Economic Impact Of Oil Spills Biology Essay


An examination of the ecological and economic impact of oil spills including government and industrial reactions to such disasters. Oil is today considered a basic necessity in society in order to sustain industry and our current lifestyles. This dependence on oil is unlikely to decrease in the future since most industries use oil and petroleum derivatives to produce 'essential' goods such as plastics, fertilizers, medicines and paints. Oil currently supplies about 40% of the world's energy and 96% of the world's transportation energy. (Korin & Luft, 2009)The United States alone, consumes 21 million barrels of oil per day which is more than 25% of the world's total. (Churchill, 2000) With world population increasing, along with India and China's economic growth, we can expect oil consumption to double in the next few years.

As the consumption of oil increases, the threat of oil pollution also proportionately increases. A majority of the world's oil reserves is concentrated in the Middle East due to which large quantities of oil is transported to different parts of the world via tankers, ships and pipelines. Accidents can occur at many stages of this process during production, transportation and storage. Oil spills continue to happen, even today, in spite of improved technology and regulation regarding marine oil spills.

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Most people often have the misconception that oil spills from tankers are the primary source of pollution in the marine environment. While most of the large spills are from tankers, these spills account for only 12% of the oil entering the sea. (Committee on Oil in the Sea, 2003) Currently, 1.3 million tonnes of oil enters the sea annually through natural and other processes. In fact, natural seeps account for 46% of oil discharge. (Committee on Oil in the Sea, 2003) This process is completely natural with crude oil and natural gas seeping out of the fissures into the ocean bed naturally. A large percentage (37%) of oil spilled into the sea or ocean is due to the run off of oil and fuel from land based sources. (Committee on Oil in the Sea, 2003) However, the sheer volume of oil spilled by these tankers and high profile incidents in the past such as the Exxon Valdez incident highlights the negative impact of accidental spills from tankers on our society.

Twenty years ago, the super tanker Exxon Valdex struck a reef in Prince William, Alaska releasing 10 million gallons of oil in the sea.(Ricciardi, 2009) This was the worst oil spill in US history and it greatly impacted the ecology and economy of the region. This paper will examine and analyse each stage of the process after an oil spill such as Exxon Valdez, with focus on the environmental and economic impact of such spills. It will also examine government and corporate reaction and policy regarding accidental spills from tankers

When oil is spilled on water, a number of changes occur in the physical and chemical properties of oil due to weathering. This alters the clean up process which is implemented to remove the oil. Evaporation is the most important weathering process which occurs to oil. Once oil is spilled, about 80% of the evaporation occurs in the first few days, after which the rate of evaporation steadily declines.( Doerffer, 1992) Evaporation causes air pollution and changes the density and viscosity of oil thus altering the clean up. Additionally, oil once spilled, spreads rapidly, even without water and wind currents and reaches its maximum area within one day. Wind and currents speed up this process. This impacts the clean up, since it is harder to recover and clean thin layers of oil.

Hence, due to the above mentioned weathering processes, containment and recovery of the oil should be done as soon as possible. Containment booms are the most frequently used pieces of equipment to prevent the oil from spreading and to divert it to other areas where it can be recovered and treated. The main aim of containment is to concentrate oil into thick layers to facilitate recovery. However, containing this oil often poses a problem since the booms are working against wind and water currents resulting in failure to contain the oil.

After containment, recovery of the oil is the next big step. The oil can be recovered either using skimmers, sorbents or by manual recovery. All these methods work best when the oil slick is relatively thick and the water is calm. Hence most of the time, due to weathering, the oil cannot be recovered. Treating the oil with chemical dispersants is another option for dealing with oil spills. These dispersants break down oil into their chemical constituents. They help disperse oil making it less harmful to the wildlife and shore line. These dispersants however, pose a toxicity problem resulting in a substantial loss of sea life. Hence, by using dispersants there is a trade off between toxicity to aquatic life and saving birds and shore line species. They are also not a hundred percent effective, resulting in their use being very controversial with special permission being required in most jurisdictions. Dispersants have not been used in North America for approximately ten years and in Europe only three countries use dispersants.

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Another clean up method which is used especially in the Arctic region is in-situ burning which is the controlled burning of the oil at or near spill sites. This is a one step solution with the major advantage being that it removes large amounts of oil in comparatively less time. It is also less expensive and requires less labour compared to other clean up techniques. The obvious limitation of this process is the noxious fumes which are released in to the atmosphere by the burning. Most of the times burning is not a feasible option since the oil slick is not thick enough and hence will not ignite. Additionally, burning oil leaves a residue which also poses an environmental problem.

The oil spilled in water is rarely contained and some of it always eventually reaches the shore line. This affects the plants and animals on the shore line destroying their natural habitat and food source. To deal with shore line contamination, manual removal is the most common method used where workers pick up oil, oiled sediments or oily debris. These workers often face health problems (such as respiratory and dermatological problems) due to their exposure to crude oil.

