How the BP Oil Spill Could Cost You

By Kenneth Moore | Jul 16, 2010

There’s no doubt that the BP oil spill is not only an ecological disaster, but a financial one as well. KTVU.com reports that last Monday, BP stated the cost of dealing with the Gulf of Mexico spill has risen to $3.5 billion, including nearly $165 million to settle individual claims.

The nation will certainly suffer for a long time to come, but how does this spill affect the individual? You may soon find yourself suffering a personal financial loss due to the BP oil spill. Here’s how:

Oil Clean-Up Costs Paid Through Taxes

The Oil Pollution Act of 1990 caps the financial responsibility of an offshore oil rig at $75 million. That leaves quite a difference that someone has to make up for.

President Obama has already stated that he expects BP to fully cover the cost of cleaning up the spill, and as GreenChipStocks.com explains, Democratic Senate Leader Harry Reid assures “Taxpayers will not pick up the tab.”

However, the government has already spent $138 million in taxpayer money to clean up the mess, but claims taxpayers will be paid back and “BP will eventually be billed for the entirety of the taxpayer dollars spent on cleanup efforts,” according to an article by CBS Money Watch.

It’s possible that BP could file for bankruptcy down the line, though, and Americans who had nothing to do with the gulf oil spill might have to contribute to paying for clean up costs anyway.

Higher Gas Prices

There is much disagreement regarding the effect the oil spill will have on the price of gas, but some worry consumers will possibly see gas increases by fall. CBS continues to explain in 5 Ways BP’s Oil Spill Will Cost You that while OPEC could easily make up for any production shortfall, if new regulations and offshore drilling restrictions continue, the editor of Powers Energy Investor, Bill Powers, believes the oil spill will contribute to higher gas prices over the next two to five years.

Ezra Klien of the Washington Post writes that you won’t be paying more for gas: “The BP spill is going to cost fishermen, it’s going to cost the gulf’s ecosystem, and it’s going to cost the region’s tourism industry. But that cost [will] fall on taxpayers, on Gulf Coast residents who need new jobs, on the poisoned wildlife on the seafloor.”

So, stable gas prices will not necessarily be good news. The Gulf spill is a tragedy that will continue to affect the lives of all Americans, even if indirectly, and everyone will end up paying for the mounting costs in some way.

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