Annual Cost Of Oil Spill Cleanup
With so many oil spills taking place all over the world and the recent British Petroleum oil spill in the US makes people wonder what is the annual cost of oil spill cleanup. Unfortunately, one cannot answer this question as the actual cost of cleaning up an oil spill varies from one spill to another and is based on a number of factors, like the kind of oil, the location, the technical methods used to clean up the spill, and the characteristics of the area where the spill has occurred. |
Most oil companies do not disclose the cost involved in cleaning up oil spills as they want it be a business secret. Hence, calculating what amount is spent each year on cleaning up spills all over the world is not known. The annual report published by the International Oil Pollution Compensation Funds does give some indication on the cost of oil spills, but this data is just for those companies that are members of the Funds. Hence, the data is skewed. It has also been noticed that the Funds only get involved when compensation is more than the tanker owner's ability to pay compensation. Hence, the data only gives indication of large and expensive oil spills. (See Reference 1)
The most expensive oil spill that took place was in Alaska by Exxon Valdez. The cleanup process cost a whopping $2.5 billion, and there were fines, penalties and claims that the company had to pay for. Many court cases related to this oil spill are still continuing, hence, the actual cost of cleanup is still not known. The oil spill in France in the year 1978 cost Amoco Cadiz $282 million, and out of this half of the money was spent on legal fees and interest that had accrued. Then the oil spill in the UK in the year 1993 cost Braer $83 million. Not too much was spent on cleaning up the oil spill as most of the spilled oil managed to disperse naturally. (See Reference 1)
As per the Resources for the Future, the average cost for cleaning an oil spill amounts to $16 for each gallon spilled. (See Reference 2)
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Annual Cost Of Oil Spill Cleanup
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