At last week’s Miss USA pageant, Virginia’s 21-year-old Samantha Casey answered a question about the leak: “I think that there are a lot that are responsible. I’m not going to say that they are entirely responsible, but I do think they need to take the responsibility for what happened. But at the same time, I think we need to figure out better ways of finding alternative energy fuels and reducing our dependency on oil in general.”
Barclay’s says her bellwether response has negative implications for American production:
The above is a minor example of how far drilling policy has worked its way up the broader agenda, but, in our view, is still a good example of how the issues raised by the Gulf spill have become so entrenched and mainstream as to be very unlikely to go away swiftly. In particular, we see those issues as making it harder, or least slower and more expensive, for the US industry to boost supplies. The two main frontier areas for the oil and gas industry in the US are drilling in deeper offshore waters and working over old or underexploited onshore provinces using horizontal drilling, sometimes accompanied by significant use of fracturing. The latter, of course, involves the injection of high volumes of frac liquids under pressure; in the current political climate, it seems difficult to accept that this can necessarily continue exactly as before and under the current cost and regulatory conditions. The supply will most likely still arrive, however we would expect it to come onstream later than it would otherwise have done and to carry a higher price tag.
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