Drill, baby, drill!

Oil Drilling

A recovery in the value of oil has led to a surge in confidence for the world's drillers, kick-starting a global production pandemic that feeds on high energy prices.

The AP reports that some oil executives have declared the yearlong slump in petroleum over, pointing to an hike in exploration and drilling operations across the globe. At $82 per barrel and growing, oil prices are finally at a level that gets drillers excited.

This has led Gene Isenberg, chairman and CEO of Nabors Industries, to declare: "We are in an extraordinarily good position to prosper by the recovery." This becomes even more significant when you consider that the company operates rigs in the US, one of the hardest hit regions of all in terms of energy prices.

$80 oil "worrisome"

The increase in value is expected to create more jobs as companies reach out across the world in search of more reserves, especially shale gas deposits. But Energy Secretary Steven Chu warns that the $80 price tag is "worrisome" because it could slow a global economic recovery if people have to divert more money to energy costs, a concern that is shared by many energy experts, reports the AP.

Even the oil industry itself is not universally jovial about the up-tick in oil prices. Companies have had to charge more for petrol at a time when demand is at a premium. That has led to closures and falling supplies of gasoline.

Arctic drilling

But companies will make the most of the recovery in oil, and there is no better sign of the times than the fact the Obama administration recently gave the conditional go-ahead for Shell to begin drilling offshore for oil and natural gas in the environmentally sensitive Beaufort Sea, in Alaska.

The Minerals Management Service, part of the federal Interior Department, have given Shell the green light to begin exploratory wells off the north coast of Alaska in an Arctic area that is home to large numbers of endangered bowhead whales and polar bears, as well as walruses, ice seals and other species.

This has angered environmentalists, but is indicative of the incoherent nature of Obama's drilling policies. The domestic production of oil is still high on the list of Washington priorities, and the recovery in commodity prices will only serve to increase drilling in and around the United States.

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