The net environmental benefit of the clean up process is often analysed by oil spill responders. Sometimes the assessment is that the clean up process will be more intrusive to the environment and the oil is left as it is.

In the case of the Exxon oil spill, the size and remote location of the spill posed a considerable problem. Three main methods were tried in an effort to clean up the spill. The oil spill was initially burned. However this did not prove to be successful due to the unfavourable weather. Mechanical recovery of the oil was also tried. Bad weather, along with malfunctioning of the skimmers considerably slowed this process. In addition, a trial application of dispersants was performed which proved to be ineffective. Due to the slow clean up process, authorities tried to save sensitive shoreline prioritizing seal puppy locations and fish hatcheries. In spite of all this effort, millions of animals and birds were adversely affected by the spill.

Oils spills have many obvious adverse effects on the environment. Oil can affect animals and mammals in many ways, including changing their reproductive and feeding behaviour. Birds are the most visibly impacted by oil spills in an aquatic environment. Oil contaminates feathers when the bird comes in contact with oil slick. This poses a serious problem for sea birds since it impacts their buoyancy and insulation. Birds also, often experience a behavioural change after oiling, causing them to be unable to be negligent of their nests, resulting in a loss of eggs. Exposure to oil can also cause some species of birds to stop laying eggs. A high concentration of oil also results in the direct death of adult fish and the formation of tumours in fish and molluscs. Oil spills have a greater impact on marine mammals such as seals, sea lions, walruses, otters and polar bears due to their proximity to the shore line. The younger animals are more vulnerable to oil since their coats are not developed enough to provide insulation on severe oiling. This often results in their death. Polar bears often ingest oil through grooming themselves, causing their death. Spills often damage coral reef which support thousands of fish, algae and invertebrate species. The oil spills have various effects on the reef such as slowed growth or restoration and unnatural coloration. Recovery of the habitat surrounding the coral largely depends on the recovery of the reef.

Arctic environments are often cited as a special case for oil spills, but in fact they are equally sensitive to oiling. The impact of spills is increased by the fact that environmental diversity is very low in the Arctic and it takes longer to recover. Oil components additionally take longer to degrade in such a cold environment making recovery a longer process.

Many times, sites are restored by replacing trees and vegetation and by rehabilitating animals and birds at a site. However this process of environmental restoration is fraught with difficulty since it can upset the ecological balance at these sites. Furthermore, some species of animals cannot be rehabilitated easily.

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Spills can also affect human being adversely especially members of the clean up crew and coastal residents. The benzene contained in the hydrocarbon is a carcinogen linked with bone marrow leukaemia. Direct contact with the skin can additionally cause dermatological problems. Effects on people from exposure to oil can cause many respiratory and other problems such as headaches, dizziness and vomiting.

Pollution after an oil spill also impacts the economy of the thickly populated coastal area. The oil spill adversely impacts the fishing industry. The fish on exposure to the oil, ingest enough hydrocarbons to cause an unpleasant and oily taste in the fish making it unsuitable for human consumption. The spill also causes income loss and property loss to the regional businesses and hinders future investment. Additional costs have to be incurred to relocate, replace and rehabilitate some shore birds and mammals. There are however some positive spill related impacts on the economy due to the jobs created by clean up and the temporary surge in tourism immediately after the spill.

After the Exxon Valdez oil spill, economists tried to quantify the total economic damages caused to the residents of the Prince William Sound region by their willingness to pay to prevent another Exxon-Valdez oil spill. It was found that the residents were willing to pay $4.9 to $7.2 billion in order to prevent another such oil spill. (Cleveland, 2008)

In response to rising public concern after the Exxon Valdez incident the American government instituted the Oil Pollution Act of 1990, which placed primal responsibility for oil spill response on the responsible party. This act increases the liability of shippers. It also "improved the nation's ability to respond to oil spills by establishing provisions that expand the federal government's ability, and provide the money and resources necessary, to respond to oil spills." (Environmental Protection Agency, 1990) The act also called for formation of regional response teams within the state. The OPA also created the 'Oil Spill Liability Fund' which guaranteed $1 billion dollar per spill. (Environmental Protection Agency, 1990)

However, these provisions of the law are vulnerable to revision due to the prevalence of large lobby groups in Washington. Hence, the effectiveness of the law depends primarily on its enforcement.

Oil response is most often difficult and expensive. They require multilateral agreements to be signed between countries to deal with spill situations. The importance of cooperation and coordination with regards to oil spills is further highlighted by the case of the Prestige Oil Spill.

In 2002, the Prestige oil ship suffered structural failures off the Galician coast and started to leak oil. The French, Portuguese and Spanish government's refusal to allow the ship to dock in their ports resulted in the further deterioration of the ship. The tanker eventually broke into two resulting in a spill of 20,000 tonnes of fuel. The remaining 58,000 tonnes of fuel oil sank which led to a problem of oil oozing from several cracks in the bow. (Albaiges, Morales-Nin, Vilas, 2006) This gave rise to an additional spill of 40,000 tonnes.(Albaiges,,2006) Due to the lack of initial response, the Galacian Coast was most affected by it making it the largest environmental disaster in Spain's history. Approximately 2000 kilometres of the coast line was decimated by this spill and more than 300,000 seabirds were estimated to have died (Loureiro, Loomez, Vazquez, 2009) Studies estimate that it will take ten years for the areas affected by the Prestige oil spill to return to normal and environmental restoration will only be possible by 2015. Hence, the need for international legislation and agreements between neighbouring countries regarding oil spills proves to be imperative.

