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Free «Gulf of Mexico» Essay Sample

The BP oil spill in the Gulf of Mexico is one of the devastating manmade disasters occured in the recent years. The accident had enormous financial, environmental and socioeconomic significance to the surrounding communities. The damages caused by the accident will take years to mitigate and billions of dollars.


One of BPS offshore oil rigs exploded in 20 April 2010 that left fourteen people dead and caused an untold environmental disaster. A few days after the explosion the crude oil spills started to appear on the ocean’s surface. Experts estimate that the leak was releasing more than 5000 barrels or over 800,000 liters of crude oil into the ocean every day (Read). It took 49 days to seal off the oil leak. According to the company, the explosion was caused by the release of methane gas. The fire that resulted from the explosion burned for two days before the rig finally sank into the ocean (Read). After the rig sunk, hydrocarbons started to leak into the ocean, it took several days to the company to be finally able to plug the crude oil spill. The company admitted that the accident happened when the rig crew lost control over the wells pressure.


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In addition, the wells’ blowup system failed to prevent the methane gas from exploding. The cleanup effort involved more than forty-eight thousand people, one hundred and twenty-five planes and more than six thousand and five hundred vessels. The environmental disaster that resulted from the oil spill is expected to take years and cannot be precisely estimated. The oil spill is one of the greatest disasters in the world and the largest in the Gulf of Mexico. The accident’s major effects include extensive damages to the oceans eco system and marine life. The oil rig platform was located approximately fifty miles in the Mississippi delta (Hiles). Approximately 5 million barrels of crude oil have been released into the ocean. The oil slick spread to the extensive area extending miles away from the oil rig platform location. The spill affected businesses in Florida and Louisiana which primarily depend on ocean-related income-generating activities.

The income-generating activities were tourism industry in Florida and Louisiana shrimp fishing industries. The disaster became a major media debate with the social media forums blaming the company for the disaster. It was, therefore, an ultimate publicity disaster for the publically traded company. The resulting media frenzy saw its stock prices plummet from 67 dollars per share to twenty dollars per share with the media forums predicting a takeover bid. The company is estimated to have spent more that seventeen billion dollars in the cleanup effort and had to raise a twenty billion dollar bond to cushion the company against the expected damage claims lawsuits (Hiles). The disaster had environmental, political and social economic influence on the company and on the areas surrounding the Gulf of Mexico. The resulting oil slick spillage was expected to be pushed by the ocean currents to far shores such as that of Cuba.

Damages to the environment

The most immediate result from the oil spill accident was the damage to the ocean ecosystem. The spill caused unquantifiable losses to millions of marine living organisms and plants. This shock in the ocean’s ecosystem is likely to take years to recover. The amount of biological damages caused by the disaster cannot be accurately estimated. It is also unlikely that the marine ecosystem will ever fully recover from the damages caused by the oil spill. The ocean ecosystem has one of the most delicate balances. The oil spill caused a disturbance in this delicate balance and the damages caused by the disaster may not be fully reversed (Camilli, Reddy and Yoerger). This means that the disaster permanently damages the marine eco system in the Gulf of Mexico. Its effect will be felt by future generation. To cultivate a balanced ecosystem in the ocean takes many years, the oil spillage, therefore, destroyed an ecosystem that took years to achieve. This implies that the amount of damage caused to the ocean life cannot be quantified since the oil spills extended to massive areas from the accidents location.

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The damage to the ocean ecosystem balance can also extend hundreds of miles from the affected area. This is because the marine ecosystem has an interdependent relationship that can affect the balance miles away from the directly affected areas. The oil slack may have been prevented from reaching the dry land, but its effect on the areas surrounding the ocean was still felt. The damages to the surrounding land areas can be quantified in terms of the potential revenues lost by populations around the Gulf of Mexico. Thousand lost their jobs and source of income as a result of the oil spill. In addition, the effects on the marine ecosystem imply that the fishery industry lost potential incomes and markedly reduced its capacity (Camilli, Reddy and Yoerger). These losses cannot be immediately rectified, and it will take years for the marine ecosystem to recover its balance. Therefore, in the next few years fishing in the Gulf of Mexico will be substantially reduced. This implies that some of the fishing companies and individuals will have to relocate to other areas to remain in business. This means families migrating in search of employment opportunities. The loss of marine life along the cost also means that the areas surrounding the accident locations have also lost a prime source of food. To get fish, the families and hotels used to rely on the ocean as their source of food, but after the accident they will have to look for food from other sources. This means the cost of ocean food is likely to increase to the communities in the affected areas. In addition to the loss of income sources, the surrounding communities are faced with increased costs for food expenses.

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Damages to the Company Finances

The extent of the oil spill cannot be precisely estimated but, it was estimated to cover an area of more than sixty eight thousand square miles. The financial cost  of the disaster to the BP Company was evident in their 2011 financial results. The company reported a whopping loss of more than eleven billion dollars in their first quarter income statements. In addition, the company reflected an estimated forty billion dollars in pretax charges (Hiles). The lawsuits resulting from the disaster are expected to appear in the next few years. This means that although the company has already set aside funds to cushion the resulting damages, the actual cost is unclear. Although the company accepted responsibility for the oil spill accident, the resulting media frenzy inevitably damaged BP’s public image. The company, therefore, has an immense and difficult task of winning the public court in its safety procedure. The damage for public image is evidenced in the company loss of some of its investors and customers. This means future losses in revenues and additional capital for its future expansion. In addition, the company lost some of its employees due to the accident which means that the confidence of its employees was totally shattered.

