Up to 9.5 million liters of oil continue to spew daily into the Gulf of Mexico since BP’s Deepwater Horizon drilling rig off the coast of Louisiana exploded April 20, killing 11 workers. U.S. President Barack Obama has called the oil spill “the worst environmental disaster America has ever faced.”
The economic damage suffered by local fishermen is enormous. There is fear that ecosystems in the gulf region may be devastated. The spill may spread to Florida’s beaches and the Atlantic Ocean. The incident serves as a grave warning to countries that are addicted to oil and take the future availability of cheap oil for granted.
BP has already spent $3.12 billion in its response to the oil spill. On June 16, it agreed to pay $20 billion over four years into a fund for damage claims from the oil spill, although the fund does not cap BP’s liability for economic damage and cleanup costs, Mr. Obama insists.
Attention must be paid to the fact that the BP oil spill occurred as oil companies seek new sources of oil and natural gas under seabeds as the global demand for energy expands. The rise of emerging economies like China and India contribute significantly to this demand, but the United States alone consumes more than 20 percent of the world’s oil.
BP faces difficulty in containing the oil spill because the ruptured oil well is some 1,500 meters beneath the sea surface. With national oil companies in China and Brazil ready to develop sea-bottom oil wells, technologies to safely operate offshore oil wells and to cope with accidents must be improved and international safety regulations strengthened.
Oil-consuming countries also must diversify their energy sources and invest more in clean energy, whose development could lead to new jobs and technologies. A country like Japan must get serious about this since it relies on large amounts of oil and natural gas imports even after setting a 2020 target to reduce carbon dioxide emissions by 25 percent from 1990 levels.