David Holt
Guest Columnist
Anniversaries have long provided us a chance to look back on the past, look ahead to the future and stare straight into the eyes of the challenges that confront us in the present. And so it is this week with the first anniversary of the tragedy onboard the Deepwater Horizon, an incident that claimed the lives of 11 men last April and resulted in the release of 4.9 million barrels of oil over a 91-day span in the Gulf.
A full year now removed from the incident, the question that must be both asked and answered is simple: What have we learned? As president of an organization whose mission it is to bring together and spur thoughtful dialogue among those who produce energy in America and those who consume it, I can tell you we’ve all learned an awful lot.
As a nation, we now have a much better sense of the risk and reward involved in tapping reserves that were previously considered out-of-reach and a much greater appreciation for the men and women whose hard work and years of expertise have made and will continue to make this pursuit possible. As a region, we saw firsthand how decisions announced in Washington, D.C., had the ability to significantly affect the wellbeing of our local work force. And to that point, we were reminded once again that, although science and technology continue to play an important role in the broader debate over energy, it’s politics that often wields the biggest stick of all.
As the administration has reminded us, Gulf oil production was already trending downward before the incident in the Gulf took place, with the federal Energy Information Administration releasing a report days before Macondo projecting production to decline by 110,000 barrels a day in 2011. But after the tragedy, EIA updated that figure to reflect an increased loss of 240,000 barrels a day — a reevaluation influenced in part by the administration’s “permitorium” in the Gulf. Do the math: That’s a 130,000-barrel difference, and one that’s directly attributable to Washington’s lockdown on offshore development. It’s a loss of nearly 48 million barrels over the course of a year — 10 times the amount of oil that spilled in the Gulf.
Now, will 48 million barrels exert much pull on a world oil market that sees about 26 billion barrels bought, sold and consumed each year? By itself, probably not. But viewed as just one more straw — let’s call it a bale of hay — laid upon the camel’s back, a camel that’s already carrying the load of declining production in Mexico, Venezuela and other places, and it’s easy to see why the price of oil is currently comfortably above $100, with the price of gasoline marching inexorably toward $4 a gallon and the price of diesel already well past it.
Of course, independent of what we happen to be paying at the pump right now, you can bet that an extra 48 million barrels of production would lend a hand to both a national and regional economy that right now could sure use the boost. And then there’s the effect it would have on reducing our dependence on foreign oil. No, we’ll never reduce our imports to zero, but decisions being made in Washington are driving U.S. dollars overseas at time when we need them most.
It’s hardly a secret that our nation is facing some of the most difficult economic circumstances we’ve ever seen, with more than 15 million Americans out of work. But here in the Gulf region, our employment numbers, ranging from 8 to 10 percent, are expected to get worse before they get better, thanks in large part to a projected 13 percent reduction in Gulf oil output this year. And nationwide, the federal government is expected to collect $13 billion less this year in taxes, royalties and revenue owing to the situation in the Gulf. I don’t care who you are, where you are or what you do — that’s some serious money on which we’ll be losing out.
Ultimately, only the passage of time will be able to provide the clarity of insight needed to fully assess how the administration’s slowdown in the Gulf has affected our communities. That said, the early returns don’t look good. This week, as we take a moment to remember and honor those who were lost last April, we should also take a moment to consider how far we’ve come over the past year to understand what went wrong that night — and how far we’ve come to ensure it never happens again. A year off the job through no fault of its own, it’s time for the Gulf to get back to work.
David Holt is president of Consumer Energy Alliance, a Houston-based oil-industry advocacy group.
