Realizing our Offshore Economic Opportunity

washington examinerWashington Examiner| April 10, 2017 | Randall Luthi

It’s early days for the Trump administration, but we already know a few things. Our new president favors swift action to meet his campaign promises. He’s also shown himself to be a no-holds-barred cost-cutter.

These two prongs create a dilemma. Trump pinned his reputation on job creation, but given recent events he will now lack expected healthcare savings to reinvest in stimulus in a budget-neutral manner. Fortunately, significant opportunity exists to unshackle offshore drilling and simultaneously unleash hiring activity and boost federal revenues. Some moves will require only the stroke of a pen.

At stake are over 100,000 energy jobs, many offering six-figure salaries to hard-working, high-skilled Americans with or without a college degree. These would be in the oil and gas sector, the second largest contributor to U.S. revenues. Industry growth could also dramatically increase taxes, royalties, and rents from offshore production to help fund other pressing government priorities.

That this potential is untapped today is the consequence of the previous administration abnegating its stewardship of our national energy independence. President Barack Obama’s anti-fossil fuel onslaught spanned 145 new regulations and executive actions designed to delay and derail domestic exploration.

The effects were unsurprisingly harmful. In just one year from 2008 to 2009, acres open to offshore drilling fell from 8 million to 3 million. By 2010, the Gulf of Mexico went from contributing 30 percent of U.S. energy to just 20 percent. Only a doubling of output on private and state-owned onshore lands over the decade ending in 2015 kept America in a relatively safe zone for domestic supply. A new policy direction is urgently needed.

President Trump has signaled a more rational approach to fossil fuels, committing to reverse overly stringent power plant restrictions and approving pipeline construction. Regarding offshore drilling, however, the administration has only put a toe in the deep waters of change.

The recent auction of 73 million acres in the Gulf of Mexico was welcomed but represented a modest difference from Obama-era plans. Similarly, appointing energy realists Secretary of State Rex Tillerson, EPA Administrator Scott Pruitt and Secretary of Interior Ryan Zinke was an inspired decision, but filling remaining positions has been slow.

Read full op-ed here.