A story in today’s New York Times indicates that deep-water wells will face greater scrutiny than in the past. Click here to read the story.
Implications: While I don’t consider myself a futurist, my hunch is that deeper environmental reviews before permits are issued is only a first hint at greater scrutiny of the oil industry. Having earned the title of “worst environmental disaster in U.S. history” (at least by the media), we can assume that greater regulation of the industry is inevitable.
With greater regulation comes more expense (which I’m inclined to think will be passed from the oil company to the consumer), as well as possible delays in supply (we already see significant market swings from time to time, whether they be related to hurricanes in the gulf, incidents in the Mideast, or clogged shipping lanes for oil tankers). Both of these issues could lead to higher prices for fuel, and any product which consumers fuel in the manufacturing or transportation-to-market process.
Yes, that would cover just about everything.
I realize this might sound a bit repetitious from my earlier remarks about The Fuel Economy, but when a market trend seems so inevitable, it is worth repeating. Even though many marketing strategies are still so focused on price, it would be prudent to being (or continue) talking about how your product or service adds value to the consumer’s life; why it is worth the money. When (not if) your costs go up over the next few years, it will be easier for the consumer to accept if they own a long-held appreciation for your value proposition. Less so if a company tries to sell its’ worth at the last minute, as prices are already headed higher.
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