Political Fallout from the BP Oil Spill

Written By Nick Hodge

Posted May 27, 2010

Michael Steele’s having a bad year.

The embattled Republican National Committee Chairman has had to battle opposition to his leadership within his own party, defend his organization’s $2,000 tab at a Hollywood strip club, and explain away his use of the term “honest injun” to Native American groups…

But when BP’s Deepwater Horizon oil rig exploded in the Gulf of Mexico last month and began what’s now looking to be the worst environmental disaster in American history, Steele’s year got a whole lot worse.

That’s because Steele is the guy who’s forever immortalized on tape leading the 2008 Republican Convention crowd of over 20,000 in a resounding chant of “Drill Baby Drill!” — an image that clearly resounds from the last presidential race.

So imagine how he’s feeling today.

Every corner of Washington can’t distance themselves from the offshore drilling industry fast enough.

The industry that was once celebrated as perhaps the savior of domestic energy production is now public enemy # 1 in almost every corner of the country.

Washington to Wasilla… Wall Street to Main Street… Everywhere you turn, politicians and pundits are falling over themselves trying to get as far away as possible from deep sea drilling.

And every time CNN or MSNBC or Fox News — yes, even Fox News — wants to show viewers how much lawmakers and talking heads were in love with offshore oil just a short time ago, they’ll cut right to the clip of Michael Steele.

“Drill Baby Drill!”

This guy can’t catch a break.

And if you think it’s only Democrats who are vilifying deep sea drilling, think again…

Just check out this quote by a prominent U.S. politician:

…this tragedy should remind us that America needs a real, comprehensive energy plan… which includes more of everything: more clean and renewable sources of energy such as nuclear power, wind, and solar energy, more alternative fuels, more conservation, and more environmentally responsible development of America’s energy resources.

Want to take a guess at which tree-hugging liberal said it?

Al Gore? Nancy Pelosi? John Kerry?

Nope. These words belong to House Minority Leader John Boehner, a Republican from Ohio.

And how about this assessment of the aftermath of the BP Spill by a leading cable news commentator:

…it’s not a matter of if they’ll be a disaster of some kind resulting of this kind of offshore drilling, it’s only a matter of when. This verifies that argument and becomes a powerful factor in the debate over what to do next. I don’t see any way around the political reality that this will set back the cause of offshore drilling in the United States…

Which member of the left-leaning media said this?

Anderson Cooper? Rachel Maddow? Keith Olberman?

Think again — this statement was uttered by none other than Fox News’ ultra-conservative Brit Hume…

It seems like we’ve finally found something to unite the parties.

On both sides of the aisle, the tide has turned shockingly fast. Gov. Schwarzenegger of California — who had supported deep sea drilling off his state’s coast — has now recently changed his mind and spoken out against it.

President Obama — who, in late March, finally relented against increasing pressure to approve more offshore oil projects and gave the OK to rigs in Alaska, the Eastern United States, and the Gulf — is now backpedaling and freezing all new permits for the time being.

And a CNN public opinion poll shows that support for offshore drilling has dropped 17% nationally between August 2008 and May 2010.

It’s clear that the oil game is about to change… possibly forever.

But what does that mean?

Well, first of all, it means that deep sea oil will take a hit — a hard hit — for quite a while.

But it won’t die; there’s simply too much oil in the ocean to let it all go, no matter how many disasters occur.

“An oil spill here or there hasn’t gotten in the way of oil extraction anywhere,” states Peter Maass, journalist and author of the 2009 book Crude World: The Violent Twilight of Oil.

In the short term, don’t expect to see many new rigs popping up from your beach chair this summer; at least in the short term, oil companies are going to be forced to move inland.

That means outlets like the oil sands in Utah are going to see increased attention and exploration. So far, 32 billion barrels have been identified. Oil companies undoubtedly will start sending in teams looking for more.

But perhaps the greatest beneficiary from the BP disaster will be oil shale deposits — particularly ones in North Dakota’s Bakken region.

The good news just keeps on coming out of this domestic oil hot spot. Brigham Exploration Co. announced yesterday positive results from two more of its wells in its core Bakken acreage.

That was enough to send its share price up 11% on Wednesday.

Every day, the barrel estimates just keep going up in the Bakken region. And with oil companies staying out of the water for the time being, odds are we’ll be seeing a lineup at the North Dakota state border as the petro barons fight for a piece of what’s bubbling up from the shale.

So then what’s the play?

Well in the coming weeks, stay tuned to Energy and Capital for a new report detailing three small American companies making big moves into the Bakken region.

This is, without a doubt, one of the rarest opportunities to exploit public sentiment for profit that I’ve ever come across.

You’ve heard it before, but it bears repeating: Crisis breeds opportunity.

We’ve got the crisis — now prepare for the opportunity.

Watch for this new report appearing soon. 

Call it like you see it,

Nick Hodge


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