Wednesday, May 26, 2010

At Risk: The Gulf's $234 Billion Economy

In addition to the devastating affect on their delicate ecosystems, states near the Gulf of Mexico will likely take a huge financial hit because of the massive oil leak. The total cost of the damage cannot be determined just yet, as oil continues to spew into the ocean, but as this article on explains, some experts are predicting it could surpass $200 billion.

The numbers being batted around when it comes to how much the oil spill will ultimately cost BP and the local Gulf of Mexico economies are huge. $3 billion? $14 billion? One politician put it at over $100 billion.

The range is so big because two important questions remain unanswered: When will the leak be sealed, and will most of the oil wash ashore? Until those questions are answered no one will know the exact price tag of the damages. However, there have been studies done looking at what's broadly at stake and the number is quite large indeed.

The four biggest industries in the Gulf of Mexico are oil, tourism, fishing and shipping, and they account for some $234 billion in economic activity each year, according to a 2007 study done by regional scholars and published by Texas A&M University Press.

Two thirds of that amount is in the United States, with the other third in Mexico.

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