Gulf Disaster and its Long Term Effects

What a disaster.  Deepwater Horizon, the deep sea oil rig, estimated to be worth  more than $500M, caught fire and went to the bottom of the gulf in flames. Eleven people are reported missing. Seventeen people were reported injured, four of them critically.  A total of 126 workers were reported aboard the rig at the time of the incident.

Most of the coastal waters of the Gulf  States  have become a  toxic cesspool.  It has been more than 6 weeks and the crude continues to  contaminate the waters of the gulf.   The crude has started to reach the beautiful beaches of the area already. This crude is also expected to reach to the Atlantic because of the  usual weather patterns and water currents.  It is also expected to contaminate  Cuban waters and beaches. It is destroying the eco system all around in these states. The marine life is at risk for years to come, because of the toxicity of the dispersants used to break the crude. The crude leakage estimates are over a wide range. Worst case 4 Million  plus gallons to conservative half a million plus gallons per day.

BP was caught off  guard to cope with the disaster. Their  existing deep water well containment procedures either  did not work or were not sufficiently adequate to provide any emergency shut off.  It could not handle the current situation and shut off the well promptly.  In the aftermath of the event they have been experimenting different containment strategies. The initial method of putting a dome on the gusher did not work for various technical reasons. They have been trying different methods. The one called “The Top Kill”  did not produce the desired results either.  Now they have placed a modified containment dome over the top of the gushing area which seems to be partly successful. Their  estimates are that this methodology is capturing almost half of the crude. They are further refining the containment procedures to increase the capture volume, while drilling two relief wells to reduce the pressure on the current one. The relief wells are expected to come online in early August.  Assuming the well is capped by then,  it would have pumped close to 50M gallons of the crude, if not more,  into the gulf.

The cleanup of this crude, which produces  “tar ball” , on the beaches and the reefs of the gulf coast will be a monumental task.  Though some of it is being dispersed using dipersal agents,  it is not without problem. The interaction between dispersal agents and the crude creates toxic materials harmful for marine life. The marine life and hence the commercial fishing business will take a long time to recover. The tourism and the hospitality industry will suffer for a long time as well.

President Obama was recently briefed by the Coast Guard Adm. Thad Allen, the federal government’s response manager for the   disaster in the gulf. He was cautiously optimistic about the progress to contain this mess. In response to a reporter’s question at White House Briefing he agreed that it may take years to restore the environment and the habitat.

AndIThoughT© …….. about….. all the states affected by this terrible event.  The state  , county and city governments  that will have another headache to confront with besides unemployment due to the current state of economy. The shortfalls in their budgets. With no business , no sales taxes,  no employees  paying state taxes  ……..

AndIWondeR© ………………….. in the final analysis  ……..  if BP will really come thru to rescue and make all these entities and individuals whole as they have promised , and not nickle and dime people ……………………..  Well, they have the money  ……….  They have been making tons of it ….. !!!!

“The company announced that underlying replacement cost profit for the fourth quarter of 2009, before non-operating items and fair value accounting effects, was $4.4 billion – an increase of 70 per cent on the same period in 2008. Full year replacement cost profit for 2009 was $14 billion, down 45 per cent on the record full year profit of 2008, mainly reflecting the weaker market environment of lower average oil and gas prices and depressed refining margins.

or there will be no money left after all the bonuses have been disbursed to all the executives ………….