BP Gulf oil spill damage valued at $17.2 billion in new study

NEW YORK (Bloomberg) -- BP Plc’s 2010 Gulf of Mexico oil spill caused damage to beaches, animals, fish, and coral that the public values at $17.2 billion, according to a financial accounting released on the seventh anniversary of the disaster.

The tally, published Thursday in the journal Science, is based on a survey of thousands of Americans that asked what they’d be willing to pay to prevent the kind of impacts unleashed by the spill, which began with a blowout from the Macondo well and an explosion on the Deepwater Horizon drilling rig on April 20, 2010.

The blowout of the Macondo well killed 11 rig workers and resulted in the worst oil spill in U.S. history, spewing 134 million gal of crude, soiling birds and marine life across the Gulf. BP, which contracted the rig, was forced to sell off billions of dollars in assets to pay for damages. The latest study, ordered by the U.S. government, is the most comprehensive attempt yet to put on value on the environmental losses, said Kevin Boyle, one of the lead researchers.

“The results were eye-opening," Boyle, an agricultural economist at Virginia Tech University, said in a statement from the school. “People value our natural resources, so it’s worth taking major actions to prevent future catastrophes and correct past mistakes.”

BP has set aside more than $50 billion for damages, which includes liabilities beyond ecological impacts, such as economic losses to the fishing and tourism industries. Transocean Ltd., owner of the rig that burned and sank, and Halliburton Co., which provided cement services for the project, also paid billions for their roles in the disaster.

The study found those surveyed would be willing to spend an average of $153 more in taxes for programs that would keep a similar oil spill from occurring. That was multiplied by the number of households represented by those who completed the survey to come up with the total of $17.2 billion.

BP replaced its chief executive officer after the catastrophe that began on the Deepwater Horizon and created a new safety office with “sweeping powers to oversee and audit its operations," according to a statement on its website.

“Making BP a safer, more risk-aware business was the first priority" of the company’s new management, the statement says.