In Offshore Drilling Freeze, Rumblings of a New Era for Oil Industry

By Clayton, Mark | The Christian Science Monitor, May 27, 2010 | Go to article overview
Save to active project

In Offshore Drilling Freeze, Rumblings of a New Era for Oil Industry


Clayton, Mark, The Christian Science Monitor


The six-month moratorium on new deepwater offshore drilling announced by President Obama Thursday isn't likely to have a big impact on the oil industry - unless it's a sign of things to come.

In itself, President Obama's decision to impose a six-month pause on offshore oil leasing, announced Thursday, is unlikely to have any great impact on US oil supplies or prices in the short run.

But within the oil industry, there is some concern that this offshore drilling moratorium could be the beginning of a new oil regime, with significantly tougher regulations to follow, as Mr. Obama promised.

US companies still see the Gulf of Mexico as their backyard with a stable, relatively predictable political and regulatory regime. But if new strictures on the oil industry are seen as being too reactionary, the move could in the long run drive companies to less tightly regulated places like Angola in their search for the next big discoveries. That could mean a loss of jobs in Gulf states and possibly weaken US energy security.

IN PICTURES: Louisiana oil spill

"This could be a speed bump, or it could be the beginning of a transition toward long-term decline in US oil production," says David Pumphrey, an energy analyst at the Center for Strategic and International Studies in Washington. "It could put us in the position of importing more oil and possibly facing slightly higher oil prices in future because less non-OPEC oil is moving into the marketplace."

Obama's announcement Thursday marks a reversal of significant chunks of the offshore exploration plan he forwarded in March. On Thursday, he said he would:

Suspend planned exploration of two locations off Alaska's northern coast.

Cancel August lease sales in the western Gulf as well as a proposed lease sale 50 miles off the coast of Virginia.

Continue for six months an existing moratorium on any new permits to drill new deepwater wells in the Gulf and other areas of the outer continental shelf.

Suspend action at 33 deepwater exploratory wells being drilled in the Gulf until investigations are complete on the causes of the Gulf spill.

The president said to reporters that he had erred in one major respect when he planned for more offshore oil exploration in March: "I was wrong in my belief that the oil companies had their act together when it came to [handling] worst-case scenarios."

Calling oil industry connections with federal regulators at the Minerals Management Service "cozy and corrupt," Obama said he plans to unveil "aggressive new operating standards and requirements" for the offshore oil industry.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

In Offshore Drilling Freeze, Rumblings of a New Era for Oil Industry
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?