The flow of oil into the Gulf of Mexico has temporarily stopped for the first time in nearly three months, as BP Amoco PLC installed a new cap on its damaged well last week. The July 15 installation is the latest in a string of solutions for what is being called the largest spill in American history.

The spill, which is the result of the April 20 explosion aboard the drilling rig Deepwater Horizon, has released an estimated 200 million gallons of oil into the gulf over the past 86 days. Previous efforts to cap the well had only resulted in collection of oil, not a permanent seal.

Company working towards permanent solution

Now BP is considering an option called a “static kill” that would pump mud into the damaged well, forcing the oil back into the reservoir so the well can be capped from the bottom. The operation could begin as early as this weekend, weather permitting. This option would speed up the process of digging a relief well, due to be completed in August, which is the seen as the ultimate solution.

BP scientists tried a similar method before, an effort called “top kill,” which failed because they could not pump the mud fast enough to keep up with the flow of oil. Scientists believe that “static kill” will succeed because this time because the cap ensures that oil isn’t already coming out of the well when the pumping begins.

BP to face consequences

Even if the effort succeeds, BP will still face consequences for this ecological and financial disaster.
BP has been ordered to begin paying for the losses caused by the spill. The company has set up a $20 billion fund to pay for any losses that they caused, and will add to the fund if this is not enough. The U.S. House Committee on Natural Resources also recently approved a measure that, if passed, could ban BP from gaining any more offshore drilling contracts.

The Sunday Times of London has reported that BP is negotiating the sale of up to $10 billion in assets, including part of its Alaska drilling share, to an independent oil company called Apache. If the sale goes through, the profit would cover half of the money for the fund that has been set up to pay damages to those who have suffered loss of income from the oil spill.

Continued fallout from the spill
But analysts at Dun & Bradstreet released a report showing that up to 73 million businesses will be directly affected by the spill and up to 34.4 million employees across the states of Alabama, Florida, Louisiana, Mississippi and Texas. The result may be as much as a $5.2 trillion dollar loss in sales volume, vastly more than the $20 billion BP has set aside.

With 78,264 square miles of fishing grounds closed off because of the spill at the time of the Dun & Bradstreet analysis, at least 1,034 businesses have been impacted. This could lead to a minimum loss of $177.2 million in sales for fisherman, and climbing as nearly 6,000 more square miles have been closed to date.

Additionally, the spill can hamper the ability of fish to spawn, greatly decreasing the amount of fish to be caught by gulf coast fisherman. The U.S. Department of Fish and Wildlife also reported that as of July 19, 2,818 birds, sea turtles, dolphins and other sea mammals had been collected dead.