1. How Much Damage Has The BP Oil Spill Done? In the months since the start of the BP oil spill in the Gulf of Mexico there have been harrowing images of birds coated in oil and dead dolphins, but just what do we know about the scale of the environmental damage done?
2. WILL ANIMAL LIFE RECOVER? There is an advantage in that the spill happened in the warm Gulf of Mexico, where conditions are good for decomposition. In colder climes, things can be harder. Contrast that with the Exxon Valdez where you still have beaches where you can kick over cobblestones and still have pools of oil beneath them. In the Gulf of Mexico it is a different environment. There is some greater capacity for that environment to handle hydrocarbons. But that is not to say the oil will totally vanish. There may be oil which becomes buried on shore, and oil may end up at the bottom of the sea in anaerobic areas - places where there is no oxygen to allow the microbes to do their work. We have never seen these clouds or plumes of oil dispersed in tiny droplets in the water. We don't know how much is ending up on the bottom. Onshore, we don't know how much is being buried.
3. WILL ANIMAL LIFE RECOVER?With events like this their impacts occur in different phases. First there is the initial wave of deaths, the animals that get covered in oil and die. Longer-lived animal populations will take years to recover .The death toll already includes a thousand bird carcasses - half of them are oiled, others are just carcasses, a few hundred turtles, 50 or so dolphins.But those small numbers reflect the fact that only a small percentage of carcasses are recovered. The assumption is that the actual mortality rate is many times what has been recovered, The rule of thumb for the bird carcasses is that they find one in 10, but that could be low.The question everybody will be asking is how quickly can animal numbers return to normal. It all depends on the life span of the animal.In the Ixtoc spill of 1979 there was a 60-70% reduction in shrimp in the year of the spill, but they were back to normal within one or two years. Then there are longer-lived animals like dolphins, whale sharks and sea turtles. If a single generation has been largely wiped out, numbers might not fully recover for 10-20 years.
4. How BP Capped The WellIn June, BP placed a cap, known as an LMRP cap, over the top of the Deepwater Horizon well so oil could be collected at the surface. However, this continued to leak oil and has now been replaced with a better fitting device.
5. On 20 April, the Deepwater Horizon oil rig in the Gulf of Mexico exploded and oil began spewing out of ruptured pipes. After weeks of failed attempts, BP has finally managed to stem the flow from the well. When engineers removed the LMRP cap on 10 July, oil began to freely flow from the top of the blowout preventer once more. However, the Q4000 containment system continued to take some oil to the surface.
6. On 20 April, the Deepwater Horizon oil rig in the Gulf of Mexico exploded and oil began spewing out of ruptured pipes. After weeks of failed attempts, BP has finally managed to stem the flow from the well. Engineers then bolted on a new capping stack onto the blowout preventer (BOP). This allowed them to conduct a series of tests to see if the flow of oil could be stopped using the newly installed equipment. NEW CAP FOR LEAkING OIL WELL
7. During the test the three ram capping stack has been closed and all sub-sea containment systems collecting the oil temporarily suspended, effectively blocking the flow of oil from the well.
8. Once the tests have been successfully completed, BP will resume collecting oil. The Helix Producer ship was recently connected to the BOP to provide another collection route in addition to the Q4000 rig. NEW CAP FOR LEAKING OIL WELL NEW CAP FOR LEAKING OIL WELL NEW CAP FOR LEAKING OIL WELL
9. In June, financial markets were briefly pricing a bankruptcy of BP in the next five years as an odds-on probability as a result of the ongoing oil spill in the Gulf of Mexico. Things are not so bad now. BP's share price - which had more than halved since the Deepwater Horizon oil rig explosion in April first triggered the company's woes - has staged an impressive recovery in recent weeks. Yet talk continues to circulate of a possible strategic investor in BP - either as a welcome provider of fresh capital to the company, or an unwelcome opportunist sniffing a bargain. So what are the options now for BP? Which way forward for BP?
10. Phoenix from the ashes? The last possibility, and one that some market participants may be considering seriously again, is that BP will recover fully from its current debacle. Having promised to set aside $20bn in a dedicated "escrow" account, some are hopeful there may be a tacit agreement with the White House that this figure will represent a cap on the company's liabilities. Only time will tell.
