Oil spills by the numbers

The devastating consequences of Exxon Valdez and BP gulf

The BP Gulf Coast rig explosion is a horrible human, economic, and environmental disaster. The death of 11 employees is tragic. The spill could devastate the Gulf Coast commercial and sport fishing industries for years to come. Louisiana’s seafood industry alone is worth $2 billion annually.

This is the biggest U.S. economic and environmental disaster since the Exxon Valdez oil spill in Alaska’s Prince William Sound on March 24, 1989. The key lesson from the Exxon Valdez is that the oil spill continues to have an impact today””more than two decades after the event.

The length and breadth of BP’s gulf oil spill are still unknown, but reviewing the harm and costs from the Exxon Valdez spill can give us a sense of the likely scale of the disaster. Whether the gulf spill surpasses this devastation will depend on whether and when BP can stop the flow of oil from deep on the ocean floor.

CAP’s Daniel Weiss and Susan Lyon compare the stats of the BP gulf spill with the Exxon Valdez spill in 1989 in this repost.  I’ll start with an informative video from ABC news:

An overview of the Exxon Valdez oil spill

According to the EPA report: “On March 24, 1989, shortly after midnight, the oil tanker Exxon Valdez struck Bligh Reef in Prince William Sound, Alaska, spilling more than 11 million gallons of crude oil. The spill was the largest in U.S”¦Many factors complicated the cleanup efforts following the spill. The size of the spill and its remote location, accessible only by helicopter and boat, made government and industry efforts difficult and tested existing plans for dealing with such an event.”

The spill contaminated approximately 1,300 miles of shoreline. Two hundred miles were heavily or moderately oiled (meaning the harm was obvious), and another 1,100 miles were lightly or very lightly oiled (meaning light sheen or occasional tarballs).

The BP gulf spill is likely to be even worse. There are more than 9,000 miles of shoreline in the BP gulf spill region.

Exxon Valdez oil spill costs exceeded $7 billion

According to the International Tanker Owners Pollution Federation Limited, “The most expensive oil spill in history is the EXXON VALDEZ (Alaska, 1989). Cleanup alone cost in the region of US $2.5 billion and total costs (including fines, penalties and claims settlements) have, at times been estimated at as much as US $7 billion.”

Exxon spent billions to clean up the mess, but avoided severe punishment

According to CBS, “Exxon spent more than $3.8 billion in clean up costs, fines and compensation. But in 1994, an Anchorage jury found Exxon acted recklessly and awarded victims of the spill $5 billion in punitive damages. An appeals court later cut that award in half… But after nearly 15 years in appeals, the case finally reached the U.S. Supreme Court last year. The justices reduced that $2.5 billion in punitive damages to just more than $507 million.”

ExxonMobil made $295 billion in profits from 2001-09 and more than $6 billion in the first quarter of 2010.

Exxon Valdez devastated local fishing and the tourism economy

The spill caused more than $300 million of economic harm to more than 32,000 people whose livelihoods depended on commercial fishing, according to Oceana. And tourism spending decreased by 8 percent in south central Alaska and by 35 percent in southwest Alaska in the year after the spill.

Two years following the Exxon Valdez spill, the economic losses to recreational fishing were estimated to be $31 million.

Exxon Valdez devastated the region’s wildlife

The oil spill destroyed significant wildlife. “The best estimates are: 250,000 seabirds, 2,800 sea otters, 300 harbor seals, 250 bald eagles, up to 22 killer whales, and billions of salmon and herring eggs,” according to the Exxon Valdez Oil Spill Trustee Council.

Exxon Valdez’s oily legacy

Pacific Science Director for Oceana Dr. Jeffrey Short testified in a 2009 House Committee on Natural Resources hearing that, “Despite heroic efforts involving more than 11,000 people, 2 billion dollars, and aggressive application of the most advanced technology available, only about 8 percent of the oil was ever recovered. This recovery rate is fairly typical rate for a large oil spill. About 20 percent evaporated, 50 percent contaminated beaches, and the rest floated out to the North Pacific Ocean where it formed tarballs that eventually stranded elsewhere or sank to the seafloor.”

