Will Offshore Drilling 'Go The Way Of Nuclear Power'?

Oil is still spilling into the Gulf of Mexico. The feds are looking into criminal charges against BP. And it may take months before the well is capped.

What are the long-term implications for BP, and for the oil industry?

"In the United States, offshore drilling seems set to go the way of nuclear power, with new projects being shelved for decades," Harvard economist Ken Rogoff predicts. "And, as is often the case, a crisis in one country may go global, with many other countries radically scaling back off-shore and out-of-bounds projects."

"It took more than thirty years to overcome the psychological and political damage done by [Three Mile Island], and there was no actual nuclear leakage," writes David Kotok of Cumberland Advisors, an investment management firm. "We estimate that Deepwater Horizon may end up larger in national impact than the nuclear event decades ago."

Of course, the world is far more dependent on oil than it ever was on nuclear power. Oil production, clearly, will continue to go on around the globe. But, Kotok writes:

Our expectation is that the oil business is about to enter a period of intense scrutiny and regulation worldwide. It will confront higher cost structures and much more inspection and regulation. This will eventually be reflected in higher oil prices.

BP itself is the biggest oil and gas producer in the U.S., and the biggest producer in the Gulf of Mexico, Bloomberg News says.

The company's stock is down by more than a third since the drilling rig leased by the company exploded on April 20. That low stock price has prompted some speculation that the company could be bought by another oil giant, such as Shell.

But, as the FT points out, antitrust regulators might balk at the merger of two of the biggest companies in the world. And BP's board would likely resist any attempt to "sell the company on the cheap," the FT says.

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