News of the Gulf Coast oil spill was only hours old when Money Morning readers first weighed in on the tragedy. The comments and the e-mails haven't stopped since.
The chief concern: U.S. taxpayers will yet again be stuck with the tab for a problem caused by corporate malfeasance and lax governmental oversight.
Stricter government regulation could enforce safety shut off valves with remote control operations – a device that could have prevented the current disaster. The hefty $500,000 price tag on the safety control has been a past deterrent, but hard to argue against in the wake of the billion-dollar Gulf spill.
But investors understand that the long haul is what really matters, meaning that there's perhaps a bigger question here than who's at fault, and what will this cleanup cost….
U.S. President Barack Obama recently lifted a drilling ban on new offshore drilling off the U.S. East Coast.
Is that the right move? Washington wants to limit U.S. dependence on foreign oil and create jobs, while also protecting natural resources and preventing future spill disasters. But the United States faces a future in which oil prices are likely to soar as thirsty nations compete for dwindling supplies.
"Right now — and there's no nice way to say it — the situation is truly ugly," Byron King, contrarian investor and editor of Outstanding Investments advisory service, said to clients. "There's a major oil spill to control and clean up. In the U.S., we're certain to see much tighter regulation and higher costs for working offshore. And d'you know what? That's fine. There's no such thing as being 'too safe' in an ultra-dangerous environment. But danger or no, offshore energy development is not going away."
Clearly, our leaders in Washington, the U.S. energy sector and U.S. environmental agencies and interests will have much to debate in the months and years to come.
We want to know what you think.
That brings us to next week's Money Morning Question of the Week: Is U.S. offshore oil drilling going to disappear – why or why not? How does the industry affect you as an investor, taxpayer and consumer?
Send your thoughts, questions and concerns to firstname.lastname@example.org.
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News and Related Story Links:
- Money Morning:
Full Cost of Gulf Oil Spill Just Beginning to Surface
Drilling expansion dead in Congress
- The Wall Street Journal:
Oil Agency Draws Fire
- The New York Times:
Gulf Oil Spill Is Bad, but How Bad?
- Money Morning News Archive:
Question of the Week Feature