A 2009 status report from the Exxon Valdez Oil Spill Trustee Council found that “Exxon Valdez oil persists in the environment and, in places, is nearly as toxic as it was the first few weeks after the spill. Although two decades have passed, as much as 16,000 gallons of oil persists in the Sound’s intertidal zones, continuing to poison wildlife.” [AWI, 2009]

BP gulf oil spill threatens economy and environment

This oil spill could be the worst in history.

The BP spill will go on for weeks, and it is aimed directly at the world’s most productive fishery, whose total commerical economic impact just in Louisiana is $2.4 billion according to the Louisiana Department of Wildlife and Fisheries.

Affected fishermen are already seeking compensation. “Already, a federal class-action lawsuit has been filed on behalf of two commercial shrimpers from Louisiana seeking at least $5 million in compensatory damages plus an unspecified amount of punitive damages against Transocean, BP and other companies linked to the rig blast.”

This spill could ravage the Gulf Coast’s tourism economy. According to the EPA, “The Gulf of Mexico’s shores and beaches, offering an ideal location for swimming, sun, and all water sports, supports a $20 billion tourist industry.”

And wildlife scientists and expertsforesee massive and devastating ecological impact from [the] spill,” according to HSToday.

BP made $163 billion in profits from 2001-09 and $5.6 billion in the first quarter of 2010.

Daniel J. Weiss is a Senior Fellow and Susan Lyon is a Special Assistant for Energy Policy at American Progress.

NOTE:  It is entirely possible if not likely that the spill rate is considerably higher, as discussed in the previous post.

24 Responses to Oil spills by the numbers

  1. Chad says:

    This article, in my mind, only proves that we SHOULD be drilling.

    Yes, if we were to pursue a full-on “Drill, Baby, Drill” policy for both the OCS and ANWR, it is likely that at some point in the future that this policy would result in an additional oil spill of the one we are currently going through, or the Exxon Valdez. Yes, that would be bad. But how bad? $10 billion dollars bad? Maybe $20 billion dollars bad?

    That’s bad, but finite. How does it compare to the other side of the coin? Reasonable estimates of the amount of oil available in ANWR and OCS, (several tens of billions of barrels), with the government getting a 15% royalty up front and a good fraction of both the corporate profits and worker’s salaries, easily puts the benefits *just to the government* in the ballpark of a trillion dollars, paid out in about $30 billion dollar installments for 30-40 years, and even more private-sector profit.

    Yes, spills will probably erase a year’s worth of profit. That still leaves a lot of profit, though. Environmentalists should just accept drilling, and instead insist that the revenue stream coming into government coffers from these projects be diverted for environmental protection. Just imagine what even half of this revenue stream could do! How much land could be conserved, how many superfund sites could be cleaned, how many train lines could be built, homes weatherized, or R&D projects funded! Drilling can be a win-win for the economy and the environment, as long as we are smart about it.

  2. mike roddy says:

    Good one, Sean, people will keep referring to this, especially since you understate potential damage a bit.

    Exxon paid a small fraction of just the economic cost of the Valdez spill, with no real penalty for ecological devastation. If BP is required to address the true damage of the Gulf spill, it could face bankruptcy. This would be a good thing, because these kinds of costs would then be factored into the price of oil, coal, and natural gas.

    We will need the courts to do their jobs, and actually enforce the law. This would also mean declaring fracking EPA exemptions and other obviously whorish rulings unconstitutional.

    This could happen if one of the right wing Supremes is replaced- or wakes up one day and decides to become a human being.

  3. Wit's End says:

    Maybe as it moves up the East Coast, people will become enlightened…

  4. Joe1347 says:

    But isn’t BP already trying to dodge the blame or responsibility?

    “How could the hell could this happen?” were his exact words in a CNN interview that aired Wednesday Soon enough, though, Hayward (BP CEO) then did what any self-respecting CEO trying to preserve his company’s image would do — he blamed someone else:

    The responsibility for safety on the drilling rig is Transocean. It is their rig, their equipment, their people, their systems, their safety processes.

