When it comes to oil spills, it's hard to separate the heart of the matter from the hype. While there's no debate about the fact that oil spills are, you know, a bad thing, there is plenty of disagreement about exactly how much damage they cause, and about what this means for the oil industry. This debate is really about priorities: economic, ecological, cultural, corporate...it seems that everyone has an angle. In order to understand the ultimate effects of an oil spill, both short and long term, it is important to examine this issue from a number of those angles.

Oil Spill
Credit: willsfca via Flickr

Oil spills have a huge financial cost, even more disturbing is the toll they have on the environment and wildlife.

For an oil company, a spill is a disaster on many fronts. Of course, every barrel lost is money down the tubes, but this is probably the least of an oil company's concerns; a spill is a much bigger disaster on the PR front. Companies spend a great deal of time and money defending and explaining themselves in the media, and hiring lawyers to deal with suits and legislative issues. They also face cleanup costs, which perhaps represents the greatest expense in the aftermath of a spill. In both the short and long term, the considerable damage to a company's reputation can mean sharp drops in stock prices, inability to meet current contracts and loss of future ones, and even suspension of drilling licenses. In all, a spill is an unmitigated disaster for an oil company. It is important to remember this fact, which helps explain why ecological concerns seem to be the last thing on oil companies' minds in the wake of a spill.

From a more general economic perspective, spills wreak havoc on local economies. Because the world oil market is so large, a spill's effect on worldwide gas prices is minimal in the long term, although it could certainly have a temporary inflationary effect on regional oil prices. More damaging is the shutdown of offshore rigs and the local fishing industry, which results in inevitable job and income losses that can run into the tens of millions of dollars. The closer a spill is to the shore, the more likely it is to affect a local economy. The long term damage to a local economy is probably minimal, however, as rigs eventually reopen and sea life populations regenerate.

The angle that gets the most attention, and perhaps deservedly so, is the ecological implications of a spill. News channels love carrying pictures of environmental organizations cleaning up oil-slicked birds, or carrying dolphins to safer waters, stories which generate the best ratings and elicit the most impassioned responses. And to be fair, the plight of wildlife does deserve our attention, especially the incredible depletion of fish and sea life populations in affected areas. However, the great majority of attention paid to wildlife rescue and cleanup efforts diverts attention away from the real issue, prevention, and the greatest threat to that prevention: over-dependence on oil.

Many legislators love to focus on preventing offshore drilling, but this is a cause rife with obstacles, and contrary to popular belief, not all of them are sinister. Offshore drilling is currently producing a great deal of the new oil finds in the Western hemisphere, and helping to dampen the effects of rising prices around the world. Many of the same people delivering impassioned pleas against offshore drilling would undoubtedly find a sharp rise in prices at the pump to be quite unbearable!

All of this again displays to us why a heavy investment in alternative fuels is once again the best solution to a number of problems facing us today. Limiting offshore drilling to relatively shallow waters is, of course, a good start, but this action obscures the fact that most oil spills still occur during the transport (shipping) phase of oil production and delivery. If we need less oil in the future, we will need both less drilling AND less shipping, which means a net gain to the environment, if not the pockets of oil companies. But there will be new companies and industries to take their place, ones whose "money maker" will ultimately result in far less damage to the natural world than oil. This is the only real "preventative" approach with long-term sustainability.