The Moratorium Is Helping No one

In light of April’s Deepwater Horizon oil spill, the worst domestic oil spill in U.S. history, President Obama has stood by his decision to levy a six month moratorium on offshore drilling. The moratorium, officially declared by Secretary of the Interior Ken Salazar, is scheduled for repeal on November 30^th.

But what do we do in the meantime?

With the oil industry facing threats of increased regulation and the potential for an overhaul of its safety protocol, the worst may be yet to come. The potential impacts of the moratorium are worth examining. The government has a six month period of pure stagnation to work on crafting legislation aimed at helping to prevent a repeat spill, but will the attempted legislation serve any benefit? In terms of the oil industry, increased regulation will likely only hurt the bottom line by adding additional expenses to already decreasing revenue as a result of the spill. More strikingly, the positive environmental effect that they hope to achieve with legislation may instead push companies away to countries with easier environmental standards. Foreign Policy writer Eric Smith echoed this sentiment in an August 30^th piece which claimed that banishing the deepwater sector from domestic drilling would only worsen the problem.

If anything, it seems to me that Congress is looking to make an example out of Big Oil rather than critically examine the impact that such a sweeping legislation may have. And while a future ban on offshore drilling entirely may be a stretch, the possibility of the industry being masked in red tape is a startling one.

Sources: Think Again: Offshore Drilling, Blaze Shakes Oil Industry