Cartoon Of the Week
Unless the offshore industry has actually been waiting for Trump's executive order, expanding offshore leasing in Federal waters is meaningless. Nobody is going to get much done in the three years before this order is likely rescinded again, just like Trump is rescinding Obama's. This executive order has pissed Democrats, anti-oil environmentalists and young socialists off more than they already were, if that is possible, and they will all literally rise from the dead, Lyndon Johnston style, to vote in 2020 to make sure this fella is one term and done. Unfortunately, my industry has yet to fully understand how angry Americans are at fossil fuels and how badly they want the stuff out of their lives.
Besides, the short investment cycle of the shale industry and ensuing low, volatile product prices, does not economically justify a rush to offshore drilling again. Gas prices are down in the $2.50 per mmbtu range. It often takes five years or more just to gear up and pin-point prospects, another five to find and get the stuff to market.
This executive order is designed to appease the anti-regulation crowd and fulfill some hollow campaign promises, nothing more. If this administration wanted the offshore industry to get healthy again it would cut royalty burdens or give it another tax incentive. Or better yet, it would reign in the shale oil industry a little, make 'em pay some debt back, in the name of price stability. Otherwise this offshore expansion order is just political fluff.
BREAKING NEWS UPDATE; 1.9.18: 20:00 CDT: the "prez' just caved...its OK to lease Federal offshore blocks, except off Florida. Holy cow. Now that's what ya' leadership.
Here ya go, hot off the presses: