New York – Although efforts are on to deal with the oil spill in the Gulf of Mexico, one cannot ignore the stakes for the region’s economy that are getting higher and higher as the efforts still seem to fall short of any fruitful result.

According to economists, the numbers are still being calculated around when it comes to how much oil spill will cost BP and the Gulf of Mexico economy as the stakes are huge which could even mean as high as $100 billion. Primarily two things arise out of the present scenario. Firstly, when will the leak be sealed and when will the most of the oil be washed ashore? Unless these two questions are answered, the total cost of the damages cannot be ascertained.

According to a 2007 survey done by the regional economists of the region, the Gulf of Mexico has got four biggest industries viz. oil, tourism, shipping and fishing. These four account to some $234 billion aggregate revenues annually, of which two third of the amount belongs to US as whole and the remaining third to Mexico. And if the Gulf of Mexico were a country in itself, then it could have even been the 29^th largest economy in the world.

Ironically speaking, the major revenues are generated by the oil and gas industry, generating about $124 billion or you can say 53% of the total revenues. This statistic is according to a former economic professor at the Florida University.

All the new offshore drilling in the waters of the US remained closed as on Thursday, after the Deepwater Horizon oil rig sunk last month claiming 11 lives, and leaving the uncapped oil leaking millions of gallons of oil into the waters daily. Hence, longer the ban, harder it would be for the economy as the lost revenue from the shallow water drilling is already estimated to be around $135 million.

Then the oil spill has cause additional damage to the tourism sector of the region where the tourism alone generates about 46% of the Gulf economy i.e. over $100 billion yearly, according to A&M report. This has badly affected the visits of the tourists at the shores, with many cancellations in the process for as far as 3 months out.

When it comes to fishing and shipping, the government has already closed more than 25% of the federal waters for fishing activities, and many fishermen in the region are out of work. Though there is no disruption for shipping activities in the region, but the total economy at present is down in the region and is a matter of concern for US, mainly because the estimated total economic damages may be around more than $1.6 billion. But this number was calculated when the oil spill was estimated to be around 1,000 barrels a day into the ocean. Infact, according to government scientists, as many as 19,000 barrels i.e. around 798,000 gallons of oil is being spilled into the ocean daily.

On Sunday, BP has affirmed to redouble its efforts after their most awaited operation to control the spill damage has failed. The company now plans to install a containment cap over the well a mile below the surface.

[Source – CNN]