Oil Exploration Permit Delays Hinder Jobs Growth

July 21, 2011
Industry group says faster approval could add 230,000 U.S. jobs.

The United States could produce five times the amount of oil recently released from U.S. oil reserves if the Obama administration would hasten the permitting process for drilling in the Gulf of Mexico, according to an IHS Global Insight report published July 21.

By fully returning to permitting levels achieved prior to the BP Deepwater Horizon accident, the nation could add 230,000 direct and indirect jobs by 2012, IHS reports. This includes everything from "shipbuilders in Maine to software developers in Silicon Valley," which provide goods and services to the industry, Jim Diffley , IHS Global Insight's managing director of U.S. regional economics, told reporters during a conference call.

Action to reduce the growing backlog of plans and permit approvals could could add 150 million barrels of oil by 2012 and $44 billion to U.S. gross domestic product growth, states the report, entitled "Restarting 'the Engine' Securing American Jobs, Investment and Energy Security."

Since the Obama administration lifted the moratorium in October on deepwater drilling, regulatory approvals for drilling plans have declined by 86% from pre-moratorium levels, the study's authors say.

The number of pending exploration and development plans that have been submitted for government approval has increased nearly 90% from previous levels. At the same time, the median approval time has increased to 131 days from 36 days in past years, and the number of permits issued have declined by 60%, according to IHS.

There has been a 250% increase in the backlog of deepwater plans pending approval during the same period.

About the Author

Jonathan Katz | Former Managing Editor

Former Managing Editor Jon Katz covered leadership and strategy, tackling subjects such as lean manufacturing leadership, strategy development and deployment, corporate culture, corporate social responsibility, and growth strategies. As well, he provided news and analysis of successful companies in the chemical and energy industries, including oil and gas, renewable and alternative.

Jon worked as an intern for IndustryWeek before serving as a reporter for The Morning Journal and then as an associate editor for Penton Media’s Supply Chain Technology News.

Jon received his bachelor’s degree in Journalism from Kent State University and is a die-hard Cleveland sports fan.

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