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May 7, 2010

The Cost of America’s Oil Addiction. ~ Joe Magee

Spill, Baby, Spill” has peppered the headlines for weeks now. The disaster in the Gulf of Mexico is still unresolved with workers still missing and oil still spilling. An estimated 210,000 gallons of oil are spewing 50 miles off the Louisiana shore. The oil slick is now as large as the state of Delaware, and growing daily with a leak rate equivalent to 24 tanker trucks dumping crude.

On April 20th a Transocean oil rig, which was under contract by British Petroleum, exploded before sinking into the gulf two days later.  The deepwater well was unequipped with a $500,000 remote control shut-off valve that might have prevented this catastrophe.

The spill is now a ticking time bomb and a fix is still weeks away.  As soon as the leak hit the ocean it began impacting marine life. The regions coastal animals and open-ocean sea life total over 400 species, all of which are threatened by the spill. The intricate wetlands of the Louisiana coastline further compound the urgency. Some of the first crude-covered animals have already been discovered.

Motor oil marinated shrimp?

This tragedy not only threatens the ecology of the region but numerous economic sectors. The surrounding states rely on the Gulf for fishing and tourism to support their local economies. Louisiana alone accounts for a $3 billion fishing industry that produces 1/3 of the seafood consumed in the United States.

From Galveston, Texas to Panama City, Florida restaurant owners and hotel operators are already feeling the anxiety of travelers. Concerned by summer vacations on black tar beaches, travelers are double-checking their cancellation policies. The five states that border the Gulf are closely monitoring the ever-changing weather conditions, hoping for the best. It is still too early to tell, but the financial ramifications on a $100 billion-a-year tourism industry in the Gulf of Mexico could be devastating.

The cost to clean up

BP is spending $6 billion a day on clean-up efforts and if proposed legislation is not passed, taxpayers could be handed the majority of the clean up bill. Previous regulations capped the oil company’s liability at a whopping $75 million, less than 13% of BP’s first quarter profits.
Due to the close proximity to the US mainland, the spill has the potential to be far worse than the Exxon Valdez incident. However unlike the 1989 Alaskan spill, let’s hope that it does not take 19 years for a ruling on damages and liability.

There is no doubt that the oil companies are on the hook for this disaster. Though like any other business, they are just trying to supply a product to meet demand. Oil companies cannot produce crude fast enough to sell us oil. Household items, electronics, and fuel for our cars are all petroleum-based products that permeate into every aspect of our lives. Soon we might even be eating it!

Joe is the co-founder of the first green lifestyle certification, PineMark. A life long nature lover and avid surfer, Joe has had an appreciation of the environment since he was very young. After finishing his MBA and quitting a job at a Fortune 500 company, he helped create PineMark to educate and reward individuals for reducing their ecological impact. Joe loves sharing his passion for the environment blogging at PineMark. You can also follow Joe on Twitter @PineMark or @GreenSurf.

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