Oil Companies Still Gambling

Written by Japhet

Topics: Oil

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My mother always told me that gambling could very quickly become an addiction. I guess I can’t be too surprised that oil companies, who seem to be dealing with another type of addiction, are also having trouble weaning themselves away from the continued faith in oil platforms in the Gulf of Mexico. Economically it doesn’t make that much sense. There isn’t that much oil left to be sucked out of the earth’s crust and the oil companies, which could be preparing for sustainable energy revolution by investing billions in solar, wind and geothermal energy intiatives, are spending their savings on building stronger platforms that can withstand Cat4 hurricanes like Rita and Katrina. Talk about a poor investment.

None of these platforms will stay standing if hurricanes continue to increase in ferocity. Cat4 and Cat5 ‘canes will continue to gain strength, especially in the warming oceans of the Gulf of Mexico, and will continue to bash the hell out of New Orleans, Mobile, Corpus Christi and the rest of the Gulf Coast.

But they keep building new ones. Over 4,000 platforms currently exist and of those 166 were completely destroyed or severely damaged by Katrina and Rita. This year, NOAA predicts another round of 16 storms with 4-6 being above Cat4.

At some point the economics of this just doesn’t make sense. If the oil companies continue to invest in oil as the future of their companies they will not be in business for the next century. On the same note, if car companies like Ford, GM and Daimler-Chrysler continue to build gas guzzling SUVs and trucks that depend on massive access to cheap oil they’ll be buried in the same corporate graveyard next to the likes of Exxon-Mobil and Chevron.

It’s often said that addicts are the last ones to acknowledge their addiction. Let’s hope the oil companies and automakers realize their it and restructure their business strategies before they come crying to the people for a government bailout.

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