    We will deal with these issues in the fullness of time. today we’re focusing on the response. But as I’ve said, the systems’ processes on a drilling rig are the accountability of the drilling rig company.

    We’ve also heard that haliburton was involved somehow?

  5. John McCormick says:

    OK, Chad,

    put down your pocket calculator and lets take a realistic look at your grand plan for oil companies underwriting America’s re-engineering its energy infrastructure.

    You said: the amount of oil available in ANWR and OCS, (several tens of billions of barrels)…easily puts the benefits *just to the government* in the ballpark of a trillion dollars.

    We all watch helplessly as BP and its $250 billion annual revenue flow have no certain means to stop the flow of oil or prevent contamination of the eastern Gulf Coast. Now, imagine a December day when a similar rig trapped by Arctic ice collapses and the millions of gallons of crude start flowing under thousands of square miles of a solid ice cap.

    How would response ships get to the site and how would they operate in 30 below zero conditions?

    Answer? They could not and the collapsed well would not be capped, if at all, until the ice melt-back in July and August.

    You think that oil is worth money to companies and the US Treasury because you cannot imagine an oil catastrophe destroying your plan.

    Sarah Pallin may be the energy expert you rely upon but nature and geology rule the world…greatfully, neither your nor she will.

    John McCormick

  6. Eve says:

    After the coal mine disaster, if this doesn’t wake up Americans
    (even those who dont believe that climate change is real) to the need
    to move to energy conservation and clean energy sources what will?

  7. Wit's End says:

    Surely Chad’s comment is Poe’s Law in action?

  8. mike roddy says:

    There are all kinds of flaws in Chad’s reasoning, including lack of real accounting for ecological damage. Trickle down from oil company profits is a little absurd, too.
    I did appreciate the numbers about government oil revenue, though. Never mind PAC’s- it seems that the oil companies and the government are very deep in bed together. Scary.

  9. I am not sure that spill is the right word for an actively flowing leak that is continues to gush. Spill suggests a completed state.

  10. Dave E says:

    How will an oil slick of this size effect the weather? I assume that an oil slick the size of Puerto Rico will reduce evaporation (at least of water, there will clearly be more volatile hydrocarbons in the atmosphere)–how will that effect rainfall?

  11. Jeff Huggins says:

    The Washington Walk For The World (weird, wonderful, and worthwhile), Part I

    I was in Washington recently, and it can actually be fun and rewarding. A good walk never hurt anyone.

    As it turns out, the American Petroleum Institute (API), the Associated Press’s Washington Bureau, the Union of Concerned Scientists (UCS), the American Association for the Advancement of Science (AAAS), the American Chemical Society (ACS), the U.S. Chamber of Commerce (booo!), Fox News’ Washington Bureau (yikes!), and The New York Times’ Washington Bureau (get your act together, folks!) are all within very easy walking distances of each other, and within walking distance of the White House as well.

    (Indeed, the closest of these to the White House is the U.S. Chamber of Commerce’s headquarters, which is right across a small park from the White House and within sight of it.)

    Also not far away (still within relatively easy walking distance) are the American Coal Council and the Edison Electric Institute (EEI), home of big utility-coal. Indeed, a person with a decent arm could throw a baseball from the Edison Electric Institute to the Declaration of Independence, which is housed along with other great documents in the National Archives, right across Pennsylvania Avenue (you know, the one that goes straight to the Capitol) from the EEI. (To be clear, I’m not suggesting throwing a baseball, of course: I’m just providing a sense of the short distance.)

    Also along this walking route are two organizations that many of us have a fondness for: the National Geographic Society, and the American Association of University Women.

    But back to the point:

    The API’s headquarters is at 1220 L Street, NW, if I’m reading my scribbles from that day correctly. And indeed, the Associated Press’s Washington Bureau is very close by, only a block or so away. (It ought to be rather easy for a responsible civil demonstration at the API’s headquarters to achieve some very good press coverage, don’t you think, with the AP’s Washington Bureau within shouting distance?)

