26 May 2010

Oil Disaster in the Gulf of Mexico

The oil disaster in the Gulf of Mexico is very bad. BP (British Petroleum) estimates 5,000 barrels a day. Independent analysts estimate that the number could be ten times that much, or more.

At 5,000 barrels a day, the amount of oil would already be 4 times as much as the Exxon Valdez disaster (which happened over 20 years ago off the coast of Alaska.)

This is not to mention the possible effects of chemical dispersants, which have been used in the recent disaster to accelerate the decay of the swirling crude.

Most of the oil that is spewing from a pressurized oil deposit deep under the surface of the water (5,000 feet deep) is not reaching the surface, due to underwater currents. No one knows what the real consequences of this disaster (consequences for ecosystems and all the life in and around the waters of the gulf, and to human lives,) will be.

One thing is for sure though. This is a big deal.

This is not to mention that according to current regulatory policies BP's liability for the disaster is capped at $75 million. The total cost of the disaster could very well exceed the $1 billion mark. I am not sure if the $1 billion estimate includes the placement of monetary value on the potential loss of life (which is extreme.)

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