Category: Oil Spill

What is a ‘Cartel?’ A cartel is an organization created from a formal agreement between a group of producers of a good or service to regulate supply in an effort to regulate or manipulate prices. In other words, a cartel is a collection of otherwise independent businesses or countries that act together as if they were a single producer and thus are able to fix prices for the goods they produce and the services they render without competition. A cartel has less command over an industry than a monopoly — a situation where a single group or company owns all or nearly all of a given product or service’s market. Some cartels are formed to influence the price of legally traded goods and services, while others exist in illegal industries, such as drugs. In the United States, virtually all cartels, regardless of their line of business, are illegal by virtue of American anti-trust laws. Cartels have a negative effect for consumers because their existence results in higher prices and restricted supply.

The Organization for Economic Cooperation and Development (OECD) has made the detection and prosecution of cartels one of its priority policy objectives. In so doing, it has identified four major categories that define how cartels conduct themselves: price fixing, output restrictions, market allocation and bid rigging (the submission of collusive tenders). The World’s Biggest Cartel The Organisation of Petroleum Exporting Countries (OPEC) is the world’s largest cartel. It is a grouping of 14 oilproducing countries whose mission is to coordinate and unify the petroleum policies of its member countries and ensure the stabilization of oil markets. OPEC’s activities are legal because it is protected by U.S. foreign trade laws. Amid controversy in the mid-2000s, concerns over retaliation and potential negative effects on U.S. businesses led to the blocking of the U.S. Congress attempt to penalize OPEC as an illegal cartel. Despite the fact that OPEC is considered by most to be a cartel, members of OPEC have maintained it is not a cartel at all but rather an international organization with a legal, permanent and necessary mission.

OPEC’s activities are focused on oil, a commodity that has contributed more than any other form of energy to economic development around the world, over the past century and a half. Analysts agree that hydrocarbons will remain the most important source of energy for decades to come. I believe that OPEC’s actions over the present difficult period provide a vivid demonstration of the important role the Organization plays in stabilizing the volatile oil market, a role that it will continue to play well into the future. The obvious conclusion from what I have just said is that OPEC is not a cartel, as some people still insist on calling us. Instead, it is an international organization of sovereign states, with a legitimate, permanent and essential mission for both its Member Countries and mankind generally.

Organization of the Petroleum Exporting Countries is an intergovernmental organization of 14 nations as of May 2017, founded in 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, Venezuela), and headquartered since 1965 in Vienna. As of 2016, the 14 countries accounted for an estimated 44% of global oil production and 73% of the world’s”proven oil reserves, giving OPEC a major influence on global oil prices that were previously determined by American-dominated multinational oil companies. As of May 2017, OPEC’s members are Algeria, Angola, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia (the de facto leader), United Arab Emirates, and Venezuela, while Indonesia is a former member. Two-thirds of OPEC’s oil production and reserves are in its six Middle Eastern countries that surround the oil-rich Persian Gulf. OPEC was based on principles which are as valid today as they were then — despite the vast number of changes we have since experienced in technology, economics, politics and many other aspects of our lives. These principles revolve around the coordination of our Member Countries’ oil policies, so as: to ensure price stability in the world oil market; to obtain a stable revenue for oil-producing nations; and to provide a regular, reliable, efficient and economic supply to consuming countries and a fair return to investors in the oil industry. Commitment to these principles was reaffirmed as recently as the year 2000, in the Solemn Declaration that concluded the Second Summit of Heads of State and Government of OPEC Member Countries, which was held in Caracas, Venezuela.

Moreover, we are dedicated to the ideals of last year’s World Summit in Johannesburg, to ensure that energy reaches all people and all nations, rich and poor alike, as an essential element in the sustainable development of mankind. OPEC’s mission is not restricted by time or circumstance, however. It is, instead, a permanent one, which is centred on petroleum, but broadens out into the energy industry generally. It involves close cooperation and exchanges with other leading, influential parties in the sector at national and international levels. Oil market stability OPEC developed its price band mechanism at the 109th Meeting of its Conference in March 2000. At that time, it identified US $22–28 a barrel as the price range that balances the needs of consumers and producers. The success of the mechanism can be judged from the fact that, since its inception, the OPEC Reference Basket has averaged $25.30/b, which is slightly above the centre of the band. The price band mechanism has faced a stern test over the past seven months, in the light of the supply disruptions in Venezuela, Iraq and, to a lesser extent, Nigeria. The Venezuelan oil industry strike, which began last December and extended into January, withdrew a startling 2.8 million barrels a day from the market. This pushed prices to more than $3/b above the band. In response, OPEC rapidly organized an Extraordinary Meeting of its Conference, which raised the OPEC-10 production ceiling by 1.5 mb/d and restored some balance to a potentially destabilizing market. Oil and cooperation Cooperation is central to OPEC’s thinking.

Recently, eight non-OPEC oil-producing nations have become observers of our Organization’s activities and this includes attendance at our Ministerial Conferences. Before these Conferences, we hold meetings to exchange ideas among our Ministers and the representatives of observer countries. We also promote workshops and bilateral meetings between observers and OPEC. Moreover, contacts and action plans are being made among producers and consumers. The Permanent Secretariat of the International Energy Forum has now been established in Riyadh. The relationship with the IEA has been strengthened through different events, such as high-level bilateral meetings, joint press conferences and the Joint Workshop on Oil Investment Prospects we held at our Secretariat in Vienna just a fortnight ago. Oil and the environment In speaking of the future, it is also necessary to dispel another common, but mistaken notion that fossil fuels are a dirty form of energy. Possibly this can be traced to the old days of coal. However, the situation has improved greatly in recent years and this will continue into the future. Currently, natural gas is a well-used, cleaner-burning form of energy, while new technologies, such as CO2 sequestration, will allow gas and other hydrocarbons, such as oil, to be burned at even the zero emissions level. It is important to remember that fossil fuels are a product — and gift — of nature. Technical advances are allowing us to use this gift without damaging nature in return. Today, it is only a question of cost.

Organization of Petroleum Exporting Countries (OPEC) and Role of Saudi Arabia (Dreca, 2012) The aim of this research is to explain the OPEC position and the role of Saudi Arabia within OPEC. Saudi Arabia as the largest producer and country with largest oil reserves of oil attract many attention and many studies try to explain which role Saudi Arabia plays within OPEC, is it the role of dominant producer and which strategy Saudi Arabia used during its membership in order to keep its position and its market share. Saudi Arabia role is to keep the balance of production within OPEC. Saudi Arabia was explained as swing producer, and in order to protect itself and its interest because of cheating of other members of OPEC, it was forced to adopt the strategy tit-for-tat. There is big question of it is good to have dominant producer, or all of them to be equal. OPEC in the Epoch of Globalization: An Event Study of Global Oil Prices (Bina, 2007) OPEC is neither a cartel nor exhibits any sign of market domination, market control, or monopoly. This confirmation is also in accord with the pioneering account of the competitive differential oil rents formed across the global industry since the crises of the 1970s. OPEC is reflective of the competitive differential oil rents earned by its members; and, contrary to both the right and the left, and their obfuscating echo in the media, it rolls with the heavy-handed punches of global market in the present epoch Oil Market Modelling and OPEC’s Behaviour (Ayed AlQahtani, 2008) This literature review is divided into two parts (1) oil market modeling and (2) OPEC’s behavior within the oil market. In the first part, I looked at various oil market simulation and optimization models conducted to date with more emphasis on the optimization ones as I attempted building an oil market model of a similar nature. The second part of the review covers the literature on the efforts conducted to date on modeling, testing and analyzing OPEC’s behavior within the oil market as such a market behavior is pivotal to the proposed model’s mathematical formulation and solution. A Review of Factors Determining Crude Oil Prices (Happonen, 2009) The impacts of the price changes were broad and altered industrial activity, consumer behavior and political power globally. Understanding the factors behind these changes is important for commercial investments and public policy making. Academics, analysts and politicians seem to disagree on what is the main driver for the oil price development. Usual explanations are resource scarcity, cartel behavior, commodity speculation and market conditions.

OPEC and the international oil market: Can a cartel fuel the engine of economic development? (Noguera, 2005) The OPEC cartel was formed to promote two economic goals, one microeconomic — low oil market volatility — the other macroeconomic — promotes economic development of its members. These goals create a tension since the cartel’s single tool is output quotas. Using this dual micro/macro perspective we analyze oil exporting countries’ behavior. We find that the effects of the cartel’s choices will be reflected in oil market stability, long-term macroeconomic development, and international oil market structure. If an oil producing country cares about both oil industry profits and macroeconomic stability, the goal of output stability may be inconsistent with cartel membership. What OPEC Means for Today’s Oil Market At the bi-annual meeting in Vienna last week, the Organization of Petroleum Exporting Countries announced its decision to extend the production cut of 1.8 million barrels of oil per day until the first quarter of 2018 to support the recovery in oil prices. While the market had anticipated the move, the extension did not have a strong impact on crude oil prices, unlike the surge in commodity prices witnessed in November 2016 when the OPEC deal was first announced. To put things in perspective, WTI crude oil prices had gone up by more than 9% in November following the initial agreement to reduce output, as opposed to just a 2% jump in oil prices when OPEC announced the extension of the cuts. This trend not only indicates that the proposed output restrictions are not enough to have a meaningful impact on oil prices, but also hints at the fact that OPEC’s power to influence crude oil prices is waning.

