(CNSNews.com) – Although the Obama administration officially lifted the six-month ban on offshore drilling in the Gulf of Mexico in October 2010, a new report finds that the “de facto” moratorium still in place is harming American consumers and the budgets of local and state governments.
Since October, the Department of the Interior has approved only a handful of deepwater drilling permits in the wake of last year’s BP well explosion and subsequent oil spill in the Gulf of Mexico.
The report, issued by the National Center for Policy Analysis (NCPA), said increasing offshore drilling production could add nearly $5 million in revenue a day to the federal treasury and “significantly” reduce gas prices.
“While President Obama says he supports deficit reduction, his administration’s policies are only contributing to the country’s deficit problem,” Rob Bluey, report author and adjunct scholar at NCPA, said in a statement about the report issued on Wednesday. “Federal revenue from offshore drilling is down sharply as a result of the Obama administration’s anti-drilling agenda.”
Bluey said the royalty fees paid to the federal government on oil produced are significant.
“Oil companies pay an 18.75 percent royalty to the federal government on the oil produced,” Bluey said. “With oil currently trading above $100 a barrel that equals $4.7 million in lost revenue each day.”
Bluey added that if the government’s own projections are accurate, that would amount to $1.7 billion this year.
“The federal government could recoup the lost revenue almost immediately if it began issuing new permits for the Gulf of Mexico,” Bluey said.
Royalties are not the only factor causing a sharp decline in federal revenue, according to the report. Rental and lease fees also generate revenue, and those numbers have for the most part declined.
In 2008, the offshore industry paid $237 million in rent, $8.3 billion in royalties and $9.4 billion for bids on new leases.
By comparison, last year those numbers were $245 million in rent, $4 billion in royalties and just $979 million in lease bids.
Federal, state and local taxes related to the offshore oil and gas operations in the Gulf totaled $13 billion in 2009, according to NCPA.
Sterling Burnett, senior fellow at NCPA, called the Obama administration’s delays in increasing oil production “obstructionist tactics.”
“This research provides yet another reason why the Obama administration should cease its obstructionist tactics and allow more domestic offshore oil and gas production,” Burnett said.