A number of former and current clients have called our offices about the recent oil spill in the Gulf of Mexico. They have expressed fear about damages to their business and property, as well as actions that they can take take to protect themselves from the consequences of this disaster. We have already been retained for business losses as customers of clients are cancelling plans for travel to the Gulf Coast. If something does not change soon, this disaster will likely be much worse than most hurricanes. It has the potential to be worse than any of them.
Oil spills, clean up and recovery are topics of discussion at my family gatherings. My father helped start the Marine Spill Response Corporation operations in the Gulf Coast at Lake Charles, Louisiana. After his retirement there, he has taught oil spill clean up and recovery for the State of Louisiana and throughout the Gulf Coast. I am certain that many of the people trying their hardest to stop the spread of this spill have been taught by him. There is only so much that can be done if the flow of oil is not contained.
Underwater robots failed to activate a cutoff valve on the ocean floor to stop the leak. BP is hoping a plan to cover the well with a steel cap and capture the leaking oil will avert an environmental disaster. But that will take four weeks, and by then more than 150,000 barrels could have spilled. If the steel cap does not work, BP will have to rely on stemming the flow by drilling a relief well, which would take two to three months. If it takes that long, the spill could be even larger than the 258,000 barrels leaked in 1989 by the Exxon Valdez.
Estimates of the damage are already in the billions. In BP Vows to Pay All Gulf Coast Oil Spill Damage Claims, the National Law Journal reported:
BP Plc will compensate all those affected by an oil spill from one of its wells in the Gulf of Mexico, its Chief Executive said, accepting the disaster could hit plans to open new areas off the U.S. coast to drilling.
"We are taking full responsibility for the spill and we will clean it up and where people can present legitimate claims for damages we will honour them. We are going to be very, very aggressive in all of that," Tony Hayward told Reuters in an interview on Friday.
The cost to the fishing industry in Louisiana could be $2.5 billion while the impact on tourism along Florida’s Paradise coast could be $3 billion, Neil McMahon, analyst at investment firm Bernstein, said in a research note on Friday.
On the way to Houston on Thursday morning, I was amazed to look out the window of our plane and see the size of the oil spill. As far as I could see, oil was there. This will not end anytime soon. There will be significant claims, losses and litigation involving this tragic event.