OPEC’s Changing Position In The Oil Markets. Historically, OPEC accounted for more than 40% of the world’s crude oil production, and was responsible for exporting nearly 60% of the total petroleum traded internationally. Consequently, the cartel’s huge spare capacity that could be easily maneuvered to suit the condition in the global oil markets, coupled with its significantly low cost of production, allowed it to play the role of a Swing Producer, exerting strong influence on crude oil prices. However things changed for the worse when oil prices crashed in mid-2014 due to the oversupply created by U.S. shale producers. At first, OPEC decided to keep pumping high levels of oil, despite the plummeting prices, to defend its share in the global oil markets. Until mid-2016, this strategy seemed to work well for the member countries as they could easily sustain their oil output even at a price of $30 per barrel. That said, the prolonged weakness in oil prices started weighing heavily on the OPEC members and their economies, which are highly dependent on oil exports. Thus, the cartel members, who had earlier decided to take an aggressive approach to push back on U.S. shale producers, were forced to pull back their output to boost oil prices, and in turn stimulate their dwindling economies.

The purpose of OPEC for members is to”coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry. OPEC members collectively supply about 43% of the world’s crude oil production. Together, OPEC members control about 81% of the world’s total proven crude reserves. OPEC member countries monitor the market and decide collectively to raise or lower oil production in order to maintain stable prices and supply. A unanimous vote is required on raising or lowering oil production. Each member country controls the oil production of its country, but OPEC aims to coordinate the production policies of member countries. Oil and energy ministers from OPEC member countries usually meet twice a year in March and September to determine OPEC’s output level. They also meet in extraordinary sessions whenever required.

The task of stabilising the oil market and guaranteeing secure demand and supply, with reasonable prices and fair returns to investors, cannot be carried out by OPEC alone. Cooperation is necessary. Cooperation between OPEC and non-OPEC producers. Cooperation between producers and consumers. Cooperation among organizations. Stable prices allow consumers and producers to meet today’s needs. Secure supply prevents disruptions that can send prices spiralling and stall economic growth. And sufficient investment ensures that we will be able to provide the necessary oil to meet the growing energy requirement of the future. These are the common goals we share — although at times this fact might be obscured when we view the challenges too strongly from one perspective. To achieve these goals will require the efforts of all of us. But I can assure you that the future looks very bright, if we seize the opportunity to work together.

One major form of pollution that affects marine life is oil spills. Oil is extremely toxic to marine life and the harmful effects occur as soon as the oil hits the water. Oil spills are very dangerous for marine birds, mammals, fish, and shellfish. About 1.3 million gallons of petroleum are spilled into U.S. waters from tankers and pipelines each year. According to the National Ocean Service, oil destroys the insulating ability of furbearing mammals, such as sea otters, and the water repellency of a bird’s feathers, thus exposing these creatures to the harsh elements. Without the ability to repel water and insulate from the cold water, birds and mammals may die from hypothermia. Some birds and animals will ingest the oil when they try to clean themselves, which may poison them. In addition, the transfer of oil to eggs and young may result in reduced survival. Although fish may not be exposed to the oil immediately, the oil can reach them if it is mixed into the water column.

According to the National Ocean Service, when adult fish come in contact with oil, they may experience fin erosion, reduced growth, enlarged livers, reproduction impairment, and changes in heart and respiration rates. Oil also negatively affects the survival of eggs and juvenile fish. As stated by the IPIECA and IOGP, planktonic organisms such as zooplankton and jellyfish are relatively sensitive to toxic effects from oil exposure, particularly small oil droplets and water soluble fractions. Laboratory studies have reported a range of acute, chronic and sublethal effects on various species and life stages. Large numbers of juvenile lobsters, clams and other species can be killed by exposure to high concentrations of naturally dispersed oil. Coral reefs can be affected by oil spills. Once oil comes in contact with corals, it can hinder their reproduction, behavior, growth, and development or even kill them.

