The costs of chasing the independent producers out of the Gulf

Joseph Bryant:

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... what the IHS study found was striking: In 2009, independents participating in the exploration and development of the Gulf of Mexico accounted for more than 200,000 jobs, $38 billion in economic benefits and more than $10 billion in federal and state revenue and royalty payments.

Furthermore, through the next decade, the relative contribution of the independents to overall industry employment is projected to increase from 53 percent in 2009 to 59 percent in 2020.

The Gulf of Mexico is a strategically important source of domestic energy, security and economic activity. It accounts for almost 30 percent of all U.S. oil production and 10 percent of U.S. natural gas. Last year, for the first time since 1991, the U.S. recorded an increase in domestic oil production. This is attributable to developments in the deep-water Gulf of Mexico.

People who know the offshore deep-water oil and gas industry know that its vitality is linked directly to the independents' ability to participate in operations in the Gulf. Independents like Cobalt hold majority interests in 52 percent of all deep-water Gulf of Mexico leases. In fact, the independents collaborate extensively with the majors in exploration and production. The benefits of this integration would be lost if independents were excluded, resulting in decreased activity and a reduction in future production of domestic energy.

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The administration and the Congress are over reacting to the Gulf blowout. They need to take a breath and do some homework before they jump to conclusions that could shut out a significant resource and the people who produce it. We need the risk takers. Since these guys are risking their own fortunes every time they drill they already have adequate incentive to be careful.

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