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NEWS
Researchers Determine Oil Spill Did $17.2 Billion In Damage
May 10, 2017

Following a six-year study, commissioned by the U.S. National Oceanic and Atmospheric Administration (NOAA), of the impact of the largest oil spill in U.S. history, a team of 18 researchers has determined that the 2010 BP Deepwater Horizon oil spill did $17.2 billion in damage to the natural resources in the Gulf of Mexico. The study, published in a recent issue of the journal Science, represents the first comprehensive appraisal of the financial value of the natural resources damaged by the 134-million-gallon spill.


The first-ever comprehensive appraisal of the financial impact on natural resources impacted by the BP Deepwater Horizon oil spill found that it did $17.2 billion in damage. Photo courtesy of U.S. Coast Guard.

According to Kevin Boyle, a professor of agricultural and applied economics in the Virginia Tech College of Agriculture and Life Science and one of the authors on the paper, “This is proof that our natural resources have an immense monetary value to citizens of the United States who visit the Gulf and to those who simply care that this valuable resource is not damaged.”

The scientists developed a survey to put a dollar value on the natural resources damaged by the BP Deepwater spill by determining household willingness to pay for measures that would prevent similar damages should a spill of the same magnitude happen in the future. Survey information included descriptions of damaged beaches, marshes, animals, fish, and coral.

On top of estimating the impact of the spill, the $17.2 billion represents the benefits to the public to protect against damages that could result from a future oil spill in the Gulf of a similar magnitude.

To estimate Gulf Coast resource values, researchers created a scenario in which people were told that they could have a role in mitigating future damages by effectively paying for a prevention program. Final analysis showed that the average household was willing to pay $153 for a prevention program. This rate was then multiplied by the number of households sampled to get the final valuation of $17.2 billion.

“The results were eye-opening in that we could tell how much people really value marine resources and ecosystems,” said Prof. Boyle. “And even more meaningful because we did additional analysis that proved the legitimacy of oft-criticized values for environmental resources.”

“Our estimate can guide policy makers and the oil industry in determining not only how much should be spent on restoration efforts for the Deepwater spill, but also how much should be invested to protect against damages that could result from future oil spills,” Prof. Boyle explained. “People value our natural resources, so it’s worth taking major actions to prevent future catastrophes and correct past mistakes.”


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