More Than Ever: Tankers and Pipelines

I am afraid the Deepwater Horizon disaster will prove to be the undoing of any positive political momentum for increased offshore oil drilling for years to come. This is unfortunate. I view the Deepwater Horizon sinking and subsequent leak the same as an airplane crash, it is tragic and when these things happen the cost can be high, but we don't shut down commercial aviation because the benefits, which are taken for granted, are so immense. The same goes for our hydrocarbon energy-based economy. The benefits are immense and misunderstood, but when the system has a rare serious incident, it is a crisis level failure and the costs are huge. Still, the political deck is stacked against continued oil offshore exploration and production. It is much easier to argue for shutting things down than for taking the stand that after you tally up the benefits and the costs over the long run, we're better off drilling. So drilling will be curtailed for many many years until the industry can rebuild its safety record and time has healed the impact of this disaster.

That said, restrictions on drilling were in place and weren't opening up all that fast. This incident will only make it politically easier to advocate a position that is already fervently advocated by many. I've explored the investment implications of this before. Those implications are all the more relevant today. We'll need the energy, so more than ever we'll just be bringing it in from far afield. Brazil comes to mind. Canada of course. Angola, Ghana, and Uganda too.
Tankers and pipelines, young man. Tanker and pipelines.

UPDATE: Perhaps this is a good time to remind people that BP spent the last 10 years sermonizing. A little less preening and a little more attention to detail would have been nice.