Deepwater Horizon Bust or Boom?

The Deepwater Horizon oil spill in the Gulf in 2010 was a shocking disaster resulting in a tragic loss of lives.

But, if there had been no deaths, it would be easier for us to look at the oil spill another way: It could be a bonanza for people along the Gulf struggling through a sour economy. Or, it could be a bust, a repeat of the stimulus fiasco.

In the immediate aftermath of the oil spill, thousands of people — many of them already laid off in the Great Recession — were put to work in one of the biggest public works projects since the Great Depression, setting boom, skimming oil, cleaning beaches.

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MW Consulting’s crew demonstrated boom made from natural, oil-absorbing kenaf.

Everyone living along the Gulf Coast knew someone — or were themselves — involved in the clean-up. MW Consulting was itself involved. We convinced Florida’s DEP (Department of Environmental Protection) to put out a call to inventors and builders to demonstrate restoration products. More than twenty groups from around the world participated, on an oil-soaked stretch of Pensacola Beach, FL.

Most of the people who worked in the clean-up, especially those involved in the “Vessels of Opportunity” program — privately owned boats hired by BP (British Petroleum) for inshore and offshore work — loved the money but were disdainful of the actual work.

Repeatedly, “it’s being done for the cameras” was heard. Members of land crews also raised issues, the most common being that oil wasn’t being removed from shores and beaches: it was being buried.

Despite the negativity, most everyone was grateful for the work — and the money. No one knows for sure how much was spent, but it was in the billions.

Now: round 2. The money from fines that will flow into the Gulf States will be at least $5 billion, and perhaps as much as $20 billion. In addition to fines, there will be lawsuit money, someday. Even at the low end ($5 billion), that works out to about $25 per gallon in fines for each gallon spilt (about 5 million barrels, or 200 million gallons).

In short, a lot of money, with 80% of it going to the affected states (Texas, Louisiana, Mississippi, Alabama and Florida).

In Florida, every Gulf Coast county is guaranteed some part of what the state receives.

What will they spend it on? MW Consulting is working with various counties on their project lists, which then go into a state consortium plan, which then goes to a Federal council. As there is no deadline to spend it all — and no real timeline on when the greenbacks will start flowing — this will be a story for years to come.

What we hope is that this opportunity isn’t botched the way the stimulus program was. We had predicted from the start of stimulus that governments were not capable of efficiently spending vast sums of money quickly, and indeed they were not. The Inspector General for Florida’s Department of Agriculture and Consumer Affairs, which last year assumed control of the state’s foundering Energy Office, has just concluded exactly that (click here to link to a press release and copy of their audit).

A related question is whether or not the oil well has actually been contained. Reports of significant seepage and still-uncollected spillage continue.

Our goal is to help our clients manage their way through what will be a challenging process, resulting in projects that create and retain jobs, and that are worth doing. We will do our part to ensure the goals are met!

6 thoughts on “Deepwater Horizon Bust or Boom?”

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