After The Spill: Big Oil plots its comeback - Isn't it time to regulate them more severely?

Christopher Helman — Despite the death threats, BP Chief Executive Tony Hayward says he's sleeping well these days. He looks it: fresh, almost relaxed in his makeshift corner office at BP's emergency response center in Houston. He insists the company has been "extraordinarily successful" in its response to the spill, which so far has dumped more than 100,000 barrels of oil into the Gulf of Mexico since Apr. 20, threatening tourism and fishing from Florida to Texas. By mid-May 13,000 workers and 500 vessels were trying to contain the giant leak. Leaning back in his chair, Hayward compares the operation to D-day. He quotes Winston Churchill: "When in hell, keep going." Hayward gropes for an upside. "Deepwater drilling will be transformed by this event," he says. "If we can win the hearts and minds of the communities that are impacted, then we have the potential to enhance our reputation rather than have it damaged."

Delusional? Experts agree the industry will change in the wake of the disaster. "Regulations have not kept up with technological change," says Beverly Sauer, professor at Georgetown's McDonough School of Business. She sees it swinging back. For 20 years the oil industry has pushed farther offshore, drilling 14,000 wells in water depths of more than 700 feet, into ever trickier reservoirs, with higher pressures and temperatures (and very few serious accidents). Something bad was bound to happen.

Yet, despite the environmental damage this spill continues to cause, offshore drilling will not go away--just as Exxon's Valdez disaster hardly stopped the shipping of oil by sea. The deep water (2,000 feet or more) gives up 1 million barrels per day from the Gulf of Mexico, 20 per cent of U.S. oil output. By 2015 it could rise to 30 per cent, reports IHS-CERA.

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