Oil spill 2010 in Gulf of Mexico: Cost for BP up to $8 billion

Monday, May 3rd, 2010 By

underwater shot of a sea turtle

The cost of the oil spill in the Gulf of Mexico 2010 is rising for BP, along with oil futures, while BP's reputation slides and sealife suffers. Flickr photo.

The 2010 oil spill in the Gulf of Mexico is worsening, and what BP will have to pay for the response is rising with no immediate end in sight. Meanwhile, the price of crude futures is rising about as fast as BP’s stock is falling. Oil futures were posting gains for the fourth straight session as traders pin their hopes on the possibility that the oil slick will muck up current levels of supply. BP stock has lost $20 billion in market value, but the company won’t need to borrow money to finance the oil spill cleanup

Oil spill in Gulf of Mexico: $8 billion hit

The oil spill in the Gulf of Mexico is causing BP stock to plummet as the disaster shows the potential to dwarf the infamous 1989 Exxon Valdez oil spill in Alaska’s Prince William Sound. The Wall Street Journal reports that BP’s stock price has lost 14 percent since the oil rig it leased exploded and sank — about $20 billion in market value. The New York Times reports that BP is also destined to take a hit on future earnings if it has to hold off on future exploration and drilling while it deals with the spill, which may cost BP at least $8 million.

Oil spill costs: Gulf of Mexico vs. Exxon Valdez

BP has said that it is spending $6 million to $7 million per day stop the oil spill in the Gulf of Mexico and limit the damage. President Obama has insisted that BP will pay for all the costs, including reimbursing federal and local governments for money spent on the response and cleanup. About 20 years ago, Exxon paid more than $3.8 billion in cleanup and damage costs, plus about $500 million in punitive damages–about $7.3 billion adjusted for inflation.

“BP certainly is more than capable of covering all of the expenses that they’ll be liable for,” said Pavel Molchanov, an analyst with Raymond James, to The New York Times. BP earned $17 billion in net income last year and is projected to earn $23 billion in 2010, according to Raymond James.

BP oil spill estimates disputed

BP’s meter is running high for the oil spill in the Gulf of Mexico.  It has been reported that it will likely take months to stop a leak BP has estimated is gushing about 200,000 gallons of oil a day into the gulf. SkyTruth, an organization that promotes environmental awareness with remote sensing and digital mapping technology, says the oil spill is leaking about 1 million gallons every day. At that rate, the oil spill in the Gulf of Mexico 2010 will top the Exxon Valdez spill by the end of the day Saturday.

BP oil spill legal maneuvers

The cost of the damage to BP’s reputation that the oil spill in the Gulf of Mexico is causing will be hard to calculate as dead animals start washing up on shore with the oil. Some recent BP legal maneuvers haven’t helped. The Mobile Press-Register reported that BP was caught circulating settlement agreements among coastal Alabamians offering residents $5,000 to give up their right to sue the company for damages from the oil spill. Alabama Attorney General Troy King told BP they should stop circulating the settlement agreements.

  • omk

    shut up you hil billies

  • Jennifer

    could this be what the bible is saying in revelation chapter 8 vere 8. The water looks like blood to me.

    • euan and kayleigh

      no its not u crazy preist

  • Vince

    of course they'll get it all back when they cause the price of oil based products to soar to an unprecedented all time high, all the while causing the earth to continue it's downward spiral of toxic ruin!, We may as well drop the damn bombs and get it over with!

  • lisa

    I am so very worried for our world right now,the crude oil was where it was for a reason,we have rape pillaged and plundered all this worlds known wealths,inside and out,the planet under our feet is being exhuasted,what will happen when the earth begins to end because of our need for greed,ONLY THEN will the human race know we have gone to far…

  • Morgan

    JUST FIX IT ALREADY! THESE COMPANIES NEED TO CUT THE BS OF ARGUING ABOUT WHOSE FAULT IT WAS AND FIX IT BEFORE 2012 BECOMES A REALITY. AT THIS RATE BY 2012 THIS LEAK HAS THE POTENTIAL TO CAUSE SERIOUS ECOLOGICAL EFFECTS DETRIMENTAL TO OUR EXISTENCE.
    FOR THE LOVE OF HUMANITY STOP ARGUING, FIX THE LEAK, CLEAN UP THE MESS – THEN ARGUE ALLLLLLLLLLLLLLLLLLL YOU WANT AFTER EVERYTHING IS FIXED. FFS.

    ALL EVERYONE SEEMS TO CARE ABOUT IS MONEY THIS AND MONEY THAT

    ANYONE EVEN STOP TO THINK FOR A SECOND THAT THIS COULD END HUMAN EXISTENCE AS WELL AS THE REST OF THE ANIMALS.

    CIRCLE OF LIFE PEOPLE – HOW DO YOU ALL PLAN TO SURVIVE WHEN THERE IS NO WATER, NO FOOD, AND NO PLACE CLEAN TO LIVE?

    AMERICA SPENDS SO MUCH TIME AND MONEY "HELPING" ALL THESE OTHER COUNTRIES – WHO IS HELPING US?

    ONE HURRICANE – ONE… GOES THROUGH THE GULF, IT WILL PICK UP THE OIL AND SPREAD IT ACROSS THE NATION. WAKE UP PEOPLE – START CLEANING IT UP AND FIXING THE PROBLEM BEFORE IT KILLS US ALL!

