"Blowouts are very rare for the entire industry as well as for Imperial... the probability of a blowout is low -- one in 285,000." -- Imperial SSRW submission, March 2010.
Prior to April 20, 2010, the oil industry treated blowouts like rare events with a predictable level of risk.
Then the improbable -- a wellhead blowout on the Deepwater Horizon drilling rig -- killed 11 men and spilled 4.9 million barrels of crude oil into the Gulf of Mexico. The oil gushed for three months, wrecking havoc on the environment, wildlife and the economy.
A year after the largest marine oil spill in history, we must remember that the improbable remains not only possible, but beyond our ability to predict and control. Offshore oil spills are Black Swan Events -- extremely hard-to-predict events that carry the risk of major impact. And they come with significant costs.
British Petroleum has estimated that its damages, including penalties and clean-up, from the Deepwater Horizon oil spill will cost US$40-billion. Resources for the Future, a non-profit group of ecological economists peg the damages to private parties at anywhere between US$105- and US$239-billion.
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