Economic Liability and Environmental Wreckage – BP’s Gulf Coast Oil Spill Disaster

Environment, Injury, Money, Politics

It’s like a lava lamp.  But while you just watched that live-stream of the largest oil spill in United States history for a few seconds, thousands more gallons of oil spewed out into the Gulf of Mexico, bringing the most conservative estimated grand total to beyond 9,030,000 gallons of oil as of June 1, 2010.  The National Oceanic and Atmospheric Administration, NOAA, estimates that 210,000 gallons (5,000 barrels) are coming from the remaining ruptures each day.

Other estimates are much, much worse.  The New York Times reported that BP disclosed to members of Congress the rate could potentially be at least ten times that number.  Last Tuesday a senior BP executive conceded that the measurement is not exact, and it is possible that up to 2,520,000 gallons (60,000 barrels) could actually be leaking each day.  By that conjecture, the total could already be 108,360,000 gallons of oil spewed into the Gulf, and counting.


So what does this mean for us?  The economic damages are staggering, and the finger-pointing has taken on the style of gesticulating with bayonettes.  The U.S. Government has named British Petroleum (BP), as the responsible party in the incident, making BP accountable for all cleanup costs resulting from the oil spill.  BP has accepted responsibility for the cleanup costs, but indicated they are not at fault as the platform was run by Transocean, who in turn says it did nothing wrong, though it owned the faulty oil rig employed by BP.  The quagmire of lawsuits that will follow this disaster is heretofore unheard of.  This could well come down to minutia such as measurements of screws installed at various point on the rig.

Then there is the cap on liability, which could possibly thrust the brunt of this particular bill into the hands of the government, and yes, my dear tax payers, into your wallets.  Specifically, the Oil Pollution Act inspired by the Exxon Valdese spill, and enacted in 1990, provides that the company that owns the oil in any spill must be responsible for all clean-up costs.  However, the act also stipulates that the amount in damages for which such companies may be responsible may be capped at $75 million, so long as the company didn’t violate any regulations leading up to the spill.  $75 million to compensate lost days for fishermen, to pay researchers and fund rehabilitation of marshes and wetlands after the oil is removed, to attempt to put back together the various fragile microcosms devastated by millions of gallons of toxic crude oil.

Not surprisingly, this cap has received quite a bit of attention in the past few weeks, and there have been several bills introduced to expand, if not eliminate it.  One other nasty little cap: even if the government is stuck with BP’s bill, their cap currently stands at about $1.5 billion for post-oil-removal retribution.  There have been proposals to raise the tax on oil so that this particular cap could be raised to $10 billion, which researchers still think may barely scratch the surface of what’s needed to even attempt “fixing” this.

Environmental Devastation

And the enormity of the sheer economic destruction merely reflects a fragment of the problem.  This oil spill has already and will continue to profoundly destroy the environment in myriad ways.  And it won’t be contained to one gulf, one coast, one society or species.  Unlike the Exxon-Valdese spill into Prince William Sound in 1989, this leak is in the Gulf of Mexico, coined a “mini-ocean” by researchers because of its loop current, a part of the much larger, much more powerful Atlantic conveyor belt.  Further, the Gulf oil spill occurred at 5,000 feet, gushing crude oil from seafloor to surface.  Thus, the reverberations of this disaster are largely hidden from sight, and the full environmental impact is not yet known.

Wildlife officials have reported more than 300 sea birds, almost 200 turtles, and 19 dolphins found dead along the Gulf Coast in the first five weeks after the spill.  Only 31 surviving birds were found and treated for oil consumption and saturation.  Other large water animals – eels, turtles, sharks, man-o-wars, and jellyfish – have been seen swimming through surface oil.  But the chemical dispersants being used to break up the oil cause it to form globules so dense that they sink to the bottom, where the oil could continue to affect bottom dwellers for decades to come.