Do Hurricanes or Obama Policies Cause Lower Production in the Gulf?

The Institute for Energy Research compared the impacts of hurricane activity and the Obama Administration’s oil policies on production in the offshore Gulf of Mexico to see which has the larger and more lasting impact. Although the shorter-term impacts of both are similar in size, Obama’s policies seem to have a more lasting effect. The Energy Information Administration (EIA) forecasts that offshore oil production in the Gulf of Mexico will not reach its peak 2010 production level at least through 2014, the farthest year out in the agency’s Short-Term Energy Outlook.

The graph below shows annual historical crude oil production in the Gulf of Mexico from 1994 through 2012, and projected crude oil production for the Gulf of Mexico in 2013 and 2014 based on EIA’s July 2013 Short-Term Energy Outlook. Oil production in the Gulf of Mexico took a downturn in 2005 due to hurricanes Katrina and Rita and then again in 2008 due to hurricanes Gustav and Ike. Another downturn occurred in 2011 because of the moratorium on drilling in the Gulf of Mexico that was instituted by the Obama Administration after the oil spill occurred there in April 2010 due to the Macondo accident, the Obama Administration’s subsequent moratorium on offshore drilling, and the Administration’s de facto moratorium (the “permitorium”) that continued once the original moratorium on offshore drilling was lifted. Oil production in the Gulf of Mexico has still not returned to pre-moratorium levels and the EIA is projecting that it will not return to pre-moratorium levels through 2014.

READ MORE:  http://www.instituteforenergyresearch.org/2013/07/12/are-hurricanes-or-obamas-oil-policies-causing-lower-production-in-the-gulf-of-mexico/