Trading a disaster like the historic BP oil spill can mean more than just shorting BP stock ahead of the next piece of really bad news. And, this does not mean buying call options in case BP creates a miracle and comes back from the near dead. There are lots of companies in the energy business and lots of companies selling necessary services that will profit from a second look at drilling in the deep water of the Gulf of Mexico. Trying to outguess the market with BP may or may not be profitable but investing in onshore North American energy production from coal mines and oil shale deposits could be profitable if deep wells are shut down. If the reports that many other deep wells may be at risk are true then the folks who make those deep sea robots may have a hay day making more and more submersibles to inspect for signs of danger on the ocean floor.

Every time there is news of a hurricane approaching the Gulf of Mexico the stock prices of companies that make under sea robots and in other ways support the infrastructure of drilling and extracting oil go up. Trading a disaster can mean trading these stocks every hurricane season. Now that the nightmare of a major leak has occurred the folks that make the tools to protect and service wells may go up and stay there. Knowing who has the best technology and who will prosper in a more safety conscious world may be a good way of trading a disaster or at least its aftermath. At some level this is day trading the politics of the oil spill and the likelihood of new, stronger federal regulations on offshore drilling and oil extraction.

Looking beyond the immediate issue of stopping the leak in the Gulf of Mexico it would seem than two things will happen. One is the safety issue mentioned above. The other is an end run around deep water drilling. It is to go back to land based energy sources. A set of stocks that go up every time there is trouble in the Gulf of Mexico is the companies that extract oil from oil shale deposits. The Green River Formation under lands in Wyoming, Colorado, and Utah and other US deposits hold sixty-two percent of the world’s potentially recoverable oil from shale deposits. Known world deposits of potentially usable shale contain roughly three trillion barrels of oil. This exceeds by as much as a factor of two the world’s known crude oil reserves. Coupled with US coal deposits that stand at around 275 billion tons this is a huge energy reserve. Known, recoverable coal deposits in the USA are sufficient for a quarter of a millennium at current rates of use. As the effects of oil drilling in the deep water take their effect on wildlife along the Gulf Coast, destroy habitats, and the like one way of trading a disaster may be to look inland for the future of US energy production. Where in the world the action will be in trading a disaster in the sea may be in trading stocks of companies that operate on dry land.

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