BP Global Oil Spill in Gulf of Mexico & Its Affect on Local Businesses Research Paper

BP Global Oil Spill in Gulf of Mexico & Its Affect on Local Businesses - Research Paper Example Gulf of Mexico has been a home for as many as 36 Marine Protected Areas (MPA) accounting for 13 % of total MPAs throughout the nation in addition to the MPAs of the bordering States of Alabama, Florida, Louisiana, Mississippi and Texas waters totaling 75 not included in the national mainstream MPAs. Florida Keys National Marine Sanctuary and Flower Garden Sanctuary have been threatened by the oil spill which could implicate British Petroleum under National Marine Sanctuaries Act. The coral reefs have also been damaged by the oil haze extending for about 22 miles from the Deepwater Horizon site. The Act makes it liable for damaging any living or nonliving resource of national marine sanctuary affecting its conservation, recreational, ecological, historical, educational, cultural, scientific or aesthetic value. The Act provides for imposition of civil penalties as high as $ 100,000 on any person and each day of violation constituting a separate violation. Apart from civil penalties, re sponse costs, damages due to destruction, loss or injury plus interest are leviable under the Act. There are also other Acts such as federal Endangered Species Act, Marine Mammal Protection Act which can make BP liable for deaths of dolphins and sea turtles as a result.1 Background The above said blowout occurred at the BP’s Macondo well in the Gulf of Mexico resulting in the deaths of 11 workers who were on Transocean’s Deepwater Horizon Drilling rig. An estimated 4.9 million barrels of oil were spilled in the process. The wellhead was 1,500 m down below the sea water. The United States declared a moratorium on deepwater drilling until October 12, 2010. It is widely believed that the blowout could have been prevented but for the poor quality of equipment meant to prevent blowout.2 Known as the last-line of defense, the blind shear ram on the blowout preventer fixed on well head on the ocean floor would have crushed the drill pipe thus preventing a blowout. The blind s hear ram is believed to have failed for want of checks as simple as verifying whether the batteries had been sufficiently charged. BP’s investigation team is reported to have held that the well had been poorly designed. Offshore Pollution Liability Association (OPOL) where membership is voluntary provides for only a maximum liability of $ 250,000which is insufficient given the magnitude of loss resulting from the Gulf of Mexico incident. Although OPOL membership is a pre-condition for drilling license, there is no rationale for a voluntary membership. This is apt to weaken the legal control of the polluters who would claim that damages to biodiversity and ecosystem are indirect and therefore no compensation is payable.3 Marine oil spills are not unavoidable accidents. Adverse environmental conditions or any catastrophic events cannot be attributed to oil spills.4 The offshore drilling unit at the Deep Water Horizon was worth$365 million capable of operating in deep waters as low as 8000 feet and drill further down up to 30,000 feet. The drilling unit had been engaged in drilling an exploratory well 41 miles off the coast of Louisiana at the time of accident. The well from which oil spill started on April 20, 2010 was finally capped on July 15, 2010. The total damages to the company, environment and the coastal economy have been placed at $ 36.9 billion. Apart from human error and equipment failure, the U.S. Government’s failure to respond with damage control measure, media