The Economy of the Gulf of Mexico

2 06 2010

The fact that oil has been gushing into the Gulf of Mexico for over a month now is just devastating. I know that I am not the only one that feels this way, check out this twitter trend #BPoilSpill.

When news first spread about the oil spill (44 days ago!), I didn’t realize how dire the situation was. I was just concerned about the fact that several rig workers had died in an explosion, and thought to myself, what a scary job it must be to work on an oil rig, and no wonder it is such a high paying job, seeing as it is so life threatening.

Then, day after day, the oil pumping into the Gulf continued to flow, attempt after attempt has failed and the situation has only continued to get worse.

The monetary and economic damage is estimated to be anywhere from $14 billion to $100 billion! That huge difference of $86 billion is due to the fact that it is still not certain when the oil leak will be stopped, and how much damage the oil will cause to the shores (it is expected to reach Florida within days).

According to an article on CNN, if the Gulf of Mexico were a country, it would have the 29th largest economy in the world. So, the $234 billion it produces annually through tourism, fishing, shipping and oil is all at stake. For now there is a moratorium on further drilling in the Gulf, so that will certainly stifle that portion of economic activity. Also, many people are canceling their summer trips because they are concerned with the contamination. Although fishing and shipping only accounts for about 1% of the Gulf’s economy, they are feeling the impacts of the spill already, as fishing activities have been banned in over 35% of the Gulf.

These impacts are huge, long lasting, and getting worse as 789,000 gallons of oil flow into the ocean daily…  that is roughly 550 gallons a minute! The larger the spill, the larger the area of impact, in a few short days, we may not be concerned with only the Gulf anymore, who knows where the currents could move…

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