BP Oil Spill Clean-Up to Cost Nearly $5 Billion

by | May 3, 2010

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Worsening conditions at the oil spill site in the Gulf of Mexico may accelerate the flow of BP oil into rich fishing waters, which is currently leaking at a rate of about 25,000 barrels a day, reports Times Online. The oil slick may contain more than 9 million gallons, almost as much as the 11-million-gallon spill by the Exxon Valdez tanker in Alaska in 1989.

The first seabirds covered in oil have washed ashore in Louisiana, and there are concerns that the oil slick will impact endangered sea turtles, alligators and bottlenose dolphins

BP engineers in Houston, Texas, are working on at least three options to address the problem — triggering the blowout preventer, covering the wellhead with a giant steel cap to contain the leak and enable BP to pump the oil to the surface, and drilling a second well near the site of the leak, according to the article. The latter option will take three months and cost about $100 million.

Louisiana state authorities have closed down oyster beds, shrimping grounds and all commercial and recreational fishing east of the Mississippi river.

The failure of a 40-ft-tall blowout preventer has severely damaged BP’s image and wiped out more than $20 billion of the company’s stock market value, according to Times Online.

BP recently topped Tomorrow’s sustainability Value ranking among oil/gas companies. BP gained kudos for reporting stakeholder concerns and addressing its progress in meeting the concerns.

BP claims it is spending $6 million a day on the salvage effort. The spill could cost BP more than $4.6 billion in containment and clean-up expenses, reports Reuters.

The oil spill could also cost the Louisiana fishing industry about $2.5 billion and the tourism business along the Florida coast about $3 billion, according to investment firm McMahon, reports Times Online.

The Environmental Protection Agency (EPA) has established a Website, as part of the federal government’s response to the BP oil spill, which is providing information about the spill’s impact on the environment and health of nearby residents.

Additional information on the response from the U.S. Coast Guard and other responding agencies can be found at:  www.deepwaterhorizonresponse.com.

EPA also has created air monitoring stations along Plaquemines Parish on the Louisiana coast to determine how the oil spill is impacting air quality. The agency is monitoring levels of several chemicals potentially emitted by oil, including volatile organic compounds such as xylene, benzene and toluene.

The EPA’s fiscal year 2010 budget plans included $18 million for the Oil Spill Response program.

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