Government delays put drillers out of business
Image via WikipediaLast month, Seahawk Drilling declared Chapter 11 bankruptcy and announced the sale of its assets to shallow-water driller Hercules Offshore. This devastating decision was the culmination of a long period in which we found our customers unable to secure permits for work in the Gulf of Mexico despite the fact that both our industry and our company have excellent safety records. In the 11 months after the Deepwater Horizon accident, it became clear that Seahawk's greatest rival was no longer an industry competitor but the U.S. government.There is more.
The government's drastic slowdown in the issuance of permits for shallow-water drilling operations — in which companies work in familiar geological formations, typically in less than 500 feet of water, mostly seeking to produce natural gas — has all but crippled the industry. The survivors (for now) like Hercules are staying afloat largely thanks to revenue from operations outside U.S. waters. Put another way, a once-proud industry born in the Gulf during the Truman administration can no longer survive on operations in its own back yard.
The state of the industry is hardest on those who live along the Gulf Coast and chose to dedicate their careers to developing America's energy resources. Seahawk's bankruptcy risks the jobs of more than 500 loyal employees, a number already diminished 50 percent from pre-spill levels because of attempts to save the company by cutting payrolls since last April. Our workers had stuck with us through the recent recession and downturn in commodity prices and during the freeze on all Gulf operations that the government imposed after the Macondo blowout. They held on, hoping that if and when the moratorium on shallow-water operations was rescinded, everyone would get back to work.
Yet since the moratorium on shallow-water operations was lifted, the government has acted, and continues to act, as if it were still in place.
Our government cannot claim in good conscience to hold up shallow-water permits out of an abundance of caution. The shallow-water industry relies on proven and straightforward methods honed over decades of use. Our record speaks for itself: In the past 15 years, 11,070 shallow-water wells have been drilled in the Gulf of Mexico, with a grand total of 15 barrels of oil spilled as a result of well-control incidents.
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I think this is a deliberate policy of the anti energy movement within the administration. While they have a belief in "magic" energy replacing the oil and gas business and creating millions of jobs, that is not happening and in the meantime they are killing thousands of jobs in the oil and gas business.
If this industry supports Democrats in the 2012 election it will be like selling rope to the hangman.
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