BP Deepwater Horizon oil spill's impact on the us economy, Jonah Guo,Queen's MBA


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This presentation is prepared in the Macro-economy class to analyze the macro economic affect of the BP Deepwater Horizon oil spill. All the photos are found via Google search, copyright belong to the original authors. Logos came from the GreenPeace Logo contest

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BP Deepwater Horizon oil spill's impact on the us economy, Jonah Guo,Queen's MBA

  1. 1. BP oil disaster’s impact on the US economy Jonah Guo
  2. 2. Overview  Disaster Brief  Industry Impacts  GDP impacts  Summary
  3. 3. worst"environmental disasterthe US has faced" -- Carol Browner, White House energy adviser
  4. 4. Major impacts Food Fishing Health Care Tourism Oil
  5. 5. 145,000 businesses and close to 1 million employees STATE-WISE IMPACT (Business Closed) ON TOP INDUSTRIES Courtesy: D&B, oil spill – Impact analysis
  6. 6. Tourism Over $22 billion lost revenue from coastal tourism in the long-term Louisiana, had an increase in business visitor spending, due to increase in media presence and government travel
  7. 7. Nationally is not likely seriously affected There are other places to go:
  8. 8. Fishing Impact: Alabama (40%), Mississippi (95%), Florida (2%), Louisiana (55%) Louisiana , the biggest seafood supplier in US, could lose $2.5 billion with 27,000 employees affected. Only accounts for 1% state GDP
  9. 9. On the other hand, 2/3 gulf remained open for fishing US imports 80% of seafood Courtesy: NOAA Fisheries Service
  10. 10. Food Local restaurants primarily affected In 2011, FDA reported the seafood in the area affected by the oil spill was safe. Or maybe not? Consumers still leery
  11. 11. Health Care Eleven workers died “Chemicals in crude oil and dispersants can cause a wide range of health effects in people and wildlife, …damage every system in the body,…even cancer.” -- Wayne State University, Gulf Oil Spill Health Hazards Report The possible health care cost are unpredictable and could be HUGE
  12. 12. Short-term Oil price remainedlow and stable • Well is exploratory, not for production • 2/3 of US oil is imported• 24,000 barrels per day (0.026% of worldwide)
  13. 13. Long-term impact Restricted policy on offshore drilling could harm new offshore production. Yet no regulations have officially been implemented so far.
  14. 14. True Economic Impact  BP has fully paid Obama Administration 9 bills ($632 million total) for response and recovery operations .
  15. 15. Thousands of Clean-up workersoffset losses in industry
  16. 16. Disclaimer Vast majority of information published during the spill, projections were worst case scenarios. Media/research firms sensationalized data Just like this Logo contest
  17. 17. GDP(=?)Total US GDP in 2010 was $14.66 trillion• Gulf coastal Quarterly % Change in US GDP area only 6.0 accounts for 4.0 3% of national 2.0 GDP and 0.0 employment -2.0 -4.0• Total loss Nominal GDP less than -6.0 Real GDP 0.1% GDP -8.0 -10.0 Source: Bureau of Economic Analysis
  18. 18. The cost ofecology and environment may be huge
  19. 19. Questions?
  20. 20. Reference  Logos Courtesy: Greenpeace  Greener Media , Dark Horizon: A Documentary about the Gulf Oil Disaster http://vimeo.com/12737283  D&B, “2010 Deepwater Horizon Oil Spill Report” http://www.dnbgov.com/pdf/DNB_Gulf_Coast_Oil_Spill_Impact_Analysis.pdf (accessed June 12, 2011)  IEM, “A Study off the Economic Impact of the Deepwater Horizon Oil Spills”http://www.uflib.ufl.edu/docs/Economic Impact Study, Part I - Full Report.pdf (accessed June 12, 2011)  TreeHugger.com, “BP Gulf Oil Spills Impact on Tourism Estimated at 3 Years, Nearly $23 Billion”http://www.treehugger.com/files/2010/07/bp-gulf-oil-spill-impact-tourism-oxford-travel.php (accessed June 12, 2011)  CBC, “BP oil spill: 1 year later”http://www.cbc.ca/news/technology/story/2011/04/15/f-gulf-spill-one-year-later.html (accessed June 12, 2011)  Reuters, “Factbox: Gulf oil spill impacts fisheries, wildlife, tourism”http://www.reuters.com/article/2010/05/30/us-oil-rig- impact-factbox-idUSTRE64T23R20100530 (accessed June 12, 2011)  Business Monitor International, “United States Tourism Report Q2 2011”, Published in April, 2011 http://www.bizreportshop.com/product/bmi/United-States-Tourism-Report-Q2-2011_177900.html (accessed June 12, 2011)  Harold F. Upton, Congressional Research Service,“The Deepwater Horizon Oil Spill and the Gulf of Mexico Fishing Industry”, published in February, 2011 http://www.fas.org/sgp/crs/misc/R41640.pdf (accessed June 12, 2011)  How Did BP Gulf Oil Spill Effect Gulf Fishing Industry Charthttp://hubpages.com/hub/Gulf-fishing (accessed June 12, 2011)  Daily Finance, “BP Oil Spill Creates a Wave of New Jobs, Takes Others Under”http://www.dailyfinance.com/2010/06/01/oil-spill-jobs/ (accessed June 12, 2011)  Heatingoil.com, “BP Oil Spill Will Raise Oil Prices—in 2015”http://www.heatingoil.com/blog/bp-oil-spill-will-raise-oil- prices%E2%80%94in-2015603/  Medill Reports, “Why hasnt BPs oil spill caused oil prices to skyrocket?”http://news.medill.northwestern.edu/chicago/news.aspx?id=166157
  21. 21. Thank You for listening! Jonah Guo Queen’s MBA 2012 Canada www.Jonahguo.com jonahguo@gmail.com