The resulting media campaign against the company damaged its public image which has taken years and billions of dollars to cultivate through their corporate social responsibility. To regain and repair their ruined public image will take years and billions of dollars. Their consumers’ confidence was also profoundly shaken by the accident. This means that BP has lost some of its loyal customers (Read). The effects of the oil spill to the company will take years to repair and is likely to cause the company to lose billions of dollars in revenues. In addition, the company was forced to shut down one of its oil drilling operations that took billions to explore, discover and set up the drilling operational. The direct consequence of the accident to the company is a loss of potential sources of income and loss of the funds to be invested in the drilling operation. The disaster also affected the company’s other operations since massive resources were required to clean up the place of disaster.

Political and Social Implication

BP is a Britain founded company, and it is among the biggest energy companies in the world. After the accident occurred, the US president publically demanded from the company to take the responsibility for that. He also ordered that BP shoulder financial costs of the accident. This means that in the eyes of the public BP was the cause of the disaster. To those whose lives were affected by the oil spill the company is the culprit. The implication of the company’s being, publically blamed for the accident is not only the loss of their safety record but also potential lawsuits by those affected by the oil spill. The accident may not have resulted in rifts between the USA and Britain but, the public condemnation of the US President to one of the major corporations in Britain may not strengthen their relationship. On a positive note, the disaster had positive effects on the USA and Cuba relations that were cold since the 1960s. USA and Cuba officials closely worked together to monitor the oil spill in order to mitigate the disaster (Read).

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The world today is also filled with political and environmental activist jumping from one cause to the next. The magnitude of the disaster caused by the oil spill and the media frenzy surrounding the issue provides the activists with a ripe cause. This means that the accident has provided the activists with an opportunity to lobby for changes in the environmental laws, safety regulations and general regulations that govern corporations. Accident and disasters have also always provided the media with hundreds of hours of coverage items. The oil spill of the Gulf of Mexico became one of the largest news items, with global coverage. Media houses provided their audiences with experts to analyze the disaster and its possible results. The oil spill disaster also became the main issue in the social media forums and public debates. As such, BP became one of the most scrutinized companies in the world. Such potential publicity can have extremely negative public image for any organization especially when the issue under scrutiny is a negative one. Conversely, BP became one of the few firms to have negative global publicity.

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Damage to the Economies of Florida and Louisiana

The principal income-generating activities in the states of Florida and Louisiana are ocean-related. Florida is a tourist hub state with most of the state incomes generated from the hotel industry. The oil spill affected the tourism industry in the state, since most of the activities that generate income for the states rely on the ocean. With the spill, ocean-related activities were temporally halted until the oil slick could be thoroughly cleaned from the ocean’s surface. In addition, the spill affected the ocean’s ecosystem wiping out marine life in the affected areas. Fishing, which is among the leading income-generating activities in both Florida and Louisiana, was temporarily halted. This implied that the people who relied on the fishing industry for their income lost their source of livelihood (Hiles). The hotel industry lost billions of expected incomes as hundreds of tourist cancelled their reservation in anticipation of environmental disaster in the two states. The communities in the two states, therefore, lost billions of dollars in expected revenues.

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The Louisiana fishery industry earns estimated 2.5 billion dollars per year. The oil spill accident caused the entire industry to shut off due to massive losses in terms of expected income and jobs. In addition, the destruction of the oceans’ ecosystem that generates this income is expected to last several years reflecting future losses to the commercial fishing industry. Experts estimate that fifty percent of the ecosystem in the Mississippi river delta was extensively destroyed. This means that it is difficult to estimate the actual losses resulting from the oil spillage to the economic activities in the delta. The destruction also caused unquantifiable social damages to the affected areas. The social damages include cultural values, sporting activities and recreation activities in the surrounding areas. The oil spill also resulted in the review of the regulations governing oil and gas drilling and explorations. A desirable result from these reviews is the imposition of stringent rules covering drilling operations and exploration activities (Read). This means that access to new drilling areas becomes hard and costly pursuant to the new safety regulations. The accident also meant that the areas where there was the oil slack could not be navigated by the vessels. The marine transport system around the Gulf of Mexico was significantly interrupted. The cost of transporting goods in the area became more expensive. Some of the bulky products can only be transported via ocean.

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Due to potential closing the transport system along the Gulf of Mexico coastline, such items become impossible to transport. Choosing alternative transport routes also meant additional millage, which vastly increased the cost of transport in the area. Florida is known worldwide for its beautiful coastline and the surrounding holiday beaches. The complete shutdown of the ocean activities meant enormous losses to the state economy (Read). The disaster was, therefore, a costly affair to the state’s economy with immense losses in its vibrant hotel industry. The water sports in the area were also temporally shutdown, denying the area residents some of their main social activities.


The BP oil spill in the Gulf of Mexico is one of the devastating manmade disasters occurred in the recent years. The accident had enormous financial, environmental and socioeconomic influence on the surrounding communities. The damages caused by the accident will take years to mitigate and billions of dollars. Major disasters whether manmade or natural often leave damages that extend to future generations. The damages resulting from the man-made BP oil spill in the Gulf of Mexico will last for generations to overcome. This is because the marine ecosystem has one of the most delicate natural balances. When the delicate balance is destroyed the effects can take years to rectify or completely fail to recover. This implies that it is possible to completely wipe out some of the marine species found in the given regions. Among the most affected regions by the accident are the states of Florida and Louisiana. The economic activities in the two states heavily rely on the ocean. The accident, therefore, significantly affected their economies causing enormous economical losses that cannot be easily estimated. The accident was also costly for the responsible company, BP. The company’s public image was largely destroyed and the cost of the cleanup exercise hugely depleted their revenues. In addition, it is expected that the company in the next few years will face compensation lawsuits. In anticipation of compensation lawsuits, BP set aside more that forty billion dollars for the expected payouts. This leads to vast chunk of company’s revenues, implying loss of shares value.


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