_

After a steep drop in oil production in the wake of the Deepwater Horizon disaster, the U.S. Gulf of Mexico is set for an energy boom.

Gulf oil flows will increase by nearly 28% by 2022 to 1.8 million barrels per day, according to consulting firm Bentek Energy. Output will be boosted by huge projects like Exxon Mobil Corp.’s XOM +1.05% Hadrian field 250 miles off the coast of Louisiana and Chevron Corp.’s CVX +1.07% nearby Jack and St. Malo projects.

The Gulf accounted for nearly a third of U.S. oil production as recently as 2009. But onshore oil production has surged as oil companies use new extraction techniques to tap dense shale formations in places like the Eagle Ford shale Texas and the Bakken shale North Dakota. The Gulf now accounts for just 20% of U.S. output, and that number is predicted to decline to 15% by 2022 despite the expected surge in Gulf production.

Oil found offshore generally sells for more than onshore crude. That is partly because Gulf oil is easier to transport to Europe and trades at the higher prices crude fetches there. The result is that oil companies are eager to gear up offshore production, despite the growing challenges of drilling in new areas and deeper water.

The resurgence in the Gulf belies warnings from the energy industry that tougher regulations would curtail exploration there following the 2010 explosion at BP BP.LN -0.34% PLC’s Macondo well. The blast killed 11 people on the Deepwater Horizon drilling rig and led to the worst offshore oil spill in U.S. history.

Today the industry says it is learning to live with stricter safety oversight and slower permit reviews. The tougher regulatory environment is palatable because of high global oil prices, which have remained above $90 a barrel for nearly two years.

“Bottom-line, the Gulf of Mexico is in considerably better shape than even the most ardent optimists envisioned following Macondo,” said Bill Herbert, a managing director with investment bank Simmons & Co.

Some major energy companies are increasing their commitments to the Gulf, including Royal Dutch Shell, RDSA -1.02% which earlier this year spent more than $403 million to lease several new areas there. “The importance of the Gulf continues to grow for Shell, with significant discoveries and major projects in the pipeline,” says Marvin Odom, president of Shell Oil Co.

BP, which is the area’s largest oil producer and is expected to remain so, agreed recently to sell $5.5 billion of assets to Plains Exploration & Production Co., PXP +1.88% while Brazilian oil giant Petroleo Brasileiro SA PBR +0.90% said this week that it may sell some of its Gulf projects.

But those moves reflect company-specific challenges rather than concerns over the Gulf, analysts say. Petrobras needs to focus on many projects back in Brazil.

BP, which will invest about $4 billion a year in the Gulf over the next decade, needs money to pay for the aftermath of the 2010 spill. It has six deep-water rigs at work in the Gulf and plans to add two more by year-end, a record for the company.

The Gulf benefits from the extensive infrastructure in place there, which makes development easier. It is the most developed offshore oil-and-gas region in the world, according to Tyler Priest, a University of Iowa history professor who focuses on the energy industry.

Beginning with just a handful of wells off the beaches and marshes of Texas and Louisiana in the 1950s, the Gulf now has more than 4,000 platforms pumping oil and gas from 35,000 wells through nearly 30,000 miles of pipelines.

Including natural gas as well as oil, production in federal waters reached a peak of almost 1.8 million barrels per day in 2009. But the 2010 Deepwater Horizon spill led to a six-month drilling moratorium as the government drafted new safety rules.

Oil and gas flows in 2010 were off just slightly from the 2009 peak, but dropped 18% in 2011 to 1.4 million barrels of oil equivalent. They are expected to bottom out this year at 1.3 million barrels.

Worst-case predictions for environmental damage didn’t materialize following the spill, though a number of continuing studies indicate there may be long-term impacts on the Gulf’s ecosystem. On Thursday, the National Oceanic and Atmospheric Administration reported that in 2011 the Gulf’s commercial seafood industry saw its highest volume of catches since 1999.

New regulations imposed after the oil spill spelled out specific standards for well design and construction, added new requirements for safety equipment and inspections, while requiring that drillers have quick access to a containment system similar to the one that ultimately stopped the Deepwater Horizon spill..

The new regulations also have slowed the pace at which energy companies receive federal permits. Exploration and development plans now take about 150 days compared with 54 days in the past, according to investment bank Tudor Pickering & Holt. Permits to drill specific wells now take about twice as long as before the disaster.

