The impact from last week's oil rig explosion in the Gulf of Mexico cannot be overestimated. There was loss of life as well as untold damage to the environment. The oil spill currently measures 1,800 square miles and it is headed toward the United States coastline. Where this ultimately ends nobody knows for sure. Transocean Ltd. owns the oil rig and BP PLC operates it. One imagines that these two companies are doing their best to stanch the gushing of 42,000 gallons per day.
One would think that the impact on both Transocean and BP would also be tremendous. However, this is not the case. Since the accident, Transocean's stock price has dipped from approximately $92 per share to $88 per share, while BP's share price has fallen from $60 to $58. In other words, barely a blip in either company's market value. The societal and environmental price that we're paying whenever an accident like this occurs is monumental. And, unfortunately, these costs are not reflected in stock prices.
The price of a share of stock simply reflects a company's current performance coupled with predicted performance. If our energy needs in the near and mid-length future were expected to be met by renewable and more environmentally friendly sources, this oil rig explosion would make a much larger impact on these companies' share prices. Sadly, it hasn't really moved the needle.
We are far from weaning ourselves off of oil in any meaningful way.
Jonathan A. Schein is president/CEO of ScheinMedia and Publisher of MetroGreenBusiness.com.