Less than six months after the Deepwater Horizon oil rig exploded and sank in the Gulf of Mexico, another oil rig exploded in the Gulf. This comes after the Obama administration issued a moratorium on deep water drilling in order to reassess its rules and regulations for drilling. More stringent regulations and inspections would seem to be the answer to this problem, but what is in place now is apparently not enough to prevent such the occasional platform explosion.
The potential implications of what this event means for the oil industry is disputed. The Democratic Congress will likely seek further regulations of the oil industry, but Lee Hunt, the president of the International Association of Drilling Contractors, believes this is little more than an unfortunate incident and that it should not have an effect on the scheduled end of the moratorium on drilling. The Obama administration indicated it might lift the moratorium before the scheduled date of November 30th if it is able to indicate whether certain types of oil rigs pose less risk than others.
Still others believe this event will affect the Obama administration's plans to end the moratorium, including Bruce Bullock, director of Maguire Energy Institute at Southern Methodist University. I also happen to believe this is likely to add to the administrations regulations, otherwise public opinion might find the administration to be weak and impudent. Given the already unfavorable standing of nonrenewable, emissions producing oil in our increasingly green economy, and given the April 20th explosion of the Deepwater Horizon rig, this will have proven another blow to the already unpopular oil industry.
The information in this post is from the Wall Street Journal: http://online.wsj.com/article/SB10001424052748704206804575467600528128386.html?mod=WSJ_hps_MIDDLETopStories
ReplyDeleteI find your blog to be especially interesting because we both wrote about the moratorium on deepwater drilling. Personally, I feel as though the same investigations into safety precautions and how to prevent future incidents could be taking place while drilling is still happening. Deepwater drilling isn't just a new thing, it just so happens that one major incident is causing us to reevaluate our entire stance on it. It'll be interesting to see what the Obama administration does in order to achieve a balance between being eco-friendly, and supporting the energy industry.
ReplyDeleteI think that both of you have hit on something key in the energy industry, that being government interference and government regulation. You guys have focused on regulation and government interference in the United States. Is government regulation of the energy industry the same (or similar) in other parts of the world? If not, what does this mean for business in the energy industry? Also you have touched on this a little bit but why is government interference something that is a high priority in the energy industry?
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