    In my view, “the American Public” (a phrase they use a lot in DC) should really begin to visit these buildings and, in a civil and responsible way of course, express their views. It all makes for a nice, meaningful, and fulfilling walk. Of course, if a large group wants to do that, I assume that it would need a permit of some sort. (Maybe that’s a good idea!) But, any individual or small group can probably walk from place to place, as I did, without needing a permit or papers of any sort: After all, we’re talking about Washington DC, not Arizona!

    To be clear (and very important to note), the scientific societies on this “Washington Walk For The World” are welcoming, credible, transparent, warm, and all sorts of other good things. Bravo to them! They can give you brochures and other information on global warming, for example. They are the good guys. Stop by to see them first, and perhaps pick up some info.

    On the other hand, the other folks (the API, the U.S. Chamber of Commerce, the Edison Electric Institute, the American Coal Council) are much less inviting. In fact, they aren’t inviting or welcoming at all. Apparently, they don’t really want to see you or hear from you. But it might be helpful to stop by anyhow, just to show you care, in responsible ways of course.

    (to be continued in a forthcoming comment)



  12. Sable says:

    Chad your “accounting” doesn’t include ecosystems which will be negatively affected – some permanently, and some far removed from the spill zone. This kind of thinking is a reflection of our disease – instead, let’s learn how to live without putting a “price” on everything in sight. Peace to you.

  13. Jeff Huggins says:

    The Washington Walk For The World (weird, wonderful, and worthwhile), Part II

    (continued from the earlier comment) …

    It wasn’t quite clear to me what the news organizations were up to: probably busy appeasing advertisers, covering distractions, and presenting the science of climate change on page 10 and as if it’s still shrouded in “uncertainty” and “controversy”. They would do well to visit Edward R. Murrow Park, which is not far away.

    To the news organizations: Most of you still haven’t covered that great letter, sent by the AAAS and seventeen (in total) leading scientific organizations to the members of the U.S. Senate late last year. It’s a great, and easy to understand, and clear, and pressing, letter, signed by the leaders of all of those scientific organizations. It deserved (and still deserves) to be covered on the front page. Yes, I’m talking to you (news organization). If you lost your copy, the AAAS will be happy and quick to get you another one. They are at 1200 New York Avenue, NW. It’s an easy walk from your Washington bureaus. Or, if you don’t want to walk, let me know and I’ll e-mail you a copy of the letter. Or, instead, I would imagine that the CAP would be willing to get you one.

    Back to the point …

    Anyhow, these places all have easy-to-find addresses, of course. I’ve listed the API’s because of the present pressing topic, the oil spill. At some point, if people are interested, I can send the others to Joe or put them in a future comment. People really should do this walk. The American Public! Really! One idea is to pick up relevant scientific information and statements from the three welcoming scientific organizations (the UCS, the ACS, and the AAAS) first, and then walk over and drop off the information at the front desks of the organizations that don’t seem to “get it” yet (the API, the Chamber of Commerce, and the Edison Electric Institute). As far as I could tell, the American Coal Council’s office may just be a “front” or temporary thing? If you do the walk, don’t forget to also try to say hello at the news bureaus as well.

    It is striking, to me, that these organizations are all within walking distance of each other. Walking from one to the other, in my spare time one day, I got the feeling that many people in the industry/trade associations view this climate change problem as a sort of “game”. How is it that the API is trying to confuse the public and perpetually push petroleum, when the AAAS, the ACS, the UCS, and all of the world’s leading scientific organizations tell us that we should get off the petroleum addiction asap? If aliens were watching from outer space, they’d think that we were insane. It seems to me that there is something very fraudulent, negligent, immoral, and downright criminal in the API’s approach, or am I mistaken?

    Maybe I just have higher hopes for humankind?

    (There are also decent sandwich places, coffee shops, and a few parks along the route.)