But the number of permits has risen sharply so far this year, to 105 as of August, versus 79 in all of 2011. “Today we see cooler heads and more pragmatic leadership with the regulators in Washington, and things are now working more smoothly in the Gulf, ” says James Noe, general counsel for drilling firm Hercules Offshore Inc. HERO -1.91%

The pipeline for future projects in the Gulf continues to grow. In June, 56 companies bid $1.7 billion for the rights to explore more than 2.4 million acres of the Gulf controlled by the federal government.

Success in these new areaswon’t come easily, according to Tudor Pickering. Much of the drilling will tap into a region called the Lower Tertiary, where completed projects so far have produced about one-third the daily rate of earlier deep-water fields and taken about 30% longer to drill.

Many energy experts predicted only the biggest companies could meet new regulatory and financial requirements to drill in the Gulf, but that hasn’t proved to be the case.

Houston Energy LP, a small independent firm, won five deep-water blocks in the most recent federal lease sale. “We went to the North Sea and other offshore areas to look into exploring, but when we came back we chose to dive right into the Gulf of Mexico,” said Ron Neal, Houston Energy’s CEO.

original article

_

Three Republican U.S. senators are taking credit for an investigation into a “potential cover-up” of documents that led to a Gulf of Mexico drilling moratorium more than two years ago.

President Barack Obama, through his Department of the Interior, issued the drilling ban following the 2010 explosion of BP’s Deepwater Horizon well. It spanned six months and was suspended when the department’s new safety guidelines were implemented.

U.S. Sens. David Vitter of Metairie, who serves as Louisiana’s junior senator, Jeff Sessions of Alabama and John Cornyn of Texas are questioning the accuracy of an executive oil spill report that led to the moratorium’s creation. Moreover, they contend certain government officials may have altered portions of the report to provide political cover for the White House.

Vitter originally asked the Interior Department’s Office of the Inspector General to investigate mistakes in the report back in 2010 and said he was told “any mistakes were inadvertent.” He added that other evidence has since surfaced suggesting collusion between the inspector general’s staff and officials at the Interior Department during that investigation.

Then two months ago, all three senators asked for a separate follow-up investigation from Kevin L. Perkins, chairman of the federal Integrity Committee, which is charged with looking into claims made against inspectors general. Vitter said the committee met Thursday to discuss the request.

“We’re confident that this independent Integrity Committee will conduct a thorough and accurate investigation and get to the bottom of this potential cover-up,” Vitter said. “It’s pretty outrageous to know that politics seems to be likely influencing the Office of the Inspector General in lieu of the science.”

Vitter said he has “alarming evidence from a whistleblower” that shows the original investigation he requested on the oil spill report may not have been independent and “could have even involved the acting inspector general tampering with the facts.”

USA Today can be credited with breaking the story two months ago when it reported Acting Inspector General Mary Kendall took part in meetings where a peer review of scientists supporting the moratorium was discussed. Kendall is accused of “editing draft versions” of the oil spill report when it became evident that the peer review may not have been correct, Vitter said.

The request signed by the three senators and addressed to the Integrity Committee stated that Kendall “proposed deleting entire pages of key findings and analysis drafted by senior OIG staff, including sections detailing the role of the White House in revising the 30-Day Report in the early morning hours (between 2 and 3 a.m.) of May 27, 2010, to give the untrue impression that the administration’s political decision to impose a six-month drilling moratorium was reviewed by independent peer review experts.”

The U.S. House Natural Resources Committee is doing its own investigation as well. Documents it has obtained show that “Ms. Kendall revised the draft OIG investigation report to strike a sentence stating the role of President Obama in requesting the 30-Day Report,” Vitter wrote in his request to the Integrity Committee.

Over the past few months, Interior officials have testified and said in interviews the department simply made corrections to the report when they were made aware of various errors. So far the department and the White House have reportedly turned over more than 2,000 documents, including emails, related to the investigations.

“Immediately after being made aware of the error in the executive summary of the report in June, 2010, the department moved quickly to clarify the scope of the peer review and to apologize to the peer reviewers,” Interior spokesman Adam Fetcher said in a written statement Friday.

He said the “bottom line is that we cannot forget the lessons of the Deepwater Horizon oil spill.”

With the full force of the federal government responding to the largest oil spill in U.S. history, he added that Interior Secretary Ken Salazar recognized that the “nation could neither afford the risk nor respond to a second catastrophic spill” in the Gulf at the same time.

