With Three-Quarters Of Oil Spill Dissapated, BP Liability May Fall

August 4, 2010 by Douglas A. McIntyre

A new government study done for the NOAA shows that only 26% of the oil spilled into the Gulf by the Deepwater Horizon catastrophe still poses a threat to shorelines and wildlife. The balance of the crude has dissipated or collected through efforts of BP and the federal government.

The New York Times, commenting on the report,  argues that the balance of the oil is also not likely to cause catastrophic problems. “Most is light sheen at the ocean surface or in a dispersed from below the surface, and federal scientists believe that it is breaking down rapidly in both places.” Some of the crude has already washed ashore. Dispersants have also been effective in negating the effects of the spill.The data is extremely good news for BP. It faces up to $20 billion in fines under the federal Clean Air and Clean Water Acts. The company has already begun to put $20 billion into an escrow fund to cover clean-up and liability costs. The UK-based company says its direct costs for the clean-up are more than $3 billion.

BP’s liabilities are almost certainly tied to the extent to which the slick has cut into the revenue of businesses around the Gulf and the cost to the property that rings the Gulf in the area effected by the spill. Early government models showed that the leak, which released as much as 60,000 barrels a day, could make  its way around the tip of Florida near the Keys and up the East Coast. That would have added immeasurably to BP’s problems. Now, it seems that the coast of southwest Florida may not be damaged at all.

It takes years to resolve disasters which affect the environment over hundreds of thousands of square miles.  That’s because initial forecasts often turn out to be worse than reality.

Douglas A. McIntyre