Offshore | Thursday, January 14, 2016 | Randall Luthi
In the year ahead, we may witness pivotal change in Washington, D.C. While the current administration pushes out the final planks of its agenda to cement the Obama legacy, candidates for the next administration will spend 2016 trying to convince voters that they are the best choice to lead the nation. For some, 2016 ushers in the end of an era; for others, it brings the dawn of a new one. For the offshore oil and natural gas industry, 2016 may be a year in which survival is considered a victory.
Barring a sudden disruption of the world’s oil supply or an unexpected surge in the Asian economy, global oil production levels will likely keep oil prices low for much of 2016. Producers and service companies in the US Gulf of Mexico pared back in 2015; 2016 could bring more of the same. The offshore industry will also see a slew of regulations being pushed through at the end of the Obama administration.
President Obama has made it clear that his remaining actions, including his regulatory agenda, will filter through the prism of climate change. Unfortunately, many of the administration’s core supporters see fossil fuels as the primary target in the war to reduce greenhouse gases. The rejection of the Keystone Pipeline; the cancellation of two proposed oil and gas lease sales off the coast of Alaska; and the refusal to grant extensions to companies needing extra time to explore inArctic waters are clear indicators that the development of oil and gas will not be seen as a priority in 2016. Those demanding that oil and natural gas be left in the ground clearly have the president’s ear, particularly when it concerns new exploration and production.
Read the full editorial here.