“Industry is now back to work and complying with new and more rigorous safety practices, and there are more rigs at work in the deep water of the Gulf of Mexico than at any time since May 2010,” Fetcher said.

As for the committee investigations, he said the department would continue to cooperate with their “legitimate oversight interests,” but added citizens would be better served by Congress if it passed into law the department’s new safety regulations that have come about since 2010.

“This investigation, made up of an ever-changing and unsettled set of requests from the committee, continues to spend taxpayer resources to re-litigate an issue that was resolved two years ago,” he said.

original article

_

In the wake of BP‘s (NYSE:BP) deadly Deepwater Horizon rig explosion and oil spill in the Gulf of Mexico, the Obama administration halted drilling activity and issuance of new permits. For roughly six months the Gulf lay fallow, and more than 33 deepwater wells were essentially shut off.

However, the Gulf is now experiencing a renaissance. The ban has been lifted, new permit issuance is rising and drilling activity is thriving again, thanks to high oil prices and growing global demand. Ultimately, that makes dealing with the various new government regulations and additional costs well worth it for many of the industry’s largest players.

It also creates a lucrative business opportunity for the companies that make advanced safety equipment — and an investing opportunity for investors.

The Goal: Preventing Blowouts

Before getting to those beneficiaries, let’s review the emerging regulatory landscape. In an effort to prevent another BP-style disaster, the newly reconfigured Bureau of Ocean Energy Management & Regulatory Enforcement (BOEMRE) and the U.S. Interior Department continue to add costly safety measures into new drilling permits. Stricter provisions for well blowouts and spill containments are now the norm for any exploration and production firms wanting to drill in the Gulf.

And it’s not just the U.S. that’s taking safety to heart. Regulators everywhere, from Europe’s North Sea to China’s coast, are considering more such provisions.

Key to those provisions are essential pieces of safety equipment: blowout preventers (BOP), which sit nearly five-stories tall and cost as much as $45 million each. A failed unit aboard BP’s Horizon rig was the main culprit for the disastrous fire and spill.

These devices are critical both onshore and off. At its core, a blowout preventer is a large, specialized valve used to monitor, control and seal oil and gas wells. BOPs are designed to regulate the pressures and uncontrolled fluid flows that occur during drilling. If the device fails to control the fluctuating pressure, a large blade, or ram, is designed to “cut” the pipe to choke the flow and prevent explosive gases from reaching the rig and crews on the surface. BOPs come in a variety of different styles, but they roughly function in the same way.

As Deepwater Horizon reminded everyone, blowouts can be particular hazardous events, despite the fact that “gushers” were an icon of oil exploration during the late 19th and early 20th centuries.

Following guidelines from a National Academy of Engineering report, the Interior Department has called for major changes to BOP design and testing to ensure they can work under a wide range of scenarios. BOPs will be beefed up with a second set of rams, which will increase the odds of it successfully slicing through the drill pipe to seal off an uncontrollable well. In addition, workers will need to be better trained to operate these devices in emergencies.

Already, many producers in the Gulf — including BP — have begun adopting two-ram systems in anticipation of the new regulations. Royal Dutch Shell (NYSE:RDS-A, RDS-B) has pledged to use two rams on its BOPs in exploratory drilling in the Arctic Chukchi and Beaufort Seas this summer.

Profiting From the New Rules

While some smaller shallow-water drillers, like Hercules Offshore (NASDAQ:HERO) have complained about the pending rules — an extra set of rams could make BOPs too tall for certain types of rigs — odds are the regulations will get enacted. Even the American Petroleum Institute (API), the largest oil-industry trade group, is considering adding a requirement for double-shear rams into its own BOP standards.

With the new requirements looming, it stands to reason that the companies making these advanced BOP systems should see increased business. Several oil service companies, like Cameron (NYSE:CAM) and Tesco (NASDAQ:TESO), produce BOPs, but the king of the group and perhaps the best choice for investors is National Oilwell Varco (NYSE:NOV).

It’s the leading maker of rigs, bits and other necessary drilling equipment, with its parts and components incorporated into nearly 90% of all drilling rigs on the planet. However, the coming BOP regulations could lift demand for National Oilwell’s products and increase its $10.3 billion rig technology backlog. The company’s Shaffer pressure control equipment and Koomey BOP systems are some of the most advanced and can be used in well depths up to 30,000 feet, temperatures of 650F and pressures of 15,000 psi. Likewise, Varco’s NXT BOP is double-ram compliant and should see increased demand as the regulations get enacted.

