The oil spill is Bad News with a capital “B” for enviros, even those of us who lean toward the critically optimistic approach to environmentalism. With oil still leaking in the Gulf after nearly two months, the increasingly cumbersome remediation strategies coupled with increasingly ridiculous names (I’ve got my money on Death Squad Burst as the cure) have many people plugging their ears to news updates since the oil leak itself refuses to be plugged.
If you are searching for a ray of hope- here’s a good one for you. Business Green is reporting that the companies that insure oil giants like BP and its brethren have realized that their risk assessments for offshore drilling might just be missing a factor or two. This stuff is expensive when it goes bad, apparently. Who would have guessed it?
The news comes on the heels of BP’s credit rating drop in the books of both Moody’s and Fitch– two of the world’s biggest credit rating agencies. The result is that companies who want to engage in deep offshore drilling are going to be paying a lot more to insure this risky practice- fifty percent more for projects like Deepwater Horizon and ten-fifteen percent more for similar projects in shallower waters.
As the hunt for oil reserves requires drillers to go further and further and deeper and deeper, these operations become more expensive to undertake and the increased cost of insurance drives up the total cost of doing oil business. This makes alternatives like energy efficiency upgrades, smaller cars, and cleaner sources of power increasingly cost competitive. I say bring it on.
To paraphrase Sarah Palin, “Bill, baby bill”