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Gulf Oil Spill Cleanup Effort May Cost More Than Exxon Valdez Disaster

The oil company British Petroleum faces an environmental disaster in the Gulf of Mexico that is eventually expected to cost more than the Exxon Valdez tanker spill in 1989.

The thousands of tons of floating oil threaten the gulf coast have caused Alabama governor Bob Riley to declare a state of emergency, saying the oil spill posed "a serious threat to our environment and economy". His declaration followed similar actions taken by the governors of Louisiana and Florida.

The spill followed an explosion on the Deepwater Horizon offshore drilling rig, which then sank off the coast of Louisiana. Eleven rig workers are missing and presumed dead – and the explosion injured at least 17 other workers. The oil spill is estimated to cover a surface area of at least 2,500 square miles  according to estimates. The spill, which is still currently discharging more than 200,000 gallons of crude oil a day into the ocean, may result in severe damage to the Gulf of Mexico fishing and tourism industries, as well as the habitat of hundreds of species of bird and animal life. Crews are attempting to block off bays and estuaries, using anchored barriers, floating booms, and sand-filled barricades along shorelines.

According to analysts, the total costs of dealing with the huge oil slick that currently threatens the coastline and fisheries of the U.S. gulf coast could exceed the billions of dollars spent by Exxon in cleanup and legal costs.

David Axelrod, a senior advisor to President Obama, was quoted as saying that BP would pay for the clean-up, adding that no new oil drilling would be authorized unless proper safeguards were proven to be in place. President Obama has sent officials from the US Department of Justice to monitor the company's handling of the crisis.

The full scale of the legal and financial backlash facing BP is yet to be revealed. At least one lawsuit has been filed already, on behalf of a  rig worker injured in last week's blast – and there have been calls for criminal charges against the company.

A BP spokesman said it was too early to say what had gone wrong or if anyone was responsible until investigations had been completed.
Published May 12 2010, 02:44 AM by moneycoach
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