After Obama win, oil industry waiting and wary

Locals the oil-and-gas industry said they’re disappointed that Barack Obama defeated John McCain in the presidential election and are concerned his policies might impact their business negatively.

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Many consider McCain a fierce advocate for expanded oil and gas drilling.

Uncertain what new regulations might be placed on Wall Street and potential added taxes on oil-company profits, industry analysts say companies are taking and wait-and-see approach.

“I don’t think anyone’s surprised,” said Larry Wall, director of public affairs for the Louisiana Mid-Continent Oil and Gas Association, of Obama’s victory. In the last few weeks of the election, a McCain victory “was a longshot at best.”

As for what an Obama presidency will look like for the offshore oil industry, Wall said “it’s really too soon to tell.”

“I think some of the things the industry was looking at, now it has to look at very seriously,” said Ken Wells, president of the Offshore Marine Service Association. “We have a new president, a Democrat, and a Congress that’s more firmly Democratic. That’s going to have a lot of implications, some of them that industry will have to guard against.”

But the strength of Obama’s mandate also creates a chance for sweeping change on energy policy, for good or bad, he said.

“It’s not enough to just open up new areas; we’ve got to do it as part of a broader energy plan,” Wells said. “If the White House wants to cross the aisle and embrace both Republicans and a business community that’s been skeptical, then an energy policy is the perfect place to do it.”

Analysts say the greatest wildcard with Obama is whether and when he might permit opening up the eastern Gulf of Mexico, Atlantic and Pacific coasts to oil and gas exploration. Until a few months ago, he opposed all new drilling but has since backed limited drilling in certain areas as part of a broader energy plan.

“He supports restrictions on offshore drilling,” Wall said, “but we don’t know what those restrictions are or what they mean.”

Obama has expressed strong support for natural gas, on which Louisiana is well-situated to cash in.

“We sit on the largest deposits of natural gas in the hemisphere,” said Paris “Pye” Theriot, CEO of Louisiana Trade Consultants, a consulting and lobbying firm that advises small- and medium-size businesses.

“We’ve been promoting the use of natural gas. The more that he leans toward natural gas, that lends itself toward more exploration domestically.”

The Obama win will likely mean stricter carbon dioxide emission restrictions, meaning more business for companies that do environmental retrofits, said Joe Gibney, an analyst for Capital One Southcoast in New Orleans.

The McCain loss also means the loss of his plans to build new nuclear power plants, potentially to the detriment of the Baton Rouge-based Shaw Group.

But Wall Street’s meltdown and ensuing economic crisis, Wells said, may transcend all of that for the moment.

“That may be deeper than anything that may divide the party,” he said. “We really have to hope now they all work together to solve one of these mega-problems. We need a steady hand more than anything right now.”

“We can still stop a filibuster,” Briggs said. “We have the potential to stop any seriously bad legislation.”

He is convinced that the strong engine of energy demand will prevail long-term.

“You have to step back and look at this at 30,000 feet,” Briggs said. “In reality our country and the world needs energy. Louisiana is blessed with the resources and the infrastructure that no other state in the United States has. We will continue to see solid steady growth in our industry here.”