BP Gulf Disaster’s Impact

03-May-2010 | Reggie | Commodities Green Investing Oil & Gas

With no sign of easing, the well gushing crude oil into the Gulf of Mexico is well on its way to being one of the worst ecological disasters ever caused by man.  The fallout from the broken well is going to be absolutely huge.  Countless species in an already fragile ecosystem will be under severe stress as they try and cope.  Fishermen, Oyster farmers, and tourism operators will see their businesses get decimated.  As a small consolation, British Petroleum is accepting responsibility and agreeing pay for the cost of the clean up.  This disaster could mark a dramatic shift to how off-shore drilling is permitted and viewed.

Nothing gets people as upset and seeing helpless animals covered in oil looking sick and destitute.  When pictures of ducks covered in oil emerged in the aftermath of the Exxon Valdez spill, the public was outraged.  A lot of hate and anger was targeted towards Exxon in the form of multi-billion dollar lawsuits and unfortunately for the Oil company, they get about as much sympathy to their plight as Goldman Sachs is getting present day.  Many still resent Exxon to this day for the destruction caused to the pristine Alaskan environment.

The United States was on the verge of opening up more coastline to off shore drilling along the Atlantic coast.  Also, Oil companies have been lobbying for years to ease regulations allowing for drilling in the Arctic Ocean.  I suspect this spill will put a significant damper in those plans.  Companies already or wishing to drill off shore could face a severe environment tax or insurance premium for doing so.

All in all, the impact of this latest spill could cause a significant shift in how the Oil sands is viewed by the general public.  Although the Oil Sands is no choir boy, the damage to the environment is known and without surprise.  For open pit mines, large tracts of marsh and forest must be cleared but the grass and trees will grow back with the operation is completed.  Tailing ponds are created as water is diverted from the Athabasca River – current usage is estimated at 0.4% of the river.  Last year when bad weather prevented air cannons designed to scare away wildlife from the pond malfunctioned – a couple hundred ducks past away.  Fortunately, this has been an isolated incident.

Until the world’s need for Oil is alleviated by some sort of new technology, drilling for Oil remains a necessary evil.  Companies and governments will learn from their mistakes and any ecological disaster will be met with intense public dissatisfaction.  Hopefully this one will be an opportunity to re-evaluate the Oil sands impact on the environment and appreciate it for what it isn’t.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

No Comments

One Year After the Stimulus

17-Feb-2010 | kate | US Markets USA

Today marks the one year since the US stimulus plan known as the American Recovery and Reinvestment act which totaled $787 billion dollars.

In the first year, ARRA has provided individual tax cuts, fiscal relief to states and financial add to those most directly hurt by the recession, which has added roughly 2.3% to America’s real GDP growth and helped the country retain almost 1 million jobs that would have been lost without the act.

Today, President Obama was pleased with the results of the program “We acted because failure to do so would have led to catastrophe. Our Work is far from over, but we have rescued this economy from the worst of this crisis. And (he plans) to leave an economy that is stronger and more prosperous that it was before.” Critics bring up the reference to the National Debt where our children will be paying our interest because of programs live the Recovery Act. But supporting the President was his right hand man, Vice President Biden who added that they believe without a question that the Recovery Act is working very well.

So let’s see where all this money went:

So far 57% of the 787 billion has been put back into the economy. The 454 Billion breaks down as follows:

334 billion obligated in spending (of that the administration has outlaid 179 billion)

119 billion in tax relief

What’s Next?

Year One of the recovery act was about “arresting the free fall and getting quick relief out the door” while Year Two will be about “making investments to set the stage for a much more lasting and broad based expansion”

In Year Two the Obama administration will be setting out a mix of federal spending split evenly between payments and projects such as developing major projects under local transportation and awarding funding to local government.  The goal is to send the 60% of the remaining funding to distressed areas to help rebuild their economies.

Meanwhile, one year after the recovery the markets have bounced off of last year lows but are currently dealing with a new turn in the tides as we begin to anticipate a slow couple months in that start of our recovery. TSX was up 4.6 points while the American Markets also closed up slightly.

This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.

Retire First is a member of the Canadian Investors Protection Fund.

Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.

No Comments