Analysis of Environmental and Economic Damages from British Petroleum's Deepwater Horizon Oil Spill

TLDR: In this paper, the authors examined the environmental and economic damages caused by British Petroleum's Deepwater Horizon oil spill in the spring and summer of 2010, and concluded that the damages to BP, the environment, and the U.S. Gulf Coast economy are estimated to be $36.9 billion.

Abstract: This study examines the environmental and economic damages caused by British Petroleum's CBP") Deepwater Horizon oil spill in the spring and summer of 2010. (1) The process of oil exploration and production is extremely challenging, offering significant rewards that are offset by equally significant risks. The world's demand for energy is constantly growing, thereby leading to extraordinary efforts and gigantic investments by energy companies to find new supplies of oil. The $365 million Deepwater Horizon was an offshore drilling unit designed to operate in waters as deep as 8000 feet, and to drill down 30,000 feet. (2) The Deepwater Horizon was drilling an exploratory well about forty-one miles off the coast of Louisiana, when on April 20, 2010, an explosion killed eleven workers and began the release of massive amounts of oil into the Gulf. (3) The well was eventually capped on July 15. (4) Total damages to BP, the environment, and the U.S. Gulf Coast economy are estimated to be $36.9 billion. (5) The damages are attributed to three major factors: (1) human error and equipment failure at BP's Deepwater Horizon offshore drilling unit; (2) failure of the U.S. government to assign, and in some cases to permit, resources to assist with the containment of the oil spill; and (3) misinformation disseminated by the news media regarding the amount and location of oil pollution in the water and on the beaches of the Gulf of Mexico. ANALYSIS OF ENVIRONMENTAL AND ECONOMIC DAMAGES FROM BP's DEEPWATER HORIZON OIL SPILL A. Introduction In the spring and summer of 2010, the BP Deepwater Horizon oil spill dominated the world news. The event was hailed as an environmental and economic disaster. World energy needs are constantly growing, resulting in extraordinary efforts and gigantic investments by energy companies to find new supplies of oil. Oil exploration and production is well known for its tremendous challenges, working in harsh environments, and using the latest and most complex technologies. Successful operations can lead to significant rewards, but these are offset by equally significant risks. The purpose of this paper is to examine the environmental and economic damages caused by BP's Deepwater Horizon oil spill in the spring and summer of 2010. The Deepwater Horizon was an offshore drilling rig, licensed to BP by Transocean Ltd. (6) The Deepwater Horizon was a fifth-generation dynamic positioned semi-submersible oil rig. (7) The Deepwater Horizon cost $365 million to build, and was designed to operate in waters as deep as 8000 feet, and to drill down 30,000 feet. (8) The Deepwater Horizon was drilling an exploratory well about forty-one miles off the coast of Louisiana, when on April 20, 2010, an explosion and fire killed eleven workers and began the release of massive amounts of oil into the Gulf of Mexico. (9) The oil spill was ultimately contained when the well was capped on July 15, 2010. (10) Damages to BP, the environment, and the U.S. Gulf Coast economy are estimated to be $36.9 billion, as will be described in this paper. (11) The damages are ascribed to three major factors: (1) human error and equipment failure at BP's Deepwater Horizon offshore drilling unit; (2) failure of the U.S. government to assign, and in some cases to permit, resources to assist with the containment of the oil spill; and (3) misinformation disseminated by the news media regarding the amount and location of oil pollution in the water and on the beaches of the Gulf of Mexico. B. Background and Past Research People's concern for the environment can be traced back to ancient times. (12) Directions for proper care of the natural environment are found in ancient literature, such as the Bible and Qur'an. The Prophet Moses, known mostly for providing the Ten Commandments, also gave the ancient Israelites guidance regarding land management and care of animals. (13) The Prophet Mohammed offered instructions concerning water conservation in the Holy Qur'an. …