    I’d like to thank the scientific organizations for being so hospitable, and for having information readily available in most cases: I’d like to thank the guy at the UCS who was happy to have a great discussion with me. I’d like to thank the receptionist and lady at the ACS who was happy to make a copy of the latest ACS Position Statement on Global Climate Change for me, which I then delivered to the front desk of the API (in case they hadn’t seen it!). And I’d like to thank the receptionist and people at the AAAS who were happy to send me a copy of their big letter, which was in my “in box” the day I returned to California. If people actually start doing this walk, and you get more visitors, it might be of great help to have simple, hard-hitting, no-nonsense, brochures about your views on climate change, ready to go at the front desk. What information would you like to provide to the public, for the public to know and for some people to even drop off at the API, the COC, and the coal organizations? How can the public help get the vital message through?

    It’s easy to begin from a number of Metro stations in the area. One of the most convenient is the Farragut West station, but several others (including Metro Center) would work great too. If you happen to begin at Farragut West, a great place to have a breakfast or snack is “Devon & Blakely”, at 919 18th Street NW, just steps from the Farragut West station.

    Also along the route is the Martin Luther King Jr. library. Of course, he spoke of the “fierce urgency of now”.

    Be Well,


  14. Mike #22 says:

    Salazar said today on CNN that the worst case scenario is 100,000 barrels per day if the wellhead goes.

    The volatiles in the crude oil are evaporating and moving with the wind. Smells like a “gas station”. The EPA is testing for volatile organic compouds, VOCs, and seeing them on shore already, and the smell reached Florida for some time last week.

    Rough calculation, if 10% of 100,000 bpd vaporizes the result is 50 cubic miles of stinky air at 1 ppm per day. It wouldn’t be uniform though, and some areas down wind from the spill could see a lot of VOCs. How fast this could develop is completely unclear from the dribbles of information we are getting.

    That much oil, 100,000 bpd, 525,000 cubic feet per day, could also cause large flammable accumulations on shore. The fires and resulting pollution could be intense.

  15. sarah says:

    Some impressive (and depressing) photos here. The photo of the actual leaky pipe (picture #9) doesn’t really look so bad, but what is the pipe diameter, anyone know?
    The next photo shows a robot arm trying to turn a valve.

    This is indeed a tragedy. Oil on the shore will impact the ecosystems for decades. And most of it will STILL eventually become CO2 which will affect our climate for 1000 years.

  16. Chad says:

    1. mike roddy says:
    May 2, 2010 at 12:29 pm
    There are all kinds of flaws in Chad’s reasoning, including lack of real accounting for ecological damage. Trickle down from oil company profits is a little absurd, too.

    Mike, a claim like this is usually followed by some sort of evidence. What part of my estimates do you dispute? Do you really think they are off by orders of magnitude, which would be required for the costs to exceed the benefits. I would say the same thing to Sable, who gave essentially the same response later.

    The damages from this incident are finite, around of a few tens of billions. That’s including “ecological damage”, to the extent you can put a price on it. Actually, I am using some high-end estimates, much higher than what the EPA refers to here.

    Remember, my alternative plan also prevents or mitigates “ecological damage”, so you just have to deal with the inherent fuzziness in weighing different things against one another. It simply doesn’t make sense to give up a trillion dollars in revenue in order to prevent the of 0-2 oil spills that will do a few tens of billions of damage each.

  17. Andy says:

    Chad: you are mistaken on so many levels.

    FYI – an extremely tepid version of your plan has been tried and even that failed. The small portion of offshore oil revenues the federal government takes in that is supposed to be devoted to land conservation (the Land and Water Conservation Act) has never been fully funded. Congress has failed to appropriate the supposedly dedicated funds. Why? Largely because the Republican Party since Reagan believes buying private land to bring it into the public domain is evil. Tom Delay used to spout scripture when denouncing (and refusing) federal funds from the LWCA at local public meetings (something like man is supposed to remake the world into a garden of eden by first getting rid of nature). With the continued failure of the LWCA, Sportsmen and environmental groups cooperated for years to carefully build a coalition to fund conservation using offshore revenue in an effort called CARA (Conservation and Restoration Act I think – it’s been too long); when this failed they tried CIAP (Coastal Impact Assistance Promgram AKA CARA-lite). This has partially succeeded in bringing a small fraction of offshore revenues to conservation though states like mine (Texas) has insisted on spending its share on roads, dikes, etc. not what most folks would call land conservation. It has capped a lot of wells too; but that is something the oil industry should have been doing on its own with an excise tax.

