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This is how the market’s responded to the moratorium on offshore drilling in the Gulf:
Row your rig ashore
In case you missed it, there’s now a six-month ban on drilling for oil in the Gulf of Mexico.
This presents a two-fold blow to both the affected region and the nation as a whole.
First, we have to deal with the lost supply, now estimated at up to 2.5 million gallons per day. In a country that imports two thirds of its oil, losing any amount of domestic supply is a problem.
And what we’re not getting from the Gulf, we’ll have to find someplace else — preferably on domestic soil.
Florida Governor Charlie Crist is already considering measures that would permanently ban drilling in his state’s waters.
And just last night, Obama implied his moratorium could last well beyond six months:
I’ve issued a six-month moratorium on deepwater drilling. I know this creates difficulty for the people who work on these rigs, but for the sake of their safety, and for the sake of the entire region, we need to know the facts before we allow deepwater drilling to continue. And while I urge the Commission to complete its work as quickly as possible, I expect them to do that work thoroughly and impartially.
It could be years before drilling resumes in the Gulf.
He then went on to rail against the Minerals Management Service, vowing to turn it into “the oil industry’s watchdog — not its partner.”
So good luck getting drilling permits once the ban is finally lifted…
Second, we have to deal with the jobs lost as a result of the ban. Thousands are out of work because of drilling stoppage.
The answer to both problems — as we’re already seeing — is a ramp-up of domestic drilling… particularly in the Bakken.
Take a look at how operators there have performed as companies in the Gulf lost half their value:
Thanks to the BP disaster, we’re looking directly at a new rush on inshore domestic drilling.
And Keith Kohl has been on top of it since day one, preparing a full report on how is readers can profit as drillers row their rigs ashore.
Anyone can see that Gulf oil drilling is having death throes. But only Keith knows how to find the companies that will surge as it dies.
Beyond the spill
Even though robust formations like the Bakken are about to shift into overdrive, it’s still no secret that the days of cheap oil are over.
Of course, we’ve been blowing the peak oil horn for years… But last night, the commander-in-chief took the opportunity to take it mainstream, telling the entire country via network television:
Drilling for oil these days entails greater risk. After all, oil is a finite resource. We consume more than 20 percent of the world’s oil, but have less than 2 percent of the world’s oil reserves. And that’s part of the reason oil companies are drilling a mile beneath the surface of the ocean — because we’re running out of places to drill on land and in shallow water. For decades, we have known the days of cheap and easily accessible oil were numbered.
But you know what we have plenty of?
And mark my words… It’s about to become this country’s fuel of choice — not just for electricity generation and home heating, but for transportation as well.
We’re about to witness an energy two-step.
First, a switch to inshore domestic oil instead of treacherous offshore drilling; and second, a monumental push to harness our massive natural gas reserves.
You can read all about how to profit from the first step in Keith’s brand-new report.
And I’ll have a new report out later this week on how to profit from the natural gas conversion.
Call it like you see it,