Tuesday, June 8, 2010

Obama to Rely on Shallow Water Exploration for Gulf Coast Economic Recovery

The Gulf Coast of the United States is devastated by the explosion of the oil rig some 50 days ago. As oil washes up on shores, as far away as Florida, many industries in the Gulf are being impacted. President Obama announced they are working to establish new safety requirements that will allow offshore oil and gas exploration in shallow waters. One of the biggest obstacles to capping the thousands of gallons of oil spewing into the Gulf is the depth at which the well head is at. Several articles have been written about the lax of rules by regulators and company officials alike. A lot of blame is to go around but, perhaps, the biggest factor is the depth that the United States government has pushed companies drilling for oil to.

The concept of NIMBY creeps into play when discussing shallow water drilling. No one wants to sit on a beach when large oil rigs dot the horizon thus it forces those rigs further out into deeper waters which increases the environmental impact when an oil spill occurs. The White House is reconsidering shallow water exploration because of the loss of jobs and income to the Gulf Coast. President Obama pointed out when he met with Cabinet officials, "What is clear is that the economic impact of this disaster is going to be substantial and it is going to be ongoing" (http://online.wsj.com/article/SB10001424052748703303904575292210472764880.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop). Finally, the White House understands that in order for economic depressed areas to recover is through private industry.

The new regulations expected to be implemented is to "require drillers to have independent operators certify that the blowout preventers work as designed to shut off the flow of oil; that independent operators certify the well design plans is adequate, including proper casing, or cement lining…" (http://online.wsj.com/article/SB10001424052748703303904575292210472764880.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop). Now the question is will regulators, over time, slowly retreat to the cozy relationship that exists now with drilling companies? Regulators must share the blame for the explosion since they allowed, by signing off, for the lax in deep water drilling regulations. We are a country dependant on oil and constantly looking for independence from foreign oil. While the oil spill and damage from it has given environmentalists new ammo to fight for renewable energy it is interesting that a huge wind farm proposed off the coast of Cape Cod has been nixed.

I applaud President Obama for recognizing that oil is still our best option right now and private industry is the true method to creating and sustaining jobs that drive economic recovery. Rumors swirl about a second stimulus bill with more government spending, why doesn't President Obama apply the same logic for reopening shallow water exploration to the rest of the economy?