If nothing else, the big oil companies are audacious. Just as thousand of barrels of oil spill from the Deepwater Horizon blowout in the Gulf, Shell Oil is in the final stages of getting court permission to drill in the Arctic ocean, north of Alaska.
The work in the Beaufort and Chukchi seas is set to begin in July.
Environmentalists are trying to block the drilling, but their success is unsure. Shell is using the rights granted to it and it already invested $3.5 billion in exploration costs as leverage with the court. According to the AP, one of the challenges is based on the premise that Shell “doesn’t say what happens if the drill ship is disabled or has sunk.” The approval of the plan may go forward without that issue being addressed.
The irony of the situations of BP and Shell point to the question of whether the world can depend on dwindling oil supplies and face higher energy costs or on increasingly risky drilling to satisfy a growing need for crude due to an economic recovery and the thirst of China.
Obama may be faced with shutting down offshore drilling which he recently pushed to expand. The BP incident may slow approval of drilling in water or wildernesses around the world. There will be a price to pay for that, and the price may not be part of the math as the government and BP try to cap the spill. But, there will be a price to pay in the future and on balance there may be some regrets.
Douglas A. McIntyre
Top Gaining Stocks
Top Losing Stocks