De Facto Moratorium Continues

Only one deep drill permitted since official lifting

NEW ORLEANS, La. – Despite one month with no official moratorium, permitting for both shallow and deep water drilling continues to lag. Greater New Orleans Inc. released its Gulf Permit Index on Wednesday and highlighted that the Bureau of Ocean Energy Management, Regulation, and Enforcement has approved only one deep water well in the past month. That compares to a monthly average of six for the previous year, an 83 percent decline.*

At no time was there an official moratorium on shallow water drilling. However, permits for that classification too have lagged. In May BOEMRE approved no new shallow wells, and over the past three months they have approved shallow water wells at less than half of last year’s rate. While shallow water permitting did start to appear comparable to historical levels in October, thus far November has seen zero approvals.

GNO Inc. estimates that for every deep well rejected approximately 700 direct Louisiana jobs fall by the wayside, and 350 jobs in the case of shallow wells. So they are “tracking and reporting” the number of permits issued “versus historical rates.”

“The concern is that we still have a de facto moratorium… Up to 30,000 jobs will be at risk in Louisiana if permits are not issued at a reasonable rate,” says Michael Hecht, president of GNO Inc.

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Fergus Hodgson is the Capitol Bureau Reporter with the Pelican Institute for Public Policy. He can be contacted at fhodgson@pelicaninstitute.org, and one can follow him on twitter.

* While BOEMRE has issued one permit this month, that does not appear on the diagram because a total for November will not be known until the end of the month.

Data sources: Greater New Orleans Incorporated and the Bureau of Ocean Energy Management, Regulation, and Enforcement.