ENVIRONMENT Economic Costs Of An Oil Disaster Twelve days ago, an oil rig owned by energy giant BP exploded, killing eleven workers, and causing an oil leak that has continued ever since, spilling up to one million gallons of oil a day into the waters off the Gulf Coast. Yesterday, Interior Department Secretary Ken Salazar said that the environmental outlook for the Gulf Coast is "very grave," and that it could take up to three months for the leak to be fully plugged. "It potentially is very catastrophic. And I think we have to prepare for the worst," Salazar said. At its current rate, the spill will eclipse the Exxon-Valdez disaster of 1989 (if it has not done so already), placing it "on the scale of the largest oil spills in history." Towns all along the coast are bracing for oil to begin washing ashore. Admiral Thad Allen, Commandant of the U.S. Coast Guard -- who was named the "national incident commander" for the spill response -- said that it's only a matter of "when and where" the oil finally hits the shoreline, adding that "it's logical to assume" that the coasts of Louisiana, Alabama, Mississippi, and Florida will be affected. It's also possible that the Gulf Stream and varying weather patterns will move the oil up the East Coast. "It will be on the East Coast of Florida in almost no time," said Hans Graber, executive director of the University of Miami's Center for Southeastern Tropical Advanced Remote Sensing. Though it is too soon to accurately determine the exact amount of damage wrought by the spill, various industries will surely be affected, and the environmental and economic effects of the spill will linger for years to come.
THE COST OF CLEANUP: According to David Kotok of Cumberland Advisers, initial estimates of cleanup costs totaling about $12.5 billion are "only a starter." "This will be a financial calamity for many firms, not just BP and its partners and service providers. Their liabilities are immense and must not be underestimated," he wrote, adding that "we expect to see the deterioration of the economic statistics for the US." BP itself is spending between $6 million and $7 million per day on the cleanup effort. For comparison, the Exxon Valdez spills costs exceeded $7 billion. The federal government is also mobilizing resources, including National Guard units, the costs of which BP will be held responsible for. "As the responsible party in this incident, the government will hold BP accountable for the costs of the deployment," said a Pentagon spokesperson. The federal government may also tap into the Oil Spill Liability Trust Fund, which is built up by a tax on oil produced in or imported to the United States, in order to compensate victims of the disaster. According to the New York Times, "up to $1 billion of the $1.6 billion reserve could be used to compensate for losses from the accident." This is critical, as failure to address the many economic effects of the spill could be a drag on a still weak economy. BP made $163 billion in profits from 2001-2009 -- and another $5.6 billion in the first quarter of this year -- and has asked other oil companies, including Exxon Mobil, to pitch in with the cleanup effort. Despite their extra cash, however, the company decided to forgo "a remote-control shutoff switch that two other major oil producers, Norway and Brazil, require," in order to save $500,000 on the rig.
INDUSTRY AND TOURISM HIT: The Gulf Coast's tourism and fishing industries are already gearing up for what they expect to be a severe financial hit due to the spill. Louisiana, where oil has already started coming ashore, is the largest seafood producer in the continental United States, with annual sales of almost $2 billion. The federal government has banned commercial fishing for at least 10 days off the coasts of four states, and affected fisherman are already seeking compensation, as "a federal class-action lawsuit has been filed on behalf of two commercial shrimpers from Louisiana seeking at least $5 million in compensatory damages" from BP. Louisiana also has a recreational fishing industry that pulls in about $1 billion per year, according to state figures. In fact, tourism all along the coast will likely be impacted by the spill. "I have reports from Destin that travelers are canceling plans for May and June reservations for fear oil will be on the beach," said John Hairston, chairman of the Gulf Coast Business Council’s tourism committee. Local restaurants that depend on seafood stand to lose out too. "[A] large segment of the Gulf Coast is going to be devastated," said Kimberly Nastasi, director of the Mississippi Gulf Coast Chamber of Commerce. "So many of the local restaurants are focused on seafood." All told, according to the Environmental Protection Agency, the Gulf of Mexico supports a $20 billion tourist industry. Commercial shipping on the Mississippi River may also have to be halted, depending on cleanup efforts and if oily ships need to be washed before moving on.
SPILL, BABY, SPILL: Prior to the spill, conservatives claimed that the benefits of drilling for oil offshore outweighed the risk. "All of the benefits associated with offshore drilling, increased economic output, well-paying jobs, new tax revenue, remain locked up in America's oil reserves," said anti-tax crusader Grover Norquist, president of Americans for Tax Reform. But now, many offshore drilling proponents are rethinking their support. For instance, conservative darling and drilling supporter Marco Rubio said that the spill should make us "rethink" our drilling technologies. Fox News' Brit Hume, another supporter of drilling, said that the spill "verifies" the concerns of environmentalists who warned that a spill disaster was inevitable. "It's clearly not clean enough after we saw what we saw today -- that's horrific -- and it certainly isn't safe enough. It's the opposite of safe," said Florida Gov. Charlie Crist, who has expressed on-again, off-again support for drilling. President Obama has announced that no new offshore drilling leases will be issued unless rigs have new safeguards to prevent this kind of disaster. "It has to be done safely," said Secretary of State Hillary Clinton. "It can't be done at the risk of having to spend billions of dollars cleaning up these spills." Several Democratic lawmakers, meanwhile, have called on the administration to halt all expansions of offshore drilling, including Sen. Bill Nelson (D-FL), who introduced a bill to stop the Obama administration from moving forward with the plans.