The International Maritime Organization (IMO), a specialized agency of the United Nations was formed for this purpose, to provide international regulation regarding safety of shipping. Recently, all members of the International Maritime Organization decided to phase out single hull oil tankers by 2015 with double hull oil tankers since they provided more protection against spillage.

Oil Tankers are generally of two types, the crude oil tanker carries large quantities of oil whereas the product tanker carries much smaller amounts of oil. Recently, the super tanker was also introduced which can carry 2 million barrels of oil. This is more than six times the amount spilled in the Exxon Valdez accident. (Maritime Connector, 2007) Hence the introduction of super tankers has rightfully increased public concern about pollution of the ocean. Although tank vessels account for a small proportion of total spills in the ocean, they contribute to more than 60% of the volume in spills. (Maritime Connector, 2007)

Before the Oil Pollution Act (OPA) was passed, government regulations on oil spills were minimal and the liability of the owners was very limited. If an oil spill impacted the marine environment, no settlement could be claimed since the wildlife and the impacted shoreline and habitat was "unowned". Lost profits or economic harm were also not grounds for a lawsuit and recovery was denied for the loss of income.

Now, under the OPA, parties who suffered economic losses such as owners of hotels and restaurants, property owners are legible to claim for damages. The OPA increases the liability of the oil industry. Any person impacted by the oil spill including the federal and state governments could sue for damages.

The International Maritime Organization additionally requires all ships carrying more than 2,000 tons of oil to maintain insurance. (IMO, 2000) Pollution insurance is a type of insurance required to cover costs related to spills, restoration and clean up. Exxon Mobil recovered a significant portion of clean up and legal expenses through insurance claims. The $2 billion which was spent on clean up was mostly covered by insurance.(Keeble, 1999) They additionally paid $50 million from an insurance fund. (Keeble, 1999)

In the Exxon-Valdez spill, Exxon was ordered to pay a total of $900 million to the federal and state governments to settle their claims. (Gao, 1998) This money was supposed to be used to restore, replace and enhance the impacted regions. Exxon Mobil additionally paid $100 million for criminal charges. (Gao, 1998) They paid an overall of $507 million to compensate more than 32,000 fisherman and landowners, with each plaintiff receiving an average of $15,000 as compensation. (Liptak, 2008) They have also claimed to have spent $3.5 billion in clean up and hired local fisherman and other local residents for clean up. (Gao, 1998). The Supreme Court recently reduced the $5 billion punitive damage award against Exxon to $500 million. (Liptak, 2008)

Of the $900 million received by the government, $200 million dollars has been set aside to study the ecological impact of this spill. It was observed, as of 2001, 55,000 litres of oil remain on the shoreline decaying at a rate of 4% annually. (Riccadia, 2009)Due to which, scientists conclude that residue should persist for approximately a century. The spill impacted marine life dramatically especially the numbers of whale pods and sea otters in that region. The herring population was also greatly impacted by this spill resulting in the collapse of the fishing industry in 1993. Many families lost their livelihoods and were forced to take out huge loans. Litigation against the company has dragged on for two decades now, with 22,000 plaintiffs suing Exxon Mobil. During the past 20 years alone, 6,000 of the original plaintiffs have died.

As long as we continue our current consumption patterns and lifestyle, oil spills are inherent and almost unavoidable. Stricter regulations and policies have marginally help limiting the amount of spills in the ocean. The obvious solution to the problem of oil spills is to reduce our dependence and consumption of oil. There should be greater emphasis and focus on using renewable sources of energy which are easily available to that region.

However, realistically, given our past consumption trends, oil shall continue playing a pivotal and key role in our day to day lives. Hence a lot of emphasis is now being placed on developing more efficient clean up technology for oil spills. NASA recently developed a petroleum remediation product (PRP) which "absorbs, encapsulates and remediates hydrocarbons." The PRP is made out of natural bees wax which binds with hydrocarbon products absorbing oil. Naturally occurring microorganisms then feed on this bees wax, releasing harmless products such as carbon dioxide and water. Additionally, nano sponges are being developed for oil spills. These sponges when dipped into a mixture of oil and water absorb oil swelling to a bigger size and weight. Strict regulations and safer ships should also hopefully curtail the number of marine oil spills.

There are definitely technological and lifestyle solutions and changes to these environmentally disastrous problems such as oil spills. However implementation still remains a problem. Vested political interests along with problems of scale prevent many environmentally efficient solutions from ever taking flight. It is imperative for us to realize the importance of living in harmony with the environment around us and try our best to coexist with it.