The stage is set for the next vote on offshore drilling.
The U.S. House of Representatives is ready to vote today. The question at hand is reworking the current offshore drilling system.
So what’s at risk?
For starters, my concern is how involved the government will be in shaping the future of offshore drilling. They’re already talking about eliminating the cap on damage claims, which is currently $75 million.
I don’t think the offshore industry will wait around for an answer.
I briefly talked about the latest move by four offshore players, ExxonMobil, Chevron, ConocoPhillips and Royal Dutch Shell. Those four have banded together, each putting up $250 million to set up a new rapid-response system, which would be available in the event of an oil spill. Specifically, the money will be spent on various underwater equipment that will be able to capture up to 4.2 million gallons of oil in depths up to 10,000 feet.
BP’s Macondo well is half that depth.
With the BP nightmare still under the media’s spotlight, we can probably expect the election-seeking politicians to come down hard on the offshore industry. We’re talking about tighter regulations more more restrictions on deepwater drilling endeavors.
Of course, all of this will have a devastating effect on deepwater development, making it more expensive for companies to drill into the seabed.
I can’t help but ask my readers, will the offshore industry recover, eventually?
Let me know what you think.
Until next time,
Keith Kohl