National Oilwell’s domination in “all things rig related” has allowed it to operate with very little debt and more than $8 of cash per share on its books. At the same time, the market’s recent fall has made NOV shares even juicier. At $65.69, they can be currently had for a P/E of just 12.7, at about $22 below the 52-week high in February.

That gives investors plenty of energy-value for not much price. Overall, the long-term trend of drilling deeper coupled with stricter safety mandates should help pad National Oilwell’s and investors’ pockets.

original article

_

The federal government is offering the central Gulf of Mexico for lease to oil and gas companies this month in the first lease sale of the area since before the BP oil spill.

It could spur drilling three miles from the barrier islands and has some environmentalists concerned about ramping up deepwater oil production in an area still reeling from the spill.

The central section makes up 60 percent of the Gulf and offers more blocks by far than the western area off of Texas or the eastern area, mostly off limits until 2022, off Florida’s coast.

Because the Department of Interior skipped a year, the central Gulf will have 914 newly available blocks that had been under lease before, which may generate a lot of interest.

The total of what’s being offered is 7,276 blocks or about 39 million acres — all of the central Gulf that’s not under lease off the shores of Louisiana, Mississippi and Alabama. There is a large section directly south of Baldwin County, Ala., that will be excluded because of prior negotiations by the state.

The sale will take place June 20 at the Mercedes-Benz Superdome in New Orleans. And the Bureau of Ocean Energy Management, which is in charge, says it could trigger the production of more than 1 billion barrels of oil and more than 4 trillion cubic feet of natural gas.

“Some of the area has never been leased before,” said John Filostrat, spokesman for BOEM. “They’re getting deeper into the area because companies are getting the technology to drill it.

“The deeper you get,” he said, “the riskier.”

But he also said that more stringent regulations have been put into place since the Deepwater Horizon spill.

The farther south the blocks go, the deeper the water, even though there are some deep pockets closer in.

It gets deep fast coming off the Mississippi River, where the Deepwater Horizon well stood. That well blew 52 miles off shore in 5,000 feet of water.

The southeastern area of the central Gulf is very deep. So just because a block is up for lease, doesn’t mean oil and gas companies will bid.

BOEM estimates the region contains close to 31 billion barrels of oil and 134 trillion cubic feet of natural gas undiscovered but technically recoverable.

The blocks begin three miles off the barrier islands, some of Alabama and most of Louisiana and go to about 230 miles offshore.

Oil production in water deeper than 1,000 feet now accounts for 79 percent of the Gulf production. In 2009, it was 72 percent. Deep water wells also account for 47 percent of the natural gas production, according to the DOI’s Bureau of Safety and Environmental Enforcement.

But bringing wells close to shore and drilling deeper are both a concern, said Raleigh Hoke of the Gulf Restoration Network.

“Some of these leases are three miles from the islands,” he said. “But at the same time they have to stay 100 miles from the Florida coast. That’s because of historic opposition.”

He said that years of opposition has given Florida and Alabama coastal tourism more consideration. His organization is part of a coalition opposing oil or gas wells within 12 miles of Mississippi’s barrier islands. It is also fighting the sale of leases in state water, which is even closer to the islands.

However, safety in deep water is also a concern.

“The industry has developed the ability to drill deeper,” Hoke said. “But has technology caught up with that to insure it’s done safely?”

The lease sale will primarily generate money for the U.S. general fund, but there is a revenue sharing system that has a complicated formula for distribution to the states.

What counties receive varies widely.

For example, Jackson County received more than $590,000 from the 2008 lease sale in the central Gulf in a year when the sale brought in $3.7 billion in high bids. But the same county received only $20,000 from the 2010 sale.

Jackson County Supervisor Mike Mangum said he’s looking forward to 2017, when the rules for distribution change and the states could receive up to $500 million.

“We don’t exactly know what that will be,” he said. “But the amount available to be distributed to the states will go up in Phase II, starting in 2017.”

Some of it depends on which blocks are leased and how close they are to Jackson County.

“But this is a big lease sale,” he said. “If there is some interest, we will certainly see more money than in 2010.”