  • Brandi

    I think at this point everyone, especially Obama, needs to realize how much of the environment BP has destroyed. I understand gas prices are going to go up, but that is honestly the least of my worries. If by chance a hurricane does hit the coast while the oil is out there the oil WILL be picked up and distributed across the south. My whole family farms, thats our income. We help supply food to America. If we start getting oily rains here inland our crops as well as trees and all grasses and shrubs, that cows and various other animals eat, will be ruined. You can expect prices in the grocery store to skyrocket as well as our wildlife populations being slowly destroyed. We are on well water so our water will be toxic to drink.

    It really saddens me to think of the number of endanged species BP has greatly hurt, and the worst isnt really over yet. This oil spill is going to kill off so many different life forms in the oceans and we wont get to see what is destroyed until the oil is cleaned up. I dont have an answer to the problem, and I really dont think anyone does. I do know however, that Obama needs to quit going to his little parties and needs to sit down and really address the situation. This has been overlooked for far, far too long.

  • maurice bahm

    f%$# all u enviromentalists a$*holes

    • meg

      These people are concerned citizens, as we all should be. This crisis is killing off the shrimp, crab, and various species of fish that the communities along the gulf coast depend on for food and income. The animals that they are killing (because they haven't stepped up their game to increase cleanup efforts) are vital to the ecosystem, with out these various species of wild life our oceans could take a dramatic turn for the worst. The global environment relies mainly on the ocean for stability and support. Once this balance is disrupted then we are all going to pay for it, and not just with money. Maybe you should do a little thinking before you start calling people names just because they are worrying about what is happening right now and what is going to happen in the future.

  • Macy

    Okay so i was born and raised in fort walton beach fla. and my whole life i have been swimming in the gulf of mexico. i recently moved to a diff. state about 11 hours aways. which sucks :( but i visit at least twice or sometimes 3 times a year..& now what!? they is a oil spill that is considered to be the worst oil spill in the US HISTORY! OH MY. Ive been freakinnn out lately. Obama needs to step things up. The concrete dome didnt work now they are doin something else & also found another hole leakin oil, how may holes are there???? This needs to be fixed pronto! its been spilling for five weeks now. soon enough all the animals are gonna be living in straight oil and die! Florida is my hommmme. this cant be happeninngg. :(( not to mention how deselate fla. is goin to end up being..and job losses..but govt should pay those fishermen, etc. but still..this is truely goin to hurt 100% of fla.

  • Jenna Gossner

    hey it sucks they really need to step it up they are killing millons of animals due to this also my father is loosing out on money due the the oil spill he is a fisherman

    • Brianna

      That's stupid. Fisherman kill, no MURDER animals too.

      • ConcernedCitizen

        No, I think you're stupid Brianna! Do you honestly think you should even think about comparing the lethality of a fisherman's lively hood to the BP oil spill? If you do I honestly think you need to get your head checked. The fish and other sea life that fisherman catch are killed, but they are then but to use and sold at a food mart for you to take home, cook, and eventually eat. With the oil spill, it kills animals and at the same time, renders them unfit for human consumption due to the toxicity of crude oil! Would you like me to list just some of the hundreds of toxic chemicals that are found in crude? Such as: benzene, chromium, mercury, and toluene. When burned, crude oil gives off toxic chemicals such as: carbon dioxide, carbon monoxide, lead, nitrogen oxides, particulate matter, sulfur dioxide , and volatile organic compounds. So maybe after you take a look at just how poisonous crude oil is you won't be so worried about how "fisherman kill animals"!

      • gnarl

        No, I think you're stupid Brianna! – lol

      • unreal

        Fisherman provide food to the restaurants that I bet you frequent. Saying that the fisherman won't make money isn't "stupid'. What is stupid is you don't understand the cyclical nature of economic growth and suppression. In an already delicate economy, the fisherman and many other occupations that will be impacted a result of this spill, are going to be harmed, we are harmed…on many levels. Get your head out of your a* about the animals killed by fisherman….the oil spill did far more damage. And will continue to for decades. Have we all forgotten that the oceans are warming causing serious weather concerns? Oil is black…black absorbs heat, condensation, precipitation…HURRICANES and other tragic weather processes. Need I say more! BTW- If the hurricanes get worse in that region the veggies and grain crops could be all but destroyed. This would make the economic situation even worse because now farmers would be affected. I could go on and on. In my opinion, WE ARE ALL HARMED AND EXTENT HASN'T EVEN BEEN REALIZED!!!!!
        PS- thank you "concerned citizen".

  • Sherry

    The long term damage that this spill will cause to wildlife and the economy may not be known for several years to come. It's occurrence adds more fuel to the arguments for alternative fuel use.

    • http://personalmoneynetwork.com/ Steven Tarlow

      It absolutely does, Sherry. Fossil fuel use is deeply entrenched, however. I predict there will be even more catastrophes (both environmental and economic) before the shift to alternative fuels is complete.

  • Hailey Rosario

    hey no lie on sunday i went to drink some tap water and found oil substances in it… i had to go to sleep thirsty!!!

    • Steven Tarlow

      Anyone else experience this?

  • http://www.kitchenerwaterloo-realestate.com for sale by owner ki

    BP stock has lost $20 billion in market value, but the company won’t need to borrow money to finance the oil spill cleanup.Oil spill in the Gulf of Mexico is causing BP stock to plummet as the disaster shows the potential to hold off on future exploration and drilling while it deals with the spill.

    • Steven Tarlow

      Aaaaand to whom will that tremendous cost be passed on? The consumer, of course.

    • Tim

      of course they won't have to borrow, they have over 200 billion in assets. they can afford this, but i do hope they are sued for billions for this ecological disaster. "it shows potential to hold off on future exploration", when will people learn that we need to end reliance on oil oce and for all and switch to renewable.

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