The entire coral reef ecosystem can suffer from an oil spill, including the species of fish, crabs, and other marine invertebrates that live in and around coral reefs Turtles are vulnerable to oil when they come in contact with it at the surface of the sea or onshore. When they are at the surface they can become oiled, or in the worst case scenario, smothered. Juvenile turtles are much more sensitive to oil toxicity than the adults, spend more time at the surface of the sea, and some may swallow small tar balls. If there was a severe impact on turtle nesting sites, the local populations might decrease. All in all, oil spills have many negative effects on marine ecosystems. Oil is highly dangerous and toxic to marine life. Hopefully, in the future, we can prevent oil spills and the destructive consequences that affect marine ecosystems.

Introduction

The eve of April 20th, 2010 was just like any other in the Gulf of Mexico where the various oil rigs were busy in their extraction of oil from the sea bed. This, however, was not the case with Deepwater Horizon, one of the ultra-deepwater rigs located around 50 miles off the southeast coast of Louisiana, which was involved in a huge explosion that eventually resulted in the death of eleven workers and the sinking of the rig two days later. Despite the loss of precious lives, the damage did not stop here, and immediately after the sinking of the rig, reports of a major oil leak came in. The oil spill is majorly the result of a failed blow-out preventer which was installed at the mouth of the pipe in the sea bed, and as a result of its failure, this still continuing oil spill is now regarded as the worst oil spill in US history.

Oil Spills and their Environmental Effects

The Deepwater Horizon is being said to release up to 5,000 to 10,000 barrels of oil per day. Such a high rate is being feared by environmentalists and other scientists as an incident that is bound to damage the nearby environment permanently. This high rate of the oil spill has caused the spread up to the coastal areas of Louisiana, Mississippi, and Alabama causing the closing down of many beaches, limiting the fishing industry to only a few areas, resulting in a serious impact on the economics of the region.

But the damage of the oil spill is not only in terms of economics. Economically thinking, the damage is far more beyond our imaginations. This oil spill has led to the limitation of the supply of fresh oxygen into the water, thus resulting in the deaths of marine life. Fishes and underwater plants are dying at an increasing rate due to the lack of oxygen and the toxicity of the region[1]. Moreover, the vapors released by the spill are damaging the environment due to their toxic nature and are continuously spreading.

The Importance of Oil in Global Conflicts

Looking at the Deepwater Horizon oil spill, one simple question comes into our minds: is this the same oil being wasted that we’ve been fighting over for years? The answer to this question is “yes, it’s the same.” When asked, many people would see it as a blow to the sacrifices that our ancestors did in making sure that the land that we live on is abundant of all resources and we do not have to ask others for their help. In this modern era, oil has become a very important part of our life – the importance which can be signified by the fact that think tanks globally are thinking of effective alternatives to oil just so that it can be preserved.

Global history is filled with fights over the issue of natural resources. There have been numerous battles and wars won and lost just so that the other nation could get hold of more resources. Such resources are mainly water and food, but after the discovery of oil, the fights are now about oil, water, and food[2]. Any country with all of these three resources has the potential to rule the world, a threat which was proved not very long ago when the oil-producing countries in the Middle East banned the export of oil to the west, resulting in high inflation throughout the countries that were dependent upon it.

Even in this modern era, where we have developed alternatives to energy, there is still an ongoing war between the countries for the availability of oil. Countries are still trying to negotiate their share in the control of the oil from the oil-producing countries. While some have succeeded in getting theirs, many have failed simply because they cannot afford such a venture. Global conflicts are occurring between countries as they have yet failed to settle their agreement with the oil-producing countries. Countries are also trying to gain the maximum possible advantage that they can attain in oil production in international waters.

Conclusion

The recent oil spill, which is being blamed on BP, has raised numerous questions, not only on environmentalists alone, but also on the minds of scientists, and historians. Those who have a brief knowledge about global history know that resources such as oil have always been the cause of conflicts in one way or the other. It is, therefore, better to say that such oil spills are a serious waste of a very precious resource as our daily lives depend heavily on oil. An error in the case of oil extraction should be heavily penalized as the company involved that although the venture is in the favor of the country’s economical stability, on the other hand, one slightest mistake would result in the loss of both the money involved along with the surrounding environment.

Do Nothing

If I were Amora Srinivar, I would choose to sit back and watch as events unfold because my immediate supervisor has no confidence in me. There is nothing that can be disgusting as sharing ideas with someone who undermines your efforts. The supervisor is one of the people who view women as inferior and that’s why he does not handle this issue with the seriousness it deserves.

