BP oil disaster’s impact on the US economy Jonah Guo
Sep 08, 2014
BP oil disaster’s
impact on the
US economy
Jonah Guo
Overview
Disaster Brief
Industry Impacts
GDP impacts
Summary
"worst environmental disaster
the US has faced" -- Carol Browner,
White House energy adviser
Major impacts
Fishing
Tourism
Food
Health Care
Oil
STATE-WISE IMPACT (Business Closed) ON TOP INDUSTRIES
145,000 businesses and close to 1 million employees
Courtesy: D&B, oil spill – Impact analysis
Tourism
Over $22 billion lost revenue
from coastal tourism in the long-term
Louisiana, had an
increase in business
visitor spending, due to
increase in media
presence and
government travel
Nationally is not likely seriously affected There are other places to go:
Fishing
Impact:
Alabama (40%), Mississippi (95%),
Florida (2%), Louisiana (55%)
Louisiana , the biggest seafood supplier in US,
could lose $2.5 billion
with 27,000 employees affected.
Only accounts for 1% state GDP
On the other hand,
2/3 gulf remained open for fishing
US imports 80% of seafood
Courtesy: NOAA Fisheries Service
Food Local restaurants primarily affected
In 2011, FDA reported the seafood in the area
affected by the oil spill was safe.
Or maybe not?
Consumers still leery
Health Care
Eleven workers died
“Chemicals in crude oil and
dispersants can cause a wide range
of health effects in people and
wildlife, …damage every system in
the body,…even cancer.”
-- Wayne State University,
Gulf Oil Spill Health Hazards Report
The possible health care cost
are unpredictable and could
be HUGE
Short-term Oil price remained
low and stable • Well is exploratory, not for production
• 2/3 of US oil is imported
• 24,000
barrels per
day
(0.026%
of worldwide)
Long-term impact
Restricted policy on
offshore drilling could
harm new offshore
production.
Yet no regulations have officially been
implemented so far.
True Economic Impact
BP has fully paid Obama Administration
9 bills ($632 million total) for
response and recovery operations .
Thousands of Clean-up workers
offset losses in industry
Disclaimer Vast majority of information published
during the spill, projections were worst case scenarios.
Media/research firms
sensationalized
data
Just
like this
Logo
contest
GDP(=?) Total US GDP in 2010 was $14.66 trillion • Gulf coastal
area only
accounts for
3% of national
GDP and
employment
• Total loss
less than
0.1% GDP
Source: Bureau of Economic Analysis
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
Quarterly % Change in US GDP
Nominal GDP
Real GDP
The cost of
ecology and environment
may be
huge
Reference Logos Courtesy: Greenpeace
Greener Media , Dark Horizon: A Documentary about the Gulf Oil Disaster http://vimeo.com/12737283
D&B, “2010 Deepwater Horizon Oil Spill Report”
http://www.dnbgov.com/pdf/DNB_Gulf_Coast_Oil_Spill_Impact_Analysis.pdf (accessed June 12, 2011)
IEM, “A Study off the Economic Impact of the Deepwater Horizon Oil Spills”http://www.uflib.ufl.edu/docs/Economic
Impact Study, Part I - Full Report.pdf (accessed June 12, 2011)
TreeHugger.com, “BP Gulf Oil Spill's Impact on Tourism Estimated at 3 Years, Nearly $23
Billion”http://www.treehugger.com/files/2010/07/bp-gulf-oil-spill-impact-tourism-oxford-travel.php (accessed June 12, 2011)
CBC, “BP oil spill: 1 year later”http://www.cbc.ca/news/technology/story/2011/04/15/f-gulf-spill-one-year-later.html
(accessed June 12, 2011)
Reuters, “Factbox: Gulf oil spill impacts fisheries, wildlife, tourism”http://www.reuters.com/article/2010/05/30/us-oil-rig-
impact-factbox-idUSTRE64T23R20100530 (accessed June 12, 2011)
Business Monitor International, “United States Tourism Report Q2 2011”, Published in April, 2011
http://www.bizreportshop.com/product/bmi/United-States-Tourism-Report-Q2-2011_177900.html (accessed June 12, 2011)
Harold F. Upton, Congressional Research Service,“The Deepwater Horizon Oil Spill and the Gulf of Mexico Fishing
Industry”, published in February, 2011 http://www.fas.org/sgp/crs/misc/R41640.pdf (accessed June 12, 2011)
How Did BP Gulf Oil Spill Effect Gulf Fishing Industry Charthttp://hubpages.com/hub/Gulf-fishing (accessed June 12, 2011)
Daily Finance, “BP Oil Spill Creates a Wave of New Jobs, Takes Others
Under”http://www.dailyfinance.com/2010/06/01/oil-spill-jobs/ (accessed June 12, 2011)
Heatingoil.com, “BP Oil Spill Will Raise Oil Prices—in 2015”http://www.heatingoil.com/blog/bp-oil-spill-will-raise-oil-
prices%E2%80%94in-2015603/
Medill Reports, “Why hasn't BP's oil spill caused oil prices to
skyrocket?”http://news.medill.northwestern.edu/chicago/news.aspx?id=166157
Thank You for listening!
Queen’s MBA 2012
Canada
www.Jonahguo.com
Jonah Guo