CNN reports on how the oil spill will damage the Gulf economy:
“As efforts to plug the ruptured well in the Gulf of Mexico continue to fall short, the stakes for the region’s economy grow ever higher. The numbers being batted around when it comes to how much the oil spill will ultimately cost BP and the local Gulf of Mexico economies are huge. $3 billion. $14 billion. One politician put it at over $100 billion.
The range is so big because two important questions remain unanswered: When will the leak be sealed, and will most of the oil wash ashore?
But there have been studies done looking at what’s broadly at stake, and the number is quite large.
The four biggest industries in the Gulf of Mexico are oil, tourism, fishing and shipping, and they account for some $234 billion in economic activity each year, according to a 2007 study done by regional scholars and published by Texas A&M University Press.
Two-thirds of that amount is in the United States, with the other third in Mexico.
If the Gulf of Mexico were a country, it would be the 29th largest economy in the world.
Oil and gasIronically, the largest chunk of that money is generated by the oil and gas industry, and they may ultimately be the ones that lose the most.
Oil and gas interests generate $124 billion or 53% of the total money, according to Jim Cato, a former economics professor at the University of Florida and one of the authors on the study.
As of Thursday, all new offshore drilling in U.S. waters in the Gulf remained closed.
Oil production from existing wells has been largely unaffected and drillers have been busying themselves with wells begun before the explosion. But the longer the ban remains intact, the harder the economic bite.
“If the moratorium is continued through June, lost revenue from shallow water drilling is estimated at $135 million,” said a letter Friday from 10 senators urging a lifting of the ban.
The ban may eventually be lifted, but how much more the oil industry will have to pay for royalties or spill prevention, plus restricted access to new drilling sites, remains to be seen.”
It is reported that the “Fabulous Fab” of GS bragged in an email to his girlfriend that GS had shorted oil rigs the day before the disaster.
We have seen the backlash against a cap and trade bill. Now we are seeing the house approve legislation to increase gas tax for a fund for cleaning up disasters such as this one. Could this be Cap and Trade under another name.
Yes GS shorted the rig and I think I know how they new, but mum’s the word