Factbox: Key political risks to watch in U.S. oil spill

By Rick Cowan

WASHINGTON (BestGrowthStock) – It has been 43 days since an oil rig explosion in the Gulf of Mexico triggered an uncontrolled oil spill that has become one of the worst environmental disasters in U.S. history.

Each day that BP fails to plug the hole that is spewing oil from the bottom of the ocean means increased risk not only for the oil industry internationally, but also for politicians who find themselves with a massive crisis on their hands.

Here are some key factors to watch:

TROUBLE FOR OBAMA

U.S. presidents get blamed for just about any bad news on their watch and Barack Obama is not immune in this disaster.

Early this year, he began pushing for a renewal of offshore oil drilling. Since the April 20 oil rig blowout, Obama has had to face questions on whether he has second thoughts about deep water drilling. In the wake of the Gulf disaster, Obama has had to put new offshore projects on hold.

He’s also been accused by political opponents of reacting slowly to the oil spill and not doing enough to reform the federal agency that oversees drilling — the Minerals Management Service — which has a history of cozy industry relations.

Obama’s handling of the problem over the next few months could either be an opportunity to demonstrate leadership in a crisis or to be seen as a bumbler, like President George W. Bush was viewed in the aftermath of Hurricane Katrina.

Among Obama’s options: Ordering the federal government or military to “take control” of the whole mess. That could answer critics who say BP should not be calling the shots. But Washington would still have to rely on BP’s technology, including its underwater robots, since the federal government doesn’t have the resources to fix the oil well leak.

U.S. CONGRESSIONAL ELECTIONS

On November 2, voters in the United States will elect all 435 members of the House of Representatives and 36 of the 100 seats in the Senate.

The political party in power, in this case the Democrats, usually suffers losses in mid-term elections (elections in which the president’s term is not coming to a close).

“One of the key factors in determining how many seats the opposition picks up is the president’s popularity,” said Larry Sabato, director of the University of Virginia’s Center for Politics.

Obama’s approval rating is around 46 percent now, according to some public opinion polls. That’s not bad considering the nearly 10 percent unemployment rate in the U.S.

But if Obama’s popularity drops further because of the oil spill, “that will have an impact on the seats” that opposition Republicans could pick up in the November congressional elections, Sabato said.

There are high-profile races for Senate or governor in some of the states most impacted by the oil spill, namely Louisiana

and Florida. The environmental disaster no doubt will play a role in those elections, especially if the oil well keeps

polluting the Gulf of Mexico until August or later.

POLICY SHIFTS

Obama’s move toward more domestic offshore oil drilling already has taken a hit with the suspension of drilling at 33 deepwater exploration rigs and the cancellation of a project off Virginia’s coast.

Democrats in Congress, working with environmentalists, are looking at several other steps, including lifting oil company liability caps and toughening laws governing offshore drilling.

The oil spill, Sabato said, “gives rhetorical argument to the Democrats on why government needs power, authority, money and manpower” to keep an eye on industry.

It should make for an engaging debate with “tea party” small government candidates this year.

Policy makers in Britain, where a new coalition government is getting its footing, could face similar challenges given that BP is British-based.

BOBBY JINDAL

The 38-year-old governor of Louisiana and former U.S. representative is thought to have a bright future in the Republican Party. Some speculate he might run for president in 2016.

Jindal has complained that BP and federal authorities did not react quickly enough in the early days of the disaster, saying they were slow to bring in the equipment needed to keep the oil slick from reaching Louisiana’s shores.

Over the past 43 days, Jindal has received plenty of media coverage because of the oil spill. That could raise his national profile. But it’s unclear whether people will simply associate him with the disaster or see him as a rising star.

Prior to the oil spill, Jindal was best known for his lackluster televised speech in 2009 responding to Obama’s first address to a joint session of Congress.

Not surprisingly, in that speech, Jindal spoke of the need to “increase drilling for oil and gas here at home.”

BP/OIL INDUSTRY

The energy company’s shares have lost more than a third of their value, or about $67 billion since April 20. BP could face criminal investigations for actions taken either before or during the crisis, and it will be held responsible for billions of dollars in clean-up costs and economic losses suffered by local fishing and tourism industries.

Members of Congress are accusing BP of misleading the public on the scope of the disaster.

The company, once Britain’s biggest, has deep pockets, with net profits of $5.6 billion just in the first quarter this year.

Nevertheless, some are beginning to wonder whether BP will be able to survive a disaster that has seen the company fail time after time in attempts to stop the gushing oil.

More broadly, it’s unknown whether the Gulf of Mexico spill will be to the offshore oil industry what the 1979 partial core meltdown at Three Mile Island was to the nuclear industry: the disaster stopped it dead in its tracks for decades.

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(Editing by Alistair Bell and Eric Walsh)

Factbox: Key political risks to watch in U.S. oil spill