    Further, let’s assume the real cost of oil spills would be the cost of returning the natural systems back to the state they were in before the spill. Haven’t you ever been the least bit curious as to why Exxon hasn’t finished cleaning Prince William Sound? Why do those Alaska fishermen still not have a thriving herring or pink salmon fishery? Why are birds still being oiled? The reason is that the cost of doing this would essentially be infinite. It can’t be done. Likewise the cost of fully restoring the Gulf of Mexico wetlands directly lost to the oil and gas industry would far exceed the entire value of all oil ever produced.

  18. Anonymous says:

    Chad, I’ll assume you understand how this spill could conceivably alter ecosystems, both terrestrial and marine, far from the spill site, and perhaps irrevocably. Never mind the direct impact on where ever the oil ends up.

    What I question is your claim that this event is proof that we should be drilling (for oil). There is a moral dimension here you seem to be overlooking, that place where bean counting is irrelevant. You imply that the ends justify the means, yet the means, how we do anything, are everything in life. The disease of our culture is that we do not see this.

    Albert Einstein said it well: “The significant problems we have cannot be solved at the same level of thinking with which we created them.”

    Peace to you.

  19. Sable says:

    Signing my post (#17)

  20. Chad says:

    Sable, imagine environementalist are able to use this incident to leverage half of the future revenue streams from drilling towards environmental causes. That would be something like $15 billion dollars per yer (inflation adjusted) for about 40 years.

    Do you know how much $15 billion is? It would roughly double what we currently spend directly on environmental issues (cleanup, R&D, the park system, etc). That’s a lot. That’s important.

    You seem to be claiming that there is some “moral dimension” that is different (because you obviously lose wildly quantitatively), but I don’t see it. How is preventing approximately one oil spill more “moral” that doubling our park system, doubling energy R&D, massively expanding the EPA, doubling superfund cleanups, etc?

  21. Mike #22 says:

    Chad’s math leaves out the taxpayer’s subsidies to the oil industries of around eight dollars a gallon (google “true cost of oil”). A trillion dollars of “royalty” payments costs the taxpayer 8 trillion.

  22. Mike #22 says:

    “Millions of our songbirds are crossing the Gulf now, and will arrive Stateside perilously weak and undernourished from their journey. The smoke may well compound their precarious situation and potentially lead to birds failing to make it to shore, or arriving so weakened that they are unable to survive,” said Fenwick.

  23. Fred Heutte says:

    The numbers involved here per year are truly staggering:

    $292 million — market value of oil from one moderate-sized 10,000 bbl/day well (at $80/bbl) similar to the one drilled for BP by the Deepwater Horizon

    $2 billion — market value of coastal commercial fishery in Louisiana and adjoining states

    $34 billion — market value of annual Federal Offshore Gulf oil production (422 million bbl/yr in 2008, latest available data from EIA; offshore GOM probably already peaked in 2003 at 569 million bbl/yr, by the way)

    $40 billion — claimed regional economic contribution of Gulf sports fisheries, according to the Sportsfishing Association

    ??? — economic contribution of Gulf and Florida west coast tourism, heavily dependent on unspoiled beaches and marshes, clean air

  24. Sable says:

    Mike#22 thanks for the link. This is an apt illustration of how this calamity, and ironically one of the mitigation efforts, could have damaging consequences far from the Gulf itself. Many of the birds who make landfall on the Gulf coast every spring go on to breeding grounds in the northern forests, where they are voracious predators of forest pests, like the Spruce Budworm.