He pointed out that the money must be spent on coastal conservation, restoration and hurricane protection. With this money added to what used to be the Coastal Impact Assistance Program, BP fine money from the spill and BP restoration money, he said, “the environment in South Mississippi will be the winner.”

original article

_

MWCC to Deploy Capping Stack for Exercise in the Gulf.
  
As part of the Obama administration’s ongoing efforts to strengthen the oil and gas industry’s ability to respond in the event of a deepwater blowout and ensure that offshore oil and gas production can continue to expand safely and responsibly, Secretary of the Interior Ken Salazar today charged the Marine Well Containment Company (MWCC) with conducting a live drill this summer to deploy critical pieces of state-of-the-art well control equipment in the Gulf of Mexico.

The exercise would demonstrate the ability of MWCC to mobilize a capping stack – a device similar to the one that stopped the flow of oil from the Deepwater Horizon’s well – in a timely fashion from its on-shore base to the deep water seabed of the Gulf.

This first-of-its-kind exercise will be overseen by Interior’s Bureau of Safety and Environmental Enforcement (BSEE), which tests capping stacks on the surface as part of its overall responsibility to enforce the tougher offshore safety requirements implemented in response to the Deepwater Horizon explosion and oil spill.

“In the wake of the Deepwater Horizon explosion and oil spill, we undertook the most aggressive and comprehensive reforms to offshore oil and gas oversight in U.S. history, including requiring the industry to have immediate access to equipment and technologies that could stop another blowout,” said Salazar. “Our safety reforms are designed to reduce the chances that a capping stack would ever be needed again, but one thing Deepwater Horizon taught us is that you must always be ready to respond to the worst case scenario. This exercise is an opportunity to deploy systems, test readiness, and train under real-time conditions.”

“BSEE has made great strides in developing an effective and strong regulatory framework to support the offshore oil and gas program,” BSEE Director James Watson said. “We have tested MWCC and capping stacks repeatedly, but putting them through their paces in the deep waters of the Gulf will give us added confidence that they will be ready to go if needed.”

MWCC is one of two consortia that provide contract access to well containment equipment to oil and gas operators in the Gulf of Mexico. This equipment is required by BSEE for drilling with subsea blowout preventers in deepwater, among other situations. The other consortium, the Helix Well Containment Group, will complete a similar deployment exercise in the future.

The demonstration will involve the field deployment and testing of a capping stack as part of a larger scenario that will also test an operator’s ability to obtain and schedule the deployment of the supporting systems necessary for successful containment – including debris removal equipment and oil collection devices, such as top hats. The capping stack will be lowered to the seabed by wire, a technique that offers the potential to be significantly faster than the deployment via pipe that occurred during the Deepwater Horizon response.

As part of the exercise, BSEE will also analyze the results from tests conducted on the sea floor. In October 2010, Secretary Salazar required that prior to receiving approval of a deepwater drilling permit, an operator must demonstrate that it has enforceable obligations that ensure that containment resources are available promptly in the event of a deepwater blowout.

original article

_

A new federal regulatory proposal for the blowout preventer technology that failed during the 2010 BP oil leak is expected by September, U.S. Interior Department officials said Tuesday.

U.S. Interior Deputy Secretary David Hayes said the federal government already has a “good idea” what the regulations would focus on as he spoke during a “next generation blowout preventer” forum.

“BOPs need to be able to cut off whatever is in their way and completely seal off the well,” Hayes said.

The rules also must look at better maintenance, employee training and sensors “to tell us what is going on at the bottom of the sea,” he said.

In 2010, the BP blowout preventer built by Cameron International Corp. was supposed to cut off the oil flow from the wellhead when problems arose, but the device failed. The Deepwater Horizon explosion killed 11 men and resulted in a three-month discharge of 4.9 million barrels of oil into the Gulf of Mexico off the coast of Louisiana.

U.S. Interior Department Secretary Ken Salazar said much progress has been made since then through federal oversight and corporations improving their own standards. But he added that “we have a long ways still to go.”

“What we do with this rule will basically set the standard for the rest of the world,” Salazar said, arguing that the technological changes for offshore drilling in the U.S. also will end up extending to drilling near Africa and other parts of the world.

Since the BP disaster, the United Kingdom-based corporation has added a second set of sheer rams to its blowout preventers to cut off the oil flow if the first set fails. Salazar questioned whether all deepwater drilling operations need that extra security.

