On 78th Day of BP Disaster, Surveying the Economic Damage to the Gulf
Tuesday, July 06, 2010 at 9:27 am
One frightening opening sentence from The Washington Post:
In the 77 days since oil from the ruptured Deepwater Horizon began to gush into the Gulf of Mexico, BP has skimmed or burned about 60 percent of the amount it promised regulators it could remove in a single day.
The article also notes that BP has burned off four times as much oil as it has skimmed from the ocean. All in all, BP is skimming 900 barrels a day, though the leak has pumped two million barrels into the Gulf of Mexico. And in other BP disaster news, the first tar balls have washed up on the Texas coast — meaning that pollution from the Deepwater Horizon disaster has officially reached all five Gulf states.
With the disaster raging on, the very bearish David Kotok of Cumberland Advisors, a Florida-based investment advisory firm, again took a look at the economic wreckage. “The BP spill, its aftermath, and the Obama drilling moratorium now threaten to raise [the United States] to a new all-time high level of 85 percent dependency [on foreign oil],” he writes. And soon, analysts might be able to estimate job losses from the spill, he says:
The national statistics need one more month to be disaggregated in sufficient depth to estimate job losses from the BP spill and from the Obama moratorium. Business condition reports compiled by the Atlanta and Dallas Fed regional banks will begin to discuss the economic pain in tourism, fisheries, and oil service industries. We expect this to make for continued unpleasant reading. If the Obama moratorium holds in its present form, we expect a million more job losses over the next few years to “pile on” the job losses to date. This is in addition to those originating in the loss of fisheries and tourism. Obama may be destined to run for re-election in 2012 with a broadly computed (U-6) unemployment rate of 18-20 percent….
On July 4, one-third of America’s GOM is closed to fishing. NOAA’s jurisdiction stops at the federal boundary. Thus, Mexico, Cuba or international treaty enforcement determines fishing prohibitions in the non-U.S. Gulf. The Sarasota fishmonger on Lemon St. now gets his shrimp from Sanibel. “Louisiana is dead for years,” he said. “It will not come back in my lifetime.”
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