Now that the suspension in activity due to the deep water spill in the Gulf is coming to an end it is only a matter of time before the oil industry can begin economic activity in the area again. The length of time depends on how long it takes the industry to implement new saftey and environmental rules and how long federal regulators take to confirm these new rules legitimate. Some of the new rules the oil companies have come up with include, companies will be required to hire outside auditors to certify that blowout preventers will work, future clean up plans for large spills required, federal regulators will have more input in how companies drill, chief executives of companies will be required to certify that their operations regarding offshore drilling meet the new standards, new-lease sales and deep water drilling projects must meet environmental concerns, and federal regulators must comply with new ethic rules in regards to their personal contact with oil industry officials.

The effects of these new rules is speculated to sufficiently hurt the economic productivity in the Gulf. It is said that the new economic regulations could cost the companies drilling in the Gulf 183 million a year as well decrease the daily production by 12% and increase production in normal deep water wells by 20-25%. These new rules are costing the US government as well. Obama and lawmakers approved a 25$ million dollar funding last month for overseeing the regulation in the gulf. Overall, even though the complete halt on production in the Gulf is over new regulations could keep the activity level where it used to be in the spill after math. The key is making sure the restrictions are enough to prevent further problems but not over the top where there is no hope for successful oil activity in the Gulf.


-Nicole Lombardo

(Wall Street Journal, Stephen Power, Siobhan Hughes)
http://online.wsj.com/article/SB10001424052748704164004575548562706663060.html?mod=WSJ_Energy_leftHeadlines