Alex may not go down as the most destructive hurricanes to pass through the Gulf of Mexico, but it could be one of the filthiest, after pushing even more crude oil onto the beaches…
Cleanup efforts came to a halt during the week as Hurricane Alex swept through the Gulf of Mexico’s waters. As a result, hundreds of oil skimming ships were forced to retreat.
By the time Hurricane Alex made landfall in Mexico a few days ago, we were beginning to think that BP dodged a bullet. In fact BP may have been silently praying for Alex to linger around for just a little longer.
You read that correctly.
Even though the thought of Alex causing more tar balls to wash up on the shore is a nightmare to BP’s public relations department, the storm may have had its benefits, too.
According to the NOAA, the high winds and seas will mix and “weather” the oil, which can help accelerate the biodegradation process.
But keep in mind the storms aren’t what will have a lasting effect on the oil market…
Clamping down on offshore drilling
Call it a knee-jerk reaction or a well-calculated maneuver, but I still don’t think Obama fully weighed the consequences when he ordered a six-month ban on deep-water drilling last May…
We know better than that.
In fact one of my readers hit the nail on the head when he said, “We need that deep-water oil. There’s no getting around that fact. No ifs, ands, or buts about it.”
So to drill or to not drill… is that even a question anymore?
Well, we may have an answer to that question a lot sooner than previously thought.
Next week, the White House will finally decide whether or not to lift that six-month drilling moratorium. Remember, the reason for the ban was to allow a presidential commission to study the future safety of offshore drilling.
Leave it to the government to hand out the red tape.
No matter which way the decision goes, I have a feeling the issue will be tied up in court battles for months to come, and maybe even outlast the BP cleanup itself.
So where does that leave us?
In two days, I’m going to tell you how this bureaucratic mess has one tremendous upside for smart investors like us.
Stay tuned.
Enjoy your weekend,
Keith Kohl
Editor, Energy and Capital
P.S. In case your work week was as hectic and unforgiving as mine, feel free to kick back and catch up on the week’s top investing stories from Energy and Capital and our sister publications.
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