July 2: Economic

Global demand for transportation fuels is at such a high level that deepwater oil drilling remains a necessity despite of the US moratorium in the Gulf of Mexico following BP’s oil spill. This is the opinion of Total SA Chief Executive Christophe de Margerie. Deep sea drilling continues around the world, for example in the North Sea. If that drilling were to stop, prices would skyrocket. This opinion is shared by other industry officials. He does admit that we need stronger safety measures around the world, but states that could bring higher oil prices. Oil prices have been stable over the past 6 months due partly to falling demand and stricter environmental standards. Total, a French oil company, has been one of the highest performing in the industry, but faces tough times ahead. He believes that as the Euro continues to weaken, oil prices will go up, and expects oil prices could be as high as $90 a barrel by the end of 2010. Margerie believes that those in the energy industry should work together to improve safety standards to keep those costs down. The industry will always be looking for new ways to improve safety, and he makes the point that rather than trying to blame BP, the best thing to do is to work together to solve the problem. BP is going to sell off $10 million dollars in assets this year in order to pay damages for the Gulf disaster. This may be an opportunity for others in the industry to purchase their assets and strengthen their own positions.

Clearly the disaster in the Gulf is beyond horrifying. There is no question that oil industry standards work largely to protect the oil industry and their earnings. However, those earnings are shared by their stock holders, many of whom are average American citizens and small businesses. Adding to the problem is the fact that deepwater drilling has been brought about by bans on near shore drilling. As the world continues its dependence on petroleum products, drilling cannot stop. Although many other forms of energy exist- such as solar and wind- there are no alternatives on the horizon that will provide the large amounts of energy needed. Therefore, it is vital that the oil industry works toward improved safety standards that allow them to meet the world’s needs, while protecting the lives of its workers as well as the safety of the ecosystems that they affect.

Amiel, Geraldine. "Total Chief: Don't Bar Deep Water Oil." The Wall Street Journal. 2 July 2010.