Ignoring the issue is not the best option but it has been said that when you can’t beat them join them because in this case, I would be fighting a losing battle by trying to solve the problem with people who are not willing to corporate. From the statement in this case, if Amora tried to persuade the supervisor to take action concerning the underlying causes of spillage the conversation would end in insults directed towards Amora by the supervisor. This is because it is certain that her supervisor is one of those people who think they know everything and don’t take suggestions kindly.

Consequently, alcoholism is a major problem in all areas of life and in this corporation, the sailors are used to it such that drinking has become their way of life. Amora’s supervisor is certainly aware of the efforts and the consequences that are needed to deal with these drunkards. First, they would need to be rehabilitated because sacking them would not solve the problem. They should be sensitized about the dangers of oil spills to the environment and this comes with attached expenses to cater to the awareness campaigns and rehabilitations.

Even if Amora decided to ignore her supervisor and partner with the sailors her efforts would not bear any fruit because they are not learned hence they would not see the importance of caring for the environment. Since there are very few knowledgeable sailors if the current ones were sacked to give room for fresh recruitments the performance of the oil corporation would decline because the new sailors would require some time to get acquainted with the new rules and regulations.

Furthermore, she would risk being sacked through incitements engineered by her supervisor. This could be because they don’t get along well as usual in most companies. After all, the seniors see their aggressive juniors as a threat to their position. Even if Amora decided to remain silent about the issue the seniors would come to know about the problem later on because if the spills continue they will capture the attention of other industry players who would push for affirmative action against the corporation.

In case the matter erupted in such a manner she can then inform the seniors that she had tried to discuss the matter with her immediate supervisor but was ignored. At this point, the supervisor would bear all the blame for failing to act accordingly because oil spills are not only a liability to the corporation but also release toxic greenhouse gases that cause serious problems to the environment such as global warming (Chew 35).

Go over the Superior’s Head

Amora can decide to skip her supervisor and move on to the senior administrators because they might give her a hearing and consider her worries. This will not go down well with her supervisor because he might feel that she does not respect his authority. Desperate times call for desperate measures hence I strongly support this course because the issue at hand does not revolve around an individual but the whole world. This is because if she chose to do nothing about the matter the situation could deteriorate and the consequences that will follow could ruin her career as well since responsibility in such cases is collective.

I would approach an administrator whom I get along with and persuade him/her to link me to the people who are concerned with such issues to present my arguments. I would establish an appropriate approach and would never mention anything about my supervisor because I would not want to make it look like I am inciting the administrators about my supervisor.

I would push my argument as a concern about the losses that the corporation has continued to experience due to spillages. I would request a brainstorming session with all the concerned parties including the employees because if I made the suggestions directly I could be victimized by my supervisor and in that case, he could sabotage my efforts in the future in an attempt of implicating me as being incompetent.

In the meeting, I would suggest the rehabilitation of drunkards and the inception of new sailors who would be integrated with the current sailors. I would recommend the enactment of an alcohol policy to ensure that the same problem does not occur in the future. This means that the company would not employ people who indulge in alcohol in the future. Lam explains that this is because cleaning the mess created by the spillage, such as the Exxon Valdez case costs millions of money and also taints the name of the corporation as being irresponsible (237). Moreover, the spillage is a threat to marine life because the plants and animals that reside in water can’t access oxygen which is essential to their lives.

Go Public by Anonymous Leak

This is a risky option because of the administrators came to know that I was the one behind the leak I would lose my job because they expect me to safeguard the interests of the corporation at all times. But then, I can’t afford to remain silent as the corporation continues to benefit at the expense of others. Before I revealed information to any media house, I would make sure that my recent remarks would not implicate me as a suspect who could have leaked the information. This means that before the leak I must remain silent about the issue and create an impression that I don’t know anything about it.

I would choose one of the most renowned media houses such as the cable news network (CNN). I would make sure that they will withhold my details before proceeding with the briefing. The briefing would take place in a secure location where I’m not known. I would also leak the information to the activists because they are best suited for pushing for reforms due to their mobilization skills.

Alternatively, instead of meeting discreetly with the media officials I can prepare audio and video clips and drop them in the suggestion boxes of many media houses as possible. This is the best thing to do because they can’t trace the source of the clips unless they involved forensics which is not possible. After all, this is not a criminal offense.

If I choose to go public, it’s because I would not want the other companies in this industry to go through the same thing. This is because when the issue is televised the other companies will take caution as they would not want to be caught on the wrong side of the law. In essence, I would recommend shipping companies to be cautious about spillages hence they should be made to clear the spillages and pay a heavy monetary fine to encourage other shipping companies to take care of their cargos. The incident that involved Exxon Valdez was an eye-opener hence shipping companies should learn from such mistakes.

