Saturday, November 6, 2010

Gulf spill could have $4B impact

Gulf spill could have $4B impact

By Patrick Rupinski Staff Writer
Published: Saturday, November 6, 2010 at 3:30 a.m.
Last Modified: Friday, November 5, 2010 at 8:34 p.m.
The BP oil spill in the Gulf could cost the state more than $4 billion in lost economic output and workers' earnings, according to a University of Alabama analysis.
The analysis released Friday and prepared by UA economists Samuel Addy and Ahmad Ijaz said in a worst-case scenario the months-long spill resulted in a $3.3 billion loss in Alabama economic output and $971 million in lost earnings and affected 49,000 jobs.
“Individuals and businesses could make $1.6 billion in claims and the state and local governments could make a collective $149 million claim for lost tax revenue” in the worst-case scenario, the analysis said.
The economists, who work at UA's Center for Business and Economic Research, analyzed four scenarios to gauge the impact on the state of the oil spill.
The study said that under the best-case scenario Alabama lost $1 billion in economic output with $97 million in lost earnings from 13,600 jobs.
The worst oil spill in the country's history started April 20 when BP's Deepwater Horizon oil drilling rig exploded in the Gulf off the Louisiana coast, killing 11 workers. Oil flowed into the Gulf until July 15, when the underwater well was capped. The spill spread an oil slick that affected the waters and shorelines of Alabama, Mississippi, Louisiana, Texas and Florida.
The UA analysis looked only at the spill's impact through September, but noted that spill's effects are expected to last a number of years. “Future year impacts will depend on additional information gained over time about the nature of the disaster and the response to it. ...,” the analysis said.
The state industries that took the hardest hit from the spill were tourism, which includes recreational fishing, commercial fishing and water transportation, the economists said. But they noted lost economic opportunities and lost earnings in those industries affected other industries and workers, too.

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