Obama To Let Offshore Oil Wells Multiply Like Locusts

The Green movement will despise President Obama’s decision to open portions of the Gulf and offshore regions from Delaware to the Carolinas to drilling. The oil industry will love it.

“To set America on a path to energy independence, the president believes we must leverage our diverse domestic resources by pursuing a comprehensive energy strategy,” said a statement provided by an administration official in a document published by CNN.

The ability to drill in the areas ends a ban of over two decades that kept oil companies from exploration of new fields.

The announcement will pit liberal Democrats who mostly disapprove of threats to the environment against Republicans who claim that new exploration and drilling are the only way to find supplies that will bring down America’s reliance on foreign crude.

The President’s decision may also open the door for exploration in untapped regions which previous Administrations have restricted. This would probably include deep water areas off of the California coast.

The race for new deposits has heated up, especially since China’s oil needs have increased sharply. China has made deals to fund drilling into huge reserves off of Brazil and part of Africa. Large Western oil companies like Exxon Mobil (XOM) and BP (BP) now find themselves in competition for reserves with People’s Republic based corporations like Cnooc and PetroChina (PTR). Enabling American producers to drill in their own back yards may be critical to keep the cost of exploration by US companies low.

The race for producing new oil has already begun to shift rapidly from land-based fields to deep water reserves. Saudi Arabia’s ability to produce crude is being undermined by the age of its fields. In the meantime, new technology allows oil firms to drill miles beneath the ocean’s surface, something that was impossible just a few year ago.

The US has just expanded its oil reserves which makes it more competitive against both China and the largest OPEC nations.

Douglas A. McIntyre

Sponsor: 3 Recovery Stocks to Own Now.Get the names of the best cheap stocks to rebuild your wealth in 2010 and beyond. Each stock sells for less than $10 a share and is set to double in the next 12 months. Click here to learn more!