Gulf of Mexico oil spill makes most headlines in 2010 (3)

14:07, December 28, 2010      

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How much will the spill eventually cost the Gulf of Mexico economy?

Though figures given by specialists vary largely, one thing is sure: The cost will be staggeringly huge.

Some analysts put the cost at 3 billion dollars, some at 14 billion, and one politician even put it at over 100 billion.

The four biggest industries in the Gulf of Mexico are oil, tourism, fishing and shipping, which account for some 234 billion dollars in economic activities each year, according to a study published by Texas A &M University Press. Oil, fishing and tourism were heavily hit by the spill.

Oil and gas, the largest of the four industries which generate 124 billion or 53 percent of the total revenue, suffered from a temporary drilling moratorium imposed by the Obama administration after the outbreak of the spill.

The ban virtually brought well-drilling activity to a relative standstill over the summer, and new production wells were put on hold.

As a result, oil giant Chevron expects its Gulf production to fall as much as 10,000 barrels per day in the second half of the year. Shell predicts a similar drop and expects a further decline of 10,000 barrels per day in 2011.

Tourism, the second largest industry in the Gulf following the oil and gas industry, accounts for about 46 percent of the Gulf economy, or over 100 billion dollars a year. The impact of the spill on tourism is also notable.

In Florida, state tourism officials said they got cancellations as far as three months out.

In Mississippi, officials said cancellation rates were running at nearly 50 percent due to the spill.

Fishing, which generates 1.8 billion dollars a year, is perhaps most directly hit by the BP spill. The government closed more than 30 percent of federal waters for fishing activities, and many fishermen are out of work.

People's fears about the Gulf beaches and waters, and seafood from this region may cost tourism and fishing industries along the Gulf Coast more in the future.

The impact of the spill on the ecosystem in the Gulf of Mexico is even more unpredictable. Though the visible effects of the spill have largely disappeared, scientists are still assessing the long-term environmental damage.

An argument is already brewing over the impact, with some scientists warning the whole biological network in the Gulf of Mexico could be changed by the spill and others saying the effects could be quite small.

The BP disaster has eclipsed the 1989 Exxon Valdez spill. Exxon paid 1 billion dollars to compensate for environmental and ecological damage caused by the oil spill.

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