7 May 2010 | Luca Del Buono
Biodiversity, Chemical, Food and agriculture, Water, North America, South America

 

The oil industry is facing a heavy blow in the wake of the drilling explosion on 20th April and the subsequent oil spill on 22nd April. The situation has worsened now the spill has hit some of Louisiana's coastline islands. BP and Transocean are facing massive drops in their share prices as the situation worsens since the cost of cleaning up the spill means losses in profit for both companies and the damage to the area's biodiversity mounts. It has been estimated that BP are paying around $6 million a day in clean up costs and that the overall cost of the incident to BP could exceed $14 billion. It is impossible to confirm the financial impact the incident will have on BP until the oil has stopped escaping and the real extent of the damage on the environment and economy can be established. The spill has prompted discussions about the risks of drilling and could change licensing on who can operate so that only larger companies that can afford to deal with clean up operations can drill in deep water. Oil companies are currently liable for damages up to $75 million but legislation in now looking to increase this amount to $10 billion. BP has already been accused of cost cutting after the refinery explosion in Texas and gas leaks in Alaska and the hope is that this liability regulation will mean that oil companies will enforce stricter safety procedures. Oil slicks have a catastrophic impact on the surrounding environment and the repercussions of a slick can last for years. Negligence is not a viable excuse for the damage caused to biodiversity and the industries that depend on it for survival. Another legislative move could be to drive drilling further from the shore; in response to the accident senators propose a 75mile limit instead of the 50mile limit previously suggested as part of the Climate Change Bill. This move could be vital if incidents such as this occur again. The further the spill is from shore the more time available for clean up operations to stop the oil from hitting coastlines. Although sea life would still be at risk hopefully less lasting damage would be inflicted if the slick were kept away from the hub of life closer to the shore. Recently the US government has been looking to expand its drilling capacities. The spill could potentially come between President Obama and his plans to open some previously off limit offshore areas to drilling. Obama's administration had aimed to commence new drilling to help boost the country's energy security and also in part to win Republican support. The spillage will certainly influence the decision over this move, as it will bring to the forefront the need to balance these aims with protecting the environment and the industries, such as fishing, that depend upon it. As different species, such as fish, are affected and webs of life break down the rest of the ecosystem is placed at risk and biological diversity is threatened. The variety of life that exists within habitats is vital to the economy and to the environment; the oil spill in the Gulf could have massive repercussions on the sustainability of life in the area.

On 30th April the White House declared that no drilling would be sanctioned in new areas until a review of the spill has taken place. It is probable that oil-drilling procedures will come under some tough scrutiny in the aftermath of the spillage especially with many environmental groups calling for stricter rules over offshore drilling if not a complete ban in deep water areas. Author: Rachael Bristow |Climate Action
Images: AlanVernon, Nasa Goddard Photo and Video |Flickr blog comments powered by Disqus