Effects of the GOM Drilling Ban

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dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Effects of the GOM Drilling Ban

Post by dan_s »

It has been estimated that the Federal deep water drilling ban could cost 50,000 just in the Houston area alone.

Keep in mind that prior to the BP blowout there were 36,000 wells drilled in the GOM without a major accident. IMO "stuff happens" in every industry. You don't shut them down. - Dan

From today's Raymond James “Energy Stat of the Week,” as published 6/14/2010.


Over the past six weeks, the stock market has pummeled companies levered to U.S. deepwater activity. Today, we are going to take a broader view at what the deepwater drilling moratorium means for (1) jobs and economic activity in the Gulf Coast region, (2) U.S. oil production implications, and 3) associated balance of trade dynamics. The big picture is this: Whatever the tactical political advantages of the moratorium for the Obama administration, the macroeconomic damage of this policy response is equally real, and eventually the political pushback will begin to bite. Our central message is that this moratorium cannot and will not be permanent. From the standpoint of energy independence (remember that phrase?), trade deficits, and jobs, it is clear that a prompt return to deepwater drilling is in the Gulf Coast's and America's national interest. The sooner the White House recognizes this salient fact, the better. In an accompanying oilservice update (published today), we also address the implications of the current deepwater drilling ban in the Gulf of Mexico for offshore drillers and other service providers. While rationality suggests that the deepwater drilling ban will end within six months, our conservative modeling and valuation parameters lead us to assume it will last through mid 2011.
Dan Steffens
Energy Prospectus Group
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