Did he say that out loud?

CBC News - North - N.W.T. gas could gain from U.S. spill: minister

I don't know what to think of this one. NWT Industry Minister Bob McLeod has suggested that the looming eco-disaster in the Gulf of Mexico could actually be good for the MVP project.

And, yes, he's likely right. A few weeks ago, Barack Obama announced new regulations to expand offshore drilling in US waters. In the wake of BP's tragic accident, this proposal is now pretty much "dead in the water", if you can pardon the pun. The energy from that anticipated drilling will have to come from somewhere. Even if the demand remains high for oil, that only puts more pressure on producers to develop more of the Athabasca Oil Sands.

Even so, this seems a little opportunistic, at least at this juncture, but when an Industry Minister attends an industry conference (in this case, the Offshore Energy Technology Conference in Houston), I guess he has to say something.

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I haven't mentioned the April 20 explosion of BP's Deepwater Horizon well, 50 miles off the coast of Louisiana in this blog, because I want to maintain a tight focus on the two pending northern pipeline projects. However, this event will be something of a game-changer and it's going to have an impact on these projects. So, since Bob McLeod brings it up, it's time for me to weigh in...

Right now, I'm praying that BP's rather daring scheme to place a heavy "cap" over the spewing well works. The idea is interesting: place a big, heavy box over the wellhead, and pump the watery oil in the box up to the surface where it will be collected in boats. Who knows, it should even be refinable. This is one of those things that hasn't really been done before, and at this point it's the only hope that this oil slick doesn't get a LOT bigger.

Regardless of whether this works or not, there's already a huge slick making its way toward land. It's bigger than the Exxon Valdez spill of 1989, and threatens an absolutely massive stretch of coastline in the Southern US, Mexico, and the Caribbean. The optics are going to be impossible to miss. As of now, this shows the potential of being an ecological disaster of historical proportions.

What are the implications? Some of them are already being seen. It's turning the legislative agenda in Washington upside down as we speak, as lawmakers there prepare to consider new energy policy later this year. Voters will be very vocal in their opposition to any expansion of offshore drilling. That doesn't mean new drilling won't be permitted at all, but it's safe to say even now that there will be much less than previously expected.

So, the immediate fallout is a drastically slower expansion of offshore drilling in the US. That's a safe bet. Further out is a little murkier, but I think there are a few assumptions we can safely make. First, the taste for oil in general is going to decline, and the demand for gas could grow even faster. Even if oil consumption isn't affected, there will be more reliance on non-aquatic sources. Like the Oil Sands. All the while, conventional gas production keeps declining across North America, even in the wake of significant Shale Formation discoveries.

Yes, the future does look good for natural gas, and northern pipelines as a result, but that doesn't mean I'm happy about the circumstances.