Rep. Gene Green Requests Hearing on Slow Issuance of Drilling Permits

Press Release

Rep. Gene Green (TX-29) led a bipartisan letter to Chairman Fred Upton (MI-06) and Ranking Member Henry Waxman (CA-30) of the House Committee on Energy and Commerce to request a hearing on the slow issuance of permits for shallow water and deep water drilling in the Gulf of Mexico. Joining him in this letter were Reps. Steve Scalise (LA-01), Charles Gonzalez (TX-20), Bill Cassidy (LA-06), Mike Ross (AR-04), and Pete Olson (TX-22).

"The oil and gas industry is the major economic engine in our area, the State of Texas, and across the Gulf south," said Rep. Green. "Since the moratorium on drilling has been lifted for shallow and deep water drilling after the tragic Macondo spill, new permits have been issued at a slow trickle in shallow water and no new well permits have been issued in deep water for activities that were subject to the moratorium."

Before the Macondo spill in April of 2010, permits were being issued at a rate of approximately 10 per week. Since the moratorium was lifted, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) has issued a total of 32 new shallow water permits and 0 permits for deep water activities that were subject to the moratorium.

"While I agree that nothing is more important than the safety of our workers and the local environment surrounding these wells, oil and gas resources in the Gulf of Mexico account for a major portion of our nation's domestic production," Rep. Green continued. "It is possible to safely and responsibly extract oil and gas from the Gulf; our local economy and the families of these workers depend on it. We've been safely drilling offshore for years."

Hundreds of jobs have already been lost as rigs that cannot receive permits to drill leave the Gulf and thousands of more jobs are on the line as the remaining rigs anxiously await permits. Complicating the problem is the fact that many companies that have been rejected are claiming that they are not receiving guidance from BOEMRE on what is needed to approve the application.

The lawmakers wrote, "the intensifying instability in the Middle East is threatening our supply and we already import most of our oil from countries that are hostile to our interests. We need to safely and responsibly produce our domestic resources offshore in order to reduce this reliance on foreign imports and in turn, increase our economic growth."

Letter text:

Dear Chairman Upton and Ranking Member Waxman:

As Members of the House Energy and Commerce Committee, we write today to request your attention to the Bureau of Ocean Energy Management, Regulation and Enforcement's (BOEM) pace of issuance of permits for new shallow and deep water wells in the Gulf of Mexico. While the moratoria on shallow water drilling and deep water drilling were lifted on May 28, 2010 and October 12, 2010 respectively, since that time, BOEM has only issued 32 permits for new shallow water wells and has issued no permits for deepwater activities that were subject to the moratorium. This is in comparison to an average of 10 permits issued per week pre-spill. Additionally, we continue to hear from companies that the BOEM is rejecting drilling applications without providing adequate guidance as to what is needed to get the application approved.

Hundreds of jobs have already been lost. Seven floating rigs and five jackup rigs have departed the Gulf of Mexico since the Macondo spill. There are currently an additional four rigs that are considering leaving the Gulf of Mexico. With one rig equaling 500 jobs (100 workers on the rig, plus 400 workers supporting drilling operations onshore), thousands of jobs across the Gulf Coast both upstream and downstream remain at risk. This industry in the Gulf of Mexico comprises not only oil and gas companies, but also a network of suppliers and contractors that purchase goods as diverse as forgings, valves, computers, chemicals and helicopters from suppliers in all 50 states.

Meanwhile, gas prices continue to rise. Nearly one-third of our domestically produced oil and almost one-quarter of our natural gas comes from the Gulf of Mexico. In addition, as our committee recently highlighted in a Subcommittee on Energy and Power hearing entitled, "The Effects of Middle East Events on U.S. Energy Markets," the intensifying instability in the Middle East is threatening our supply, and we already import much of our oil from countries that are hostile to our interests. We need to safely and responsibly produce our domestic resources offshore in order to reduce this reliance on foreign imports and in turn, increase our economic growth. The Gulf of Mexico holds the largest and most productive oil resources in the United States, and further delays to safely producing these domestic resources will severely jeopardize our energy security and leave us more dependent on the Middle East for our energy supplies.

For these reasons, we respectfully request that our committee exercise its jurisdiction and hold a hearing on this permitting issue either in the Subcommittee on Oversight and Investigations or the Subcommittee on Energy and Power.

We look forward to working with you on this issue, and please do not hesitate to contact us or our staff with any questions on this matter. Thank you for your time and attention.

Sincerely,

Gene Green Steve Scalise
Charles Gonzalez Bill Cassidy
Mike Ross Pete Olson