The BP Gulf Coast rig explosion is a horrible human, economic, and environmental disaster. The death of 11 employees is tragic. The spill could devastate the Gulf Coast commercial and sport fishing industries for years to come. Louisiana’s seafood industry alone is worth $2 billion annually.
This is the biggest U.S. economic and environmental disaster since the Exxon Valdez oil spill in Alaska’s Prince William Sound on March 24, 1989. The key lesson from the Exxon Valdez is that the oil spill continues to have an impact today—more than two decades after the event.
The length and breadth of BP’s gulf oil spill are still unknown, but reviewing the harm and costs from the Exxon Valdez spill can give us a sense of the likely scale of the disaster. Whether the gulf spill surpasses this devastation will depend on whether and when BP can stop the flow of oil from deep on the ocean floor.
An overview of the Exxon Valdez oil spill
According to the EPA report: “On March 24, 1989, shortly after midnight, the oil tanker Exxon Valdez struck Bligh Reef in Prince William Sound, Alaska, spilling more than 11 million gallons of crude oil. The spill was the largest in U.S…Many factors complicated the cleanup efforts following the spill. The size of the spill and its remote location, accessible only by helicopter and boat, made government and industry efforts difficult and tested existing plans for dealing with such an event.”
The spill contaminated approximately 1,300 miles of shoreline. Two hundred miles were heavily or moderately oiled (meaning the harm was obvious), and another 1,100 miles were lightly or very lightly oiled (meaning light sheen or occasional tarballs).
The BP gulf spill is likely to be even worse. There are more than 9,000 miles of shoreline in the BP gulf spill region.
Exxon Valdez oil spill costs exceeded $7 billion
According to the International Tanker Owners Pollution Federation Limited, “The most expensive oil spill in history is the EXXON VALDEZ (Alaska, 1989). Cleanup alone cost in the region of US $2.5 billion and total costs (including fines, penalties and claims settlements) have, at times been estimated at as much as US $7 billion.”
Exxon spent billions to clean up the mess, but avoided severe punishment
According to CBS, “Exxon spent more than $3.8 billion in clean up costs, fines and compensation. But in 1994, an Anchorage jury found Exxon acted recklessly and awarded victims of the spill $5 billion in punitive damages. An appeals court later cut that award in half… But after nearly 15 years in appeals, the case finally reached the U.S. Supreme Court last year. The justices reduced that $2.5 billion in punitive damages to just more than $507 million.”
ExxonMobil made $295 billion in profits from 2001-09 and more than $6 million in the first quarter of 2010.
Exxon Valdez devastated local fishing and the tourism economy
The spill caused more than $300 million of economic harm to more than 32,000 people whose livelihoods depended on commercial fishing, according to Oceana. And tourism spending decreased by 8 percent in south central Alaska and by 35 percent in southwest Alaska in the year after the spill.
Two years following the Exxon Valdez spill, the economic losses to recreational fishing were estimated to be $31 million.
Exxon Valdez devastated the region’s wildlife
The oil spill destroyed significant wildlife. “The best estimates are: 250,000 seabirds, 2,800 sea otters, 300 harbor seals, 250 bald eagles, up to 22 killer whales, and billions of salmon and herring eggs,” according to the Exxon Valdez Oil Spill Trustee Council.
Exxon Valdez’s oily legacy
Pacific Science Director for Oceana Dr. Jeffrey Short testified in a 2009 House Committee on Natural Resources hearing that, “Despite heroic efforts involving more than 11,000 people, 2 billion dollars, and aggressive application of the most advanced technology available, only about 8 percent of the oil was ever recovered. This recovery rate is fairly typical rate for a large oil spill. About 20 percent evaporated, 50 percent contaminated beaches, and the rest floated out to the North Pacific Ocean where it formed tarballs that eventually stranded elsewhere or sank to the seafloor.”
A 2009 status report from the Exxon Valdez Oil Spill Trustee Council found that “Exxon Valdez oil persists in the environment and, in places, is nearly as toxic as it was the first few weeks after the spill. Although two decades have passed, as much as 16,000 gallons of oil persists in the Sound’s intertidal zones, continuing to poison wildlife.” [AWI, 2009]
BP gulf oil spill threatens economy and environment
This oil spill could be the worst in history.
MSNBC reports that the BP spill threatens a major Louisiana industry—commercial fishing. “Experts said the spill could also destroy the livelihood of commercial fishermen and shrimp catchers and impact recreational fishermen. According to the Louisiana Department of Wildlife and Fisheries, the state’s fishing industry is worth $265 billion at dockside and has a total economic impact of $2.3 trillion.”
Affected fishermen are already seeking compensation. “Already, a federal class-action lawsuit has been filed on behalf of two commercial shrimpers from Louisiana seeking at least $5 million in compensatory damages plus an unspecified amount of punitive damages against Transocean, BP and other companies linked to the rig blast.”
This spill could ravage the Gulf Coast’s tourism economy. According to the EPA, “The Gulf of Mexico’s shores and beaches, offering an ideal location for swimming, sun, and all water sports, supports a $20 billion tourist industry.”
And wildlife scientists and experts “foresee massive and devastating ecological impact from [the] spill,” according to HSToday.
BP made $163 billion in profits from 2001-09 and $5.6 billion in the first quarter of 2010.
Daniel J. Weiss is a Senior Fellow and Susan Lyon is a Special Assistant for Energy Policy at American Progress.