Last night a pipeline erupted into flames after the pipe was hit by a tug boat pushing an oil barge. The pipeline fire, located in Bayou Perot 30 just south of New Orleans, probably brought reminders of another Gulf-related oil related fire still burned in our minds -- that of the Macando disaster in 2010. It's just another reminder that the production and transportation of the energy that we rely on is not something we should take lightly.
The good news in the latest incident is that all the crew members were able to exit with nothing more than burns. The liquid petroleum gas pipeline, which is owned by Chevron (NYSE:CVX), has been shut down, and products are being rerouted. However, the accident left a sheen a mile long and 75 feet wide.
Cleanup crews were on the scene with an oil-spill response organization deploying thousands of feet of containment boom, skimmers, and several response vessels. However, it's this type of scene that we don't want to see, especially in the Gulf.
The Macondo disaster has imprinted on our minds the dangers of oil and gas production, especially in how it effects our environment. If you're like me, you remember being glued to your TV watching events unfold as the Transocean (NYSE:RIG)-owned Deepwater Horizon oil rig burned and then sank. The BP (NYSE:BP)-operated Macando well then proceeded to gush oil into the Gulf for nearly three months. The disaster caused billions of dollars in damage to the Gulf Coast, and we might not know the disaster's true cost for decades. All we could do was sit, watch, and wait.
Thankfully, this latest fire in the Gulf is nothing more than a reminder of that past event. The damage will be fairly limited, and because of having gone through the Macondo incident, we now have trained response teams ready to jump into action.
As investors, we know the risks of an oil spill or other environmental disaster is one that we can't take lightly. BP investors know this all too well. The company's stock dropped by more than 50% as the disaster unfolded while shareholders went without a dividend for several months. Transocean investors didn't fare much better, as that company's investors experienced a similar drop in the value of their investment, and Transocean only recently reinstated a dividend. These risks certainly need to be kept in the back of our minds as we put our hard-earned money into an investment that could go up in flames.
That doesn't mean we shouldn't invest. All investments involve risk. The key is to find those investments with the risk factors we can live with. For some investors, it's simply enough to find a company that makes a priority of safety and protecting the environment. Others might not feel comfortable investing in a company exposed to the dangers of deepwater drilling. You need to find your balance and not let potential profits cloud your vision.