Deepwater Horizon Fire Causes Oil Rig Explosion

Jeanne Sager

Flickr photo by kenhodge13
The name Deepwater Horizon sounds ominous, but until last night's fire on the oil rig that caused an explosion in the Gulf of Mexico, life was pretty tranquil.

The rig owned by Transocean, the world’s largest offshore drilling contractor, was drilling but not in production.

Then came the report of a fire on the rig around 10 p.m. CT. on Tuesday evening.

Located 41 miles off the shore of Louisiana, Deepwater Horizon was evacuated immediately, and the Coast Guard notes all but 12 of the 126 ship members made it back to shore.

But even as search and rescue missions continue, the affect on the oil and gas industry is expected to be substantial -- especially in light of a recent explosion at Washington's Tesoro refinery that killed six people.

As oil and gas supplies have grown significantly faster than expected, demand has failed to keep up with the supply. Oil fell below $84 this week -- although jets returning to the air will help build demand back up -- and retail gas prices fell for the third straight day.

Cut to Wall Street -- where the stock prices for Transocean are taking a hit, and the NYSE Arca Oil Index is trending downward.

Two tragedies in one month aren't going to shut down the oil industry, but add in the recent tragedy in the West Virginia coal mines, and our un-ending thirst for energy supplies has to be put in perspective. 

What's more they force the heated debate over natural gas drilling inland on the Marcellus Shale in the Northeast into the national forefront.

Is it time for a change in how we draw on our natural resources?


Read More