The recent debt ceiling debate has prompted increased focus on deficit reduction, with President Obama and congressional leaders proposing various cuts and tax increases aimed at moving the budget towards balance.  As has become typical, for President Obama and his friends in Congress, this means targeting the oil and gas industry with proposals to nix tax credits and deductions that are broadly available across industries well beyond oil and gas.

Ironically, however, two new studies indicate that if Obama wanted to boost revenues from the oil and gas industry, he would not need to do it via pursuing tax hikes.  Rather, according to a new study commissioned by the Gulf Economic Survival Team (GEST), an organization dedicated to helping rebuild the Gulf Coast’s flagging economy, returning to normal drilling levels in Gulf waters would boost revenues demonstrably.

Since the BP Gulf Oil spill – which happened over one year ago – the Administration has been dragging its feet in allowing American companies to drill in American waters. Approvals for shallow- and deep-water exploration permits are down by over 50 percent and 80 percent respectively.  But a resumption of drilling would pour $44 billion into the American economy, create 230,000 jobs and, what’s more, increase tax revenues from American oil and natural gas companies by $12 billion, according to GEST.

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I still find it strange when those who claim they believe in free enterprise, limited government, reducing government intervention in the marketplace and fiscal responsibility, suddenly take an “Everywhere but in my house” approach. I am referring to the more than 80 House Republicans, many of whom claim to be conservatives, who are co-sponsoring H.R. 1380, otherwise known as the Pickens Plan after Texas energy tycoon, T. Boone Pickens.

The bill revolves around several main arguments, the first of which is that America must become energy independent. I fully agree with those sentiments: America only produces 5 million barrels of oil a day, yet consumes 20 million, meaning 75% of our oil comes from other producers, some of whom have no love for this country. The second argument builds off the first: we must tap into American energy sources to gain more independence. Again, I completely agree with that argument. The third argument is that natural gas is one of the best American energy resources, therefore we must tap into it, as we have more than 100 years of natural gas that we can produce domestically. There is of course nothing wrong with any of the above arguments.

But where the Pickens Plan starts to go awry is when you look at the nuts and bolts of how the Plan would work. First, as many know, American cars and big rigs don’t currently run on natural gas, so there would have to be a massive overhaul of vehicles.

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As oil prices continue to climb, a backlog of more than 100 offshore drilling plans for the Gulf of Mexico are awaiting approval from the Obama administration, according to federal data.

The federal government has not approved a single new exploratory drilling plan in the Gulf of Mexico since lifting its deepwater drilling moratorium on Oct. 12. There are currently 103 plans awaiting review by the Bureau of Ocean Energy Management, Regulation and Enforcement.

The information reveals that the Obama administration — not the oil industry — is the culprit for the slowdown of drilling activity in the Gulf. The Gulf of Mexico accounts for more than 25 percent of domestic oil production.

“These new findings prove that BOEMRE cannot claim it isn’t receiving job-creating plans from oil exploration and production companies,” said Gregory Rusovich, chairman of the Business Council of Greater New Orleans and the River Region. “The plans are there. Until BOEMRE reviews the 103 plans awaiting approval, our economy’s stability remains in jeopardy.”

Every two weeks Greater New Orleans Inc. releases a Gulf Permit Index based on publicly available federal data. Thursday’s index revealed an 88 percent decline in deepwater permits compared to the historical average. Not a single deepwater permit was approved in January. (more…)

In this week’s edition of Coffee and Markets, featuring The New Ledger’s Francis Cianfrocca, we’re talking about how financial regulations will rob you of your free checking accounts, how the government is discouraging investment, and why Obama’s response to the BP spill is such a monumental failure. We’re brought to you as always by Andrew Breitbart’s BigGovernment.com and LibertyPundits.com.

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Related Links:

Domenech: Our Impotent President
Andrew Malcolm: Why Senators Don’t Make Good Presidents
WSJ: The End of Free Checking
Cella: Tocqueville on the BP Spill
Breitbart: Jindal Fumes as Fed Red Tape Halts Cleanup
Domenech and Cianfrocca: A Presidency on the Brink

In this week’s edition of Coffee and Markets, featuring The New Ledger’s Francis Cianfrocca, we’re talking about the BP spill, the right approach to tax policy, and why Obamacare won’t work. We’re brought to you as always by Andrew Breitbart’s BigGovernment.com and LibertyPundits.com.

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Download Podcast | iTunes | Podcast Feed

You can subscribe to the podcast by following the links above, and if you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

TNL: Dances With Bears
BigGovernment: Obamacare Isn’t Medicine for Deficit
Avik Roy: Orszag’s Weak Response
Barack Obama: Frat Boy in Chief?