“We need to make sure the lessons of the Deepwater Horizon and Macondo are not forgotten,” he said.

But Salazar also expressed optimism in deepwater drilling and touted the efforts of President Barack Obama that are much derided by Republicans and other opponents. “The Gulf of Mexico is back and producing oil and gas and exploring for oil and gas in a very robust way,” he said.

Despite a six-month “pause” with the controversial drilling moratorium after the tragedy, Salazar said, deepwater drilling rig activity is greater now than in 2009 and another big Gulf lease sale is in June with 38 million acres available.

As for moving forward with new rules, Jim Watson, director of the department’s Bureau of Safety and Environmental Enforcement, said safety is needed at all levels “from the bottom of that well to the top of the derrick.”

“We can’t just have safety when the inspector is there,” Watson said. “It can’t just be snapshot safety.”

In that vein, he said, the department also is moving forward with new “safety management systems” rules.

Almost 20 years has passed since standards were updated regulating, essentially, what is going on at the bottom of the sea during oil production, Watson said, noting that technology has advanced a lot during that period.

original article

_

Measures to ensure fines from the Deepwater Horizon disaster go toward coastal protection and to require the state automatically pay its contract with New Orleans for costs associated with Harrah’s Casino moved forward Monday.

House Bill 812, by Rep. Simone Champagne, R-Erath, would allow voters to decide whether to dedicate fines associated with the 2010 oil spill to the state’s Coast Protection and Restoration Fund. The House gave unanimous approval to that constitutional amendment, which will now be sent to the Senate Finance Committee.

The Senate committee gave unanimous approval Monday to Champagne’s companion bill to codify the effects of the amendment.

Officials said Monday that under the Clean Water Act, BP could be fined at least $1,000 for each of the millions of barrels of oil spilled into the gulf. That fine would increase to $4,000 if it is proved the accident was the result of gross negligence. A portion of those fines would go to Louisiana under a federal law that is now being discussed in Congress.

Environmental Protection Agency policies would require the money be spent in areas that have a geographic or ecological connection to the spill, said Garrett Graves, who runs the state Coastal Protection and Restoration Authority.

The House also gave approval Monday to House Bills 183 and 203 to clear the way for New Orleans to directly get compensation for services it provides to Harrah’s rather than waiting for legislative approval.

Under the arrangement created when Harrah’s became the state’s first land-based casino, the city enters into a contract with the state for additional services, such as policing, it provides to support the gambling establishment. The city is paid for these services quarterly.

House Speaker Pro Tem Walt Leger III, D-New Orleans, filed the two bills, which were passed unanimously.

Another measure that would require the House and Senate to prominently display the gap between the amount of money currently in the state’s retirement systems and the amount required to pay out benefits to employees also passed the House on a 72-17 vote.

House Concurrent Resolution 59, by Rep. Thomas Carmody Jr., R-Shreveport, would require that number, currently more than $18 billion, to be displayed in both chambers. The state’s legislative website also would be required to include the figure as well as a link explaining what it means and any bills being considered to address it.

Carmody said the measure would ensure people know about the gap, which he described as the largest debt owed by the state. House Retirement Committee Chairman Rep. Kevin Pearson, R-Slidell, who has handled the bills dealing with the retirement systems this year, questioned the need for a reminder and likened it to putting up a display to other less-than-exemplary facts about the state, such as the rankings of its schools or the number of elected officials who have served jail time.

original article

_

Visitors to this oil town might be forgiven for wondering whether the BP oil spill and subsequent drilling moratorium ever happened. “Now hiring” signs are plastered on billboards around town, and hotels such as the Crowne Plaza are chock full of seminars training students to work on offshore rigs. Many offshore companies can’t find enough workers for the jobs they’re listing. This parish has the lowest unemployment rate in Louisiana, 4.8%.

Such is the opportunity on the offshore rigs that Sheila Clark, whose husband, Donald, died in the Deepwater Horizon explosion two years ago, said her 22-year-old son recently asked her how she’d feel if he went to work on a rig.

“I can’t stop him,” said Clark, who moved to Baton Rouge after her husband’s death. “He wants to make a good living for himself.”

The Obama administration takes credit for this sea change in an area that was all but closed during a six-month moratorium on offshore drilling in 2010.

“There are politicians who say that if we just drilled more, then gas prices would come down right away,” President Obama said last month in the Rose Garden. “What they don’t say is that we have been drilling more.”

