The Washington Independent's Annie Lowrey highlights analysis from Cumberland Investors David Kotok -- frequent contributor to CNBC, the New York Times, the Wall Street Journal and Barron's magazine -- on the ongoing oil spill in the Gulf of Mexico. His take on what's likely to result going forward, is pretty gloomy, to say the least. And it deserves to be set alongside the claims of this fool, Representative Gene Taylor, Mississippi Democrat and utter slut for the oil industry, who compared the disaster to a "chocolate milk" spill.
Here's what Kotok describes as the best-case scenario (mind you, his descriptors are "bad," "worse," and "ugliest"):
Containment chambers are put in place and they catch the outflow from the three ruptures that are currently pouring 200,000 gallons of oil into the Gulf every day. If this works, it will take until June to complete. The chambers are 30-foot-high steel configurations that must be placed on the ocean floor at a depth of one mile. This has never been done before. If early containment is successful, the damages from this accident will be in the tens of billions. The cleanup will take years. The economic impact will be in the five states that have frontal coastline on the Gulf of Mexico: Texas, Louisiana, Mississippi, Alabama, and Florida.
The "ugliest" scenario involves a decade-long cleanup, the Gulf becoming a "damaged sea for a generation," and "hundreds of billions of dollars" in cost. Also: "The oil slick leaks beyond the western Florida coast, enters the Gulfstream and reaches the eastern coast of the United States and beyond. Use your imagination for the rest of the damage."
And the political liabilities?
In addition, the offshore-drilling energy sector will face much-increased and more costly regulation. Deepwater and all offshore drilling in the US has been set back for a generation, just as Three Mile Island set back nuclear power development for decades. No politician can win an election now with a permissive view on drilling. Sarah Palin's "Drill, baby, drill" now condemns her to political marginalization. Off shore drilling has lurched to the top of the political agenda in this November's election cycle.
Representative Taylor should maybe take a few minutes to reflect over a glass of Quik, or something.
MORE:
The Worst-Case Economic Scenario for the Oil Spill [Washington Independent]
Gulf of Mexico - "Oil Slickonomics" [David Kotok]
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