MILITARY -- GATES URGES CONGRESS TO DELAY 'DON'T ASK, DON'T TELL' REPEAL: In a strongly-worded letter to House Armed Services Committee Chairman Ike Skelton (D-MO), Defense Secretary Robert Gates wrote he doesn't want Congress to take any action on repealing Don't Ask, Don't Tell (DADT) until the Pentagon's "working group" on the issue has completed its work to determine the impact a repeal would have on the U.S. Armed Forces. Citing the need for a "a thorough, objective, and systematic assessment of the impact of such a policy change," Gates wrote, "I strongly oppose any legislation that seeks to change this policy prior to the completion of this vital assessment process." According to Aubrey Sarvis, executive director of Servicemembers Legal Defense Network, Gates' stance "delivered a devastating blow to getting repeal done this year," which Obama has asked Congress to do. Sarvis called the letter a "joint political decision" by Obama and Gates and and said that it "showed a lack of respect for our LGBT service members who are on the frontlines every day risking their lives for our safety." There is momentum for a DADT repeal this year as 13 Democratic senators have signed onto an effort to enact a repeal after the Pentagon's review has completed. One of the bill's co-sponsors, Sen. Mark Udall (D-CO), responded to the letter by saying, "There is no reason why Congress shouldn't pass legislation this year that would time the repeal to follow the conclusion of the study." House Speaker Nancy Pelosi (D-CA) has also signaled her support for repeal, saying that Congress should "immediately place a moratorium on dismissals under this policy until the review has been completed and Congress has acted." Democrats in Congress will have a tougher time attracting moderate and Republican co-sponsors in light of Gates' letter, and if Congress waits until next year -- after the Pentagon review is completed -- to move forward on legislation, the make-up of the legislature will be different and could again delay repeal. White House Spokesman Tommy Vietor said Friday, "The President's commitment to repealing Don't Ask Don't Tell is unequivocal. This is not a question of if, but how. That's why we've said that the implementation of any congressional repeal will be delayed until the DOD study of how best to implement that repeal is completed. The President is committed to getting this done both soon and right."
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President Obama visited Louisiana yesterday afternoon to observe the response effort to the BP oil spill, which he called a "potentially unprecedented environmental disaster." "Your government will do whatever it takes, for as long as it takes, to stop this crisis," he pledged. But Obama said taxpayers would not be on the hook for the cleanup, saying "BP is responsible for this leak -- BP will be paying the bill." Speaking to a mostly Republican audience near Kansas City on Saturday, former Alaska governor Sarah Palin called the Gulf Coast oil spill "very tragic," but said the U.S. should continue drilling offshore. "I want our country to be able to trust the oil industry," she said, adding, "We've got to tap domestically because energy security will be the key to our prosperity." Oil giant BP said today that it will pay "all necessary and appropriate clean-up costs" related to the recent oil spill disaster in the Gulf of Mexico. "BP takes responsibility for responding to the Deepwater Horizon oil spill. We will clean it up," said a company statement. Obama administration officials told Newsweek that the Department of Homeland Security signaled to Arizona police that "it will most likely detain and deport only violent criminals" arrested because of the state's new anti-immigration law. All others "will get a written notice requesting that they appear for a future hearing -- warnings that some immigration officers call 'run letters' because recipients so rarely show up." Conservative Latinos are rethinking their ties to the Republican Party in the wake of the GOP's reaction to the new anti-immigrant Arizona law. Massey Villarreal, a past national chairman of the Republican National Hispanic Assembly, said, "It's insulting to have Republican leaders across the country applauding this racist law. I'm sure this is going to hurt the Republican Party." Tens of thousands of people demonstrated for comprehensive immigration reform in cities across America Saturday. The largest rally was in Los Angeles where reportedly 50,000 people took part. House Speaker Nancy Pelosi (D-CA) called on committee chairmen to "redouble your efforts" to chip away at the federal budget, stressing the need to improve "government operations to help achieve deficit reduction and long-term fiscal responsibility." In a letter to the chairmen last week, she asked them to send her a response by May 28 outlining their plans for hearings on the matter. "Medical interests alone shelled out more than $876 million in lobbying expenses during the 15 months beginning in January 2009 and ending in March, when Congress passed the sweeping overhaul," Roll Call reports. Those interests, which include the drug industry, doctors, hospitals, and manufacturers of medical products, "were responsible for one out of every five dollars doled out on lobbying during that period." The Pentagon "will release long-classified statistics about the total size of America's nuclear arsenal" today as "part of an effort to make the case that the country is honoring its treaty commitments to shrink its inventory of weapons significantly" Secretary of State Hillary Rodham Clinton will make the commitment to release the figures publicly in a speech at the opening of a United Nations conference. And finally: By all accounts, amateur comedian Barack Obama outperformed professional comedian Jay Leno at Saturday night's White House correspondents dinner. It turns out Obama had some professional help, however. The Daily Beast's Lloyd Grove reports that writers from Jon Stewart's The Daily Show helped pen some of Obama's "razor-sharp" jokes. |
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"The last word is, and don't forget the tax implication: We're all paying tax. If you remove the illegals who are not paying tax with Americans or legal immigrants who do pay tax, everyone wins, everybody wins."
-- Fox News' Eric Bolling, 5/01/10
VERSUS
"According to available estimates, there are about 12 million unauthorized immigrants in the United States. Federal, state, and local governments spend public funds that benefit those immigrants, and those immigrants pay individual income, sales, and property taxes."
-- The Congressional Budget Office, 12/01/07
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