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Monday AM May 10th, 2010

The congressional hearings have begun into the BP oil spill in the Gulf of Mexico. Attorney generals from affected states want BP to make the claims process quick and easy. But determining compensation could take some time. Rice University economics professor Ken Medlock says the economic fallout is going to be wide-ranging.


“You know, we’ll be paying for it as consumers because the price of oysters and shrimp might change.? But it’s all the businesses that support the people who are engaged in those primary industries—you know, the local gas station, the local grocery store, all these sorts of things.? I mean, their income is derived from those individuals spending money in their establishments.? So, you know, a lot of times we just focus on the primary impacts.? But sometimes, you know, these sorts of things can have pretty devastating secondary impacts, as well.”

Medlock says it’s difficult to speculate until the investigations are complete.


“We don’t actually know what happened yet.? It’s important for us not to rush for judgment, and wait for all the information to come out—the deeper federal investigation into exactly what happened on the Deepwater Horizon.? Once we have all that information, it’s going to be much more clear in terms of understanding who bears the brunt of the liability.? Was there any sort of negligence involved?? Was this sort of a very low probability event, or is there actually a major engineering flaw that means this could happen much more than we think it could’ve?”

BP acknowledges that it bears responsibility for the clean-up. But the Deepwater Horizon Project also involved partners such as Anadarko petroleum and subcontractors such as Transocean, Cameron International and Halliburton.

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