Joselyn Garcia
AP Economics
Period 3
May 22, 2010
BP Oil Spill
The devastating oil spill that took place in the Gulf of Mexico on April 22, 2010 has both long term and short term economical and ecological problems. The British Petroleum Company also known BP was at fault. Sources say that after the cement failed both the seawater and the mud mixed and the gas exploded. Unfortunately the rig sank to the bottom of the ocean. “An estimated 5,000 barrels of oil is leaking through the coast and is headed to the United States.” The oil spill will damage the sea and marine life! Because so many fishes are dying and will continue to die, the sea food business will decrease in value. In addition the oil and fish prices will rise, and the tourism around the Golf Coast will decline. The oil spill is no joking matter and we must learn from this. Hopefully the oil spill will be cleaned up in time to save not only the innocent marine life and the animals that depend on them but also our economy will not suffer to much to the point where oil is looked upon as the only solution for out resources. There are other options such as ethanol but it is a process that can not happen over night and with gradual steps we can keep moving forward!
To begin, wildlife ranging form aquatic animals such as fishes, crabs, oysters, lobsters, to birds will die off. Currently the oil spill is headed towards the Florida Keys. The oceanographer Ernst Peebles confirms this. “We saw evidence in mathematical models that the surface oil was starting to become entrained into the loop current and then there was also satellite evidence of the same thing,” said Peebles. The oil spill however is trying to be stopped. The first attempt was unsuccessful. BP tried stopping the oil spill with cement. Now they are going to pump a liquid that is “twice as dense” and will then be mixed with cement. Either way they must act quickly. Animals have no warning against this oil spill and in order to be protected they either must migrate or have the oil physically blocked. Most of the animals in the Golf Coast have already died. The oil has different chemicals which act as toxins to their bodies and were unable to resist the poisoning. This is going to be a chainlike reaction. All the animals that depend on the marine life will have to move to other locations to find food. Birds for example can not eat the intoxicated fish because then they will also die. This oil spill is going to throw off the ecosystem.
Furthermore, because the aquatic wildlife is dying so will the marine business. Big fish companies such as “Houma-based Motivatit Seafood” will suffer economically. Many of the fish already died but many of them are also poisonous for humans. There will be no consumers for seafood if the customers can not trust the merchandise. If the oil continues to travel a current might even pick up the oil and take it upward toward the eastern side of the United Sates of America. Countries like Louisiana, North and South Carolina, and Virginia will be damaged not only in the waters but also in the fishing industry. These countries economies are heavily impacted by the marine life. If I were the president of these major industries I would definitely sue the BP Company, I will try and fight for more policies against off shore drilling and would try to look for marine life elsewhere. Even though my company will suffer my options are limited and investing in other sites for fish is my only option. Although this just happened the oil spill will be felt in the long run for many, many years. Some questions come to mind. What will happen to those employees that will be laid off, what will happen to the customers who do not trust the company, what will happen to the overall individual economies? I believe the companies might even have to declare bankruptcy because they will need a bail out to pay off bills. With all of these economies crashing the United States might have to depend on the national government for money. This is not going to help the recession we are in. The oil spill is taking out a huge chunk of the economy because it is cutting out the fish industry.
In addition, after the oil spill prices for oil are expected to rise. Oil is a fossil fuel and this is limited. If you take a look at my graphs you will see that Crude Oil, Natl Gas and, Heating oil are going to rise. After any spill oil prices rise because the money that was lost in the spill is costly, there is even less oil available, and because of the clean up. My last graph indicates that in 2010 in the Gulf of Mexico approximately 1800 thousand barrels of oil are pumped out. Since the oil costs more to purchase the gas will also rise. Gas and oil are inversely related to each other. The oils business makes a lot of money mainly because the resources are limited. Many other countries like China are competing for oil and this incident will negatively affect the United States economy. I assume more safety laws against drilling in the ocean will come about. To be frank not only will the oil prices rise but also the price in fish. There is a large percent of marine life that has died and will continue to die. If people want a certain type of fish for example tilapia and that fish has gone down significantly in population then price will increase as well.
Also, the tourism in the Gulf Coast will decrease. I do not think people want to travel in oily waters where the water is brown/black with nothing to do. Mexico makes the most amount of its money because of tourism. The oil spill will have a negative effect of Mexico’s and Florida’s economy as well. If Florida’s water gets filled with the crude oil then all of the tourist will not want to get even near Miami Beach. Our Beaches sell and if they are not beautiful then our economy will go down.
In essence, Keyes theory with the multiplier effect can be seen in the BP Oil spill. Since the oil spilled the majority of the marine life died, and the fishing companies that depend on the marine life will go out of business or lose a lot of business. The National Government will have to intervene.
Citing:
ROBERTSON, CAMPBELL – KAUFMAN, LESLIE “Size of Spill in Gulf of Mexico Is Larger Than Thought.” New York Times, April 29, 2010:A14. Edition http://www.nytimes.com/2010/04/29/us/29spill.html