf?

The Secretary continues to claim the Department is resuming its standard approval process, despite that only one deepwater exploration permit has been issued in the last year.

This political maneuver to temper federal legislators as the Interior Department chief begins his agency’s budget debate is strikingly similar to the Administration’s official removal of the moratorium just before the November elections. It’s only for show. Such Washington politicking is insulting to the tens of thousands of individuals and businesses which continue to suffer in the Gulf from the all but total shutdown of offshore activity resulting from the de facto moratorium. Economic certainty is needed to gain the interest of investors, the trust of banks, and the confidence from businesses to reinvest in growth. Until this certainty is provided and the whimsical permitting process ended, this government imposed recession will continue in the region.  

How can the Secretary defend the use of taxpayer dollars when his department has wasted so many already?

Respected experts – even within the White House’s own spill commission – continue to dispel the claims of “systemic risk” the Interior cites to justify its heel dragging on permits.

White House Spill commission Chief Counsel Fred Bartlit called the Deepwater Horizon incident “an entirely preventable disaster.” U.S. drilling technologies are the gold standard for the world. The U.S. is the only nation to have taken such extreme measures as a complete drilling ban in response to the Gulf oil spill. Shutting down all drilling activities has eliminated over 20,000 jobs in the Gulf and cost the government nearly $14 billion in revenue.

Will the Secretary keep his promise to resume operations now that a deployable containment system exists?

Despite promises to resume permitting once our oil and gas industry developed technology to address future deepwater disasters – no matter how unlikely – the Secretary has ignored the world’s most advanced well containment system.

The industry led effort to develop technologies capable of stopping uncontrolled deepwater well-blowouts successfully resulted in the Marine Well Containment System. This new system can be deployed in a day to stop the flow of hydrocarbons, or direct the flow to containment vessels. Secretary Salazar has been down to the Gulf, seen this system, but failed to live up to his promise to resume drilling.  

If the Interior Department begins issuing new permits, won’t that generate the necessary revenue to review and issue even more in the future?

Now, the Interior Department has stated that if it does not receive desired funding, “we may never return to the pre-Macondo rate of permitting.”

It is no surprise that the agency is lacking funding since a portion of its budget is covered by fees, royalties, taxes, and rents from energy production. Restart the drilling and the funding will follow. Department pleas for more money are the last thing businesses in the Gulf want to hear right now from an agency so thoroughly destroying the regional economy.

Secretary Salazar has chosen to hold the entire gulf accountable for one tragic, and preventable disaster. That decision is punishing our Gulf communities, the tens of thousands of impacted workers our organizations represent, and American taxpayers who are left to foot the bill for the department’s irresponsible moratorium.

Please tell the Interior Department to stop this misguided and unnecessary moratorium before it is too late for the thousands of Gulf businesses scraping by on savings.

Respectfully,

Offshore Marine Service Association
Ship Builders Council of America
National Black Chamber of Commerce
Louisiana Black Chamber of Commerce
Minority Business Enterprise Legal Defense and Education Fund
Center for Environment, Commerce, and Energy