But companies here complain about a sluggish permit process, and say the hiring signs are up because so many workers left town during the moratorium that there’s now a worker shortage. When Mitt Romney came to Louisiana this spring, he picked up on their complaints.

Obama “made it harder to get energy in America and so he shouldn’t be taking credit for that,” Romney said, standing on a natural gas rig.

As gas prices fluctuate and the economy remains stagnant, energy is becoming one of the more contentious issues in the 2012 campaign. House Democrats introduced a bill that would pay for lower-interest student loans by ending tax subsidies to oil companies. Republicans accuse Democrats of hampering energy production by blocking the Keystone pipeline.

Romney spoke to supporters in front of an oil derrick in the swing state of Colorado last week, criticizing Obama for “outdated” energy policies.

“I’m going to open up [the Arctic National Wildlife Refuge]; I’m going to get drilling in the gulf going again; I’m going to make sure we drill for oil in the outer continental shelf,” he said.

Nowhere is the energy issue more sensitive than in the Gulf of Mexico, where environmentalists butt heads with economic development officials after one of the biggest environmental disasters in U.S. history.

The strange thing is, experts say, that despite the politics, Romney and Obama have essentially the same position on offshore drilling.

“They’re not that far apart,” said Cindy Rugeley, an assistant professor of politics at Texas Tech University. “Both of them agree that there should be some degree of drilling offshore.”

Promoting drilling is a little tougher for Obama, who counts environmentalists among his supporters and must tread carefully in Florida, which saw its tourism industry decimated after the oil spill. But administration officials have been vocal in insisting that there’s more offshore drilling going on than there has been in years, part of an “all-of-the-above” energy policy that promotes getting energy from both below-the-ground resources and renewable fuels.

“Since the president took office, domestic oil and gas production has increased each year, with oil production higher than any time in eight years and natural gas production at its highest level ever,” said Clark Stevens, a White House spokesman. The administration has approved more than 500 permits for oil wells, and will hold a 38 million acre lease sale in June, he said.

By the end of April, there were 41 rigs operating offshore in Louisiana, compared to 47 in the week before the spill, according to a count by Baker Hughes, a large oil field company that keeps an official tally. Total federal oil production — offshore and on — has increased by 13% during the first three years of the Obama administration, according to administration data.

In October, the Interior Department completed reorganization of the Minerals Management Service, which had been responsible for regulating drilling, into three separate agencies. Permitting has picked up since then, with 32 drilling permits approved in the Gulf of Mexico in February, the most in one month since May 2007.

The administration points out that in one lease sale in December, it made available 21 million acres of land in the gulf, but the industry leased just 1 million acres.

Critics say the Obama administration has created regulatory uncertainty that’s driven out companies and workers.

“We are really not maximizing the opportunities in the Gulf of Mexico,” said Lori LeBlanc, executive director of the Gulf Economic Survival Team, a Louisiana nonprofit that advocates for more gulf energy production. “Without a predictable process, companies are going to look at other parts of the world.”

Operators submit plans to the government before they can apply for permits, she said, a process that used to take 50 days but now takes, on average, 212.

Obama’s opponents cite statistics that contradict administration figures. LeBlanc’s rig count shows 18 active rigs in the gulf now, down from 27 before the BP spill — any tallies that show otherwise are counting rigs that are not actively operating, she said. She is counting only deep-water rigs; the Baker Hughes number counts all offshore.

“There have been intentional efforts to slow down new production by slowing the permit approval process,” said Garret Graves, director of coastal activities for the state of Louisiana in the administration of Republican Gov. Bobby Jindal. Graves said production was down about 100 million to 200 million barrels a year.

Those in Lafayette are divided over Obama’s record.

“We find there’s a lot of rhetoric coming from the politicians – they say they’re going to lift the moratorium, and then they don’t issue permits,” said Keith Mosing, chief executive of Frank’s International, which provides tools and workers for offshore rigs. He says 80% of the equipment he makes in Lafayette is going overseas.

But Volker Rathmann, president of Collarini Energy Staffing, which finds workers for offshore rigs, said the demand for such workers had tripled in the last year and a half.

“If you take the rhetoric and politics out of it, I don’t think the Obama administration is very far away from what the Republicans are saying,” he said. “If you can spell drilling, you can get a job.”

original article