Drilling in the Gulf

The Watertown (N.Y.) Daily Times: The moratorium on drilling for oil in the Gulf of Mexico was removed two months ago, but no permits have been issued to drill new wells since then.

Experts predict that oil companies will continue waiting through half of 2011 and maybe until 2012 before drilling will be resumed, the Wall Street Journal reported. The Obama administration contends that it is enforcing new regulations following last April’s oil spill. But the fact that no new permits have been issued is telling.

It is also harmful — to America’s domestic oil production, the Gulf Coast economies, residents of the region and oil companies large and small.

The large firms like Chevron Corp. and Royal Dutch Shell PLC are paying thousands of dollars per day for rigs that are idle. Smaller companies are faring worse because their options are limited.

The Gulf Coast, which lost many fishing and tourism jobs due to the spill, is doubly hard-hit as oil exploration and production are on hold.

Before the accident, offshore oil production was predicted to increase 6 percent this year from 2010; now it is estimated to decline by 13 percent. The loss is about 220,000 barrels per day, according to the Journal.

The new rules require outside engineers to approve safety equipment and test gear. More worker training is needed as well as documentation on emergency response plans. Both deep-water and shallow-water drilling are subject to new rules, and the process is slow.