Question

What were some of the adverse economic outcomes, for BP and others, arising from the Deepwater Horizon accident and the suspension of all new domestic offshore drilling during the accident investigation? Cite specific examples  

Answer 1

The incident affected whole of the economy and it is regarded as worst US spill ever.The incident affected the marine ecosystem to which we don't have any hard evidence of the loss because we don't subtract impact on environment in our GDP calculations. Two days later the NOAA declared 19 percent of the Gulf to be a "no-fishing zone." The Gulf of Mexico commercial fishing industry was estimated to have lost $247 million as a result of post spill fisheries closures. One study projects that the overall impact of lost or degraded commercial  fisheries in the Gulf could be $8.7 billion by 2020, with a potential loss of 22,000 jobs.The oil spill contaminated more than 1,100 miles of coastline, at least 1,200 square miles of the deep ocean floor, and 68,000 square miles of surface water.

Almost 10 million pounds of oily residue was removed from Louisiana shorelines between June 2011 and April 7, 2013. Even after the cleanup, more than 200 miles still had this oily residue embedded in its marshlands. It killed vegetation and caused erosion and the hotel industry also showing signs of losses with difficulty in future bookings.

While Louisiana was the hardest hit, Alabama, Mississippi and Florida shorelines were also impacted.
The oil disaster affected the cellular function of the killifish, a common bait fish at the base of the food chain. It harmed the development of larger fish such as mahi-mahi and reduced the number of juvenile bluefin tuna by 20 percent.

In 2011, half of the area's bottlenose dolphins were sickened by lung disease. An NOAA study reported this type of disease is caused by "toxic exposure to oil." Almost 20 percent were so ill they weren't expected to live. BP contested the study.

Between May 2010 and November 2012, more than 1,700 sea turtles were found stranded. This is compared to 240 normally found a year. In addition, 930 dolphins and whales were discovered stranded during the period from February 2010 to April 2013. Only 20 a year are usually found in this state. To replace lost foraging habitat for ducks and other migratory birds, 79,000 acres of harvested and idle rice fields have been intentionally flooded.
JPMorgan Chase calculated that oil spill clean-up efforts actually boosted the economy in 2012. BP spent $6 billion to hire 4,000 people to clean up the spill that year. This contributed more than the $700 million lost in fishing and tourism revenues and the 3,000 jobs lost to the six-month deep-water drilling moratorium. But that didn't count long-term costs or things that aren't counted in gross domestic product such as the value of human and animal life that was lost.
Till date more than $11.6 billion has been paid to Gulf-area individuals and businesses who have suffered economic damages or medical issues as a result of the oil spill. Many claims are still pending. To date, $1.4 billion has been paid to governments for spill-related costs.