The Cost of the Deepwater Drilling Moratorium

The Energy Information Administration (EIA) estimates in their latest Short Term Outlook that domestic oil production will be reduced in 2011 by 82,000 barrels per day as a result of the moratorium on deepwater drilling in the Gulf of Mexico.

These projections reflect EIA's estimates of an average reduction in crude oil output of about 82,000 bbl/d in 2011 resulting from the current 6-month moratorium on deepwater drilling.

Since we currently import about 2/3 of the oil we consume, any loss in domestic production will have to be offset with additional imports.

The EIA estimates the price for West Texas Intermediate oil will average $82 dollars per barrel in 2011. At 82,000 barrels per day, that adds up to $6,724,000 per day or $2,454,260,000 for the year that will be spent buying foreign oil because of the deepwater drilling moratorium.