Reply #21: Net effect: I win, you lose! [View All]

[Kip Humphrey]

What will be the effect of this? Given recent history whereby cost of offshore development has skyrocketed 100% in the last 2 years, the cost of offshore oil production development (i.e., drilling) overall will likely double again as mucho dollars and demand chase already constrained services, resources, and engineered equipment.

The very earliest one might expect to see oil and gas flow from new East & West Coast wells is 7 years and, given the shortage in development resources, will most likely be closer to 10 years. Meanwhile, as one of a very few deepwater project controls engineers, I fully expect a nice big, fat raise out of this. Unfortunately, since the production cost impact will be felt across all open water development worldwide and, in particular, the Gulf of Mexico, expect the price at the pump to rise without significant production increases for 7-10 years. Thank you, Congress!