The Gulf of Mexico Oil Spill 2010 is described as the worst oil disaster to have ever happened in the history of the oil industry. Also known as the Macondo Blowout, the spill continued for approximately three months unabated. The root cause of the spill was a result of an explosion of the Deepwater Horizon that drilled the BP-Macondo prospect (Eagan, 2012). The explosion was caused by the mounting build-up of natural gas that had been forcing its way up the drill pipes for several weeks before the explosion. The BP oil company received enough threat predictions but disregarded every warning for a possible disaster. In this paper, the events surrounding the spillage in the gulf and its impacts on the environment will be discussed.

It is important first of all to note that oil spillage has varying impacts on the environment depending on a number of factors. These factors include the oil composition, its quantity, the dispersal technique, as well as its contact with the organism (National Oceanic and Atmospheric Administration, 2010). More than half of the coastal wetlands in the lower 48 states of America are within the Gulf of Mexico coastal region. The spillage in the gulf posed a significant loss with regard to environmental effects. It caused immense destruction to aquatic world life habitats and significantly affected the luxurious tourism industry. The oil industry was fairly blamed for the spillage for lack of safety plans to avert an occurrence of such magnitude.

The spillage was caused by an explosion of high-pressure methane gas that expanded into the drilling riser from the well (Eagan, 2012). The gas was then released on the drilling rig where it burned into flames causing a big explosion. The casualty number was however relatively low as only 11 workers were unaccounted for. The conjecture is that they burnt in the flame. Luckily, the rescue teams were prompt in saving the workers using lifeboats while others were airlifted by helicopters for medical help (Eagan, 2012).

The disaster could not have spread so fast were it not for the southerly winds that greatly increased its speed. The oil spill covered approximately 580 square miles and the most vulnerable ecological sensitive area was only 50 km away. Chandeleur islands were closely threatened by the spill and a massive destruction of the ecosystem could have occurred. Five days later, the entire spillage approximation was at 3,850 square miles (Eagan, 2012). The extent of spillage as estimated by European Space Agency reached the loop current which flows clockwise around the Gulf of Mexico towards Florida joining the Gulf Stream along the east coast of the United States of America (U.S. Department of the Interior, 2010).

According to the U.S. Department of the Interior, (2010), the leakage was the largest to have ever happened amounting to a record 4.9 million barrels of oil. The final spillage estimate was about 53,000 barrels per day although the BP had provided a lower estimate to avoid a higher fine (Thompson, 2012). Many scientist involved in the investigations on the Mexican gulf spill still maintain that a lot of undetected oil was still under the water (U.S. Department of the Interior, 2010). There are a number of regions that were greatly affected by the spillage. The Louisiana coast was one of them as well as the Mississippi and Alabama islands. At the Pensacola beach, the oil spill was visible by 9th June (National Oceanic and Atmospheric Administration, 2010).

In an effort to restore the Gulf of Mexico, BP used several clean-up methods with some failing. Spreading chemical dispersants was one of the few options available. This method nonetheless has significant side effects as a research found out through examining the health of cleanup workers (Eagan, 2012). The chemical substances found in dispersants increase the chances of the workers to get exposed to carcinogens.

Removing the oil from the water was another method used to clean up the gulf by the BP Company. This involved three approaches which included filtering offshore, burning the oil, and colleting for later processing (Thompson, 2012). Burning the oil method could not proceed owing to bad conditions that could have led to greater loss. The large-scale skimmers were disadvantaged by the Environmental Protection Agency decision not to use skimming for cleaning up the spillage.

The impacts of the spillage to humans were significant especially during the cleanup process where dispersants were used. Affecting the ecological system, survival balance was greatly compromised. The oil covered and caused the death of more than 8,332 species (National Oceanic and Atmospheric Administration, 2010). Oceanic life support was greatly compromised by the spillage affecting commercial activities on the coastal regions. These impacts are long-term and will influence and have an impact on many generations to come. Nonetheless, the impacts of the spillage are more of ecological than of health concerns.

The oil spillage was a massive loss to the BP and the oil industry as a whole and the impacts on the entire economy will be felt across all other industries. Due to the loss incurred, it is expected that the prices of oil will escalate and hence influence the market’s both local and internal players. These are, however, the short-term impacts. The long-term impacts will include climatic change due to the modified and damaged ecosystem.