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By Brian Hicks

After what seems like an eternity of bad news, BP (NYSE:BP) finally announced yesterday that it had something good to share with the world...

A containment cap recently attached to the sunken Deepwater Horizon well that’s been spewing 1 million barrels of oil per day into the Gulf of Mexico is actually capturing a portion of the runaway crude.

Time to break out the party hats?

Well a portion is, of course, better than none — which is what BP was stopping up until yesterday.

However, the consensus seems to be that this spill won’t be fully contained until the fall… which means hundreds of thousands of gallons of oil will continue to gush into the water for the rest of the summer, killing wildlife and industry alike.

So while a couple of high fives may have been exchanged at BP headquarters yesterday, they’re hardly deserved. Besides, this capping isn’t even the biggest story in the oil industry today... In fact it’s a potential UNCAPPING that’s got petro barons talking.

Senate Majority Leader Harry Reid has announced that he’s planning to move comprehensive energy legislation up to July’s docket. He’s also requesting that Senate chairmen come up with recommendations on direct legislation dealing with the Gulf spill.

“I think it is extremely important that you each examine what could be included in a comprehensive energy bill that would address the unfolding disaster in the Gulf of Mexico,” Reid said in a recent letter to the Senate chairmen.

And what might that legislation include?

Up until now, oil companies have only been liable for up to $75 million in damages when it comes to oil spills. Consider that the estimated cost of BP’s blunder is set to reach as much as $14 billion, and I’m sure you can see the writing on the wall.

Reid is pushing to uncap that liability limit and force BP to pony up the dough for their accident. "Among the actions I think we need to explore are ensuring that the oil companies are held accountable for their actions and the damages caused by their operations,” he states in his letter.

Given the absolute horror show that the Deepwater spill has become — and the onslaught of negative publicity anything associated with offshore drilling has been hit with — it’s very likely that Reid will have the public’s support on this one.

After all, BP is getting away with paying a paltry $75 million. (For the same amount, an MLB team can buy a slightly above-average ball player for only about five years.)

It seems absolutely criminal in the eyes of the public, and anyone who voted against them having to pay far more than that for their mess would be vilified beyond belief.

If the legislation passes, and no matter how much BP ends up paying, one thing is for certain… Oil companies are going to think long and hard about how important offshore drilling truly is to them these days. Plain and simple: Does the risk outweigh the reward?

Do petro firms wants to drill 35,000 feet into the ocean for black gold when the potential cost of an accident is completely on their shoulders? Tens of billions of dollars at stake if a single thing goes wrong…

At least in the short term, the threat of new legislation like could serve to spook oil companies from setting foot back in the water. The potential for a PR and financial nightmare is just too great right now.

Bad news for our oil supplies, no doubt… but great news for inland oil reserves who will see focus swung squarely around to them in the meantime.

Reserves like North Dakota’s Bakken formation is so far estimated to hold over 4 billion barrels of untapped oil… but that figure could now be as high as 9 billion with the discovery of the Three Forks/Sanish zone underneath the Bakken shale.

Big firms like Hess (NYSE:HES) are already involved there. But it’s the smaller oil companies that are really going to make their mark here — and make their shareholders some big profits.

Just a couple weeks ago, Brigham Exploration Co. (BEXP) — an independent oil exploration firm from Texas — saw their share price shoot up 11% in a single day, thanks to positive well results from their Bakken properties.

The BP spill is only going to produce more stories like these over the next few months.

President Obama has put at least a 6-month freeze on new offshore drilling permits, so we’re looking at a minimum of half a year’s worth of major activity in the inland oil market...

The U.S. Government is practically putting a mile-high fence up around its waters right now and daring oil companies to be so bold as to even think about hopping it to drill again.

It’s not a dare I believe they’ll take — not while the threat of uncapped liability is staring them straight in the eye.

Their only solution is to move inland and take their chances there. And you better believe those drills will be flocking to North Dakota very soon.

Source: Senate to Lay the Smack Down on Oil Companies