THE UNIVERSITY OF SOUTH FLORIDA

Deepwater Horizon:
An Analysis of
Resource Exploitation
in the Age of Global
Capitalism
Running Header: Deepwater Horizon
Lauren Adkins, Jared Austin, Natalie Booze, Maggie Caum, Carolee
Chanona

adkins1@mail.usf.edu, Jaredaustin@mail.usf.edu, nataliebooze@mail.usf.edu,

mcaum@mail.usf.edu, cchanona@mail.usf.edu

Dr. Bosman
GEO 4502: Economic Geography
Group 1
The following provides an analysis of the 2010 BP Deepwater Horizon oil spill. In
this analysis we provide details and research relating to the conditions that led to
the spill as well as the environmental and economic effects of the spill nationally
and locally. The results show that BPs negligence is not the result of one bad
apple corporation, but is systemically imbedded in the capitalist systems hunt
for profits.

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TABLE OF CONTENTS
Introduction_____________________________________________________________2
Theory and Method_______________________________________________________3
Environmental Impacts________________________________________________________3
Economic Impacts____________________________________________________________6
Local Impacts________________________________________________________________7

Analysis and Discussion__________________________________________________12

Conclusion___________________________________________________________________13

References_____________________________________________________________14

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Introduction
On April 20th 2010, the gulf states of the United States became a grim example of the effects
of capitalisms hunt for diminishing resources in fragile gulf ecosystems. When the British
Petroleum Deepwater Horizon oil rig exploded off the Gulf of Mexico, the sheer magnitude of
the damage and cost associated with the explosion of this rig was unimaginable. This rig was 52
miles southeast of Venice, Louisiana, but the effects spanned the gulf because of a failure to
implement safety protocols to limit the release of flammable gases (Allin, 2014). An explosion
on the rig from these gases led to the deaths of eleven workers in proximity to the blast, and
initiated a gulf wide oil spill that pumped 1,000 barrels of oil a day from April 20 th 2010 to July
15th 2010 (Allin, 2014). This totaled to a spill size roughly 20 times larger than the Exxon Valdez
oil spill of 1989; The Deepwater Horizon spill also decimated wildlife habitats within the
immediate vicinity of the spill, as well as caused long-term ecosystem damage. This damage is
still being studied five years later.
The ecological, economic, and human expense of the Deepwater Horizon spill is still
hard to accurately calculate to this day. This event served as an indictment of the capitalist
system as a whole. In what has sometimes been referred to as The Race for Whats Left (Klare,
2012), the capitalist system is constantly pushing its physical boundaries in order to consume and
profit from a depleting resource like oil. The cost of this process, as shown by the Deepwater
Horizon spill, has been catastrophic. The capitalist system is no longer operating within a
rational realm of exploitation, if it ever has. With the ability to export crises abroad dwindling, it
must begin to consume its host to reap profitable resources, in this case oil is the resource and
both the United States and the Planet are its host. This concept is explored further in Michael
Hudsons book Killing the Host: How Financial Parasites and Debt Bondage Destroy the
Global Economy (2015). As this system continues to follow the grow or die logic of the neoliberal capitalist system, now a global model after the collapse of the Soviet Union, the corporate
sphere of influence and power is affecting the most fragile ecosystems and economic regions of
the world.
As the capitalist system expands globally through its various private and state apparatuses, it
creatively destroys and relocates space and time in ways it deems profitable or through the
economic devastation it leaves in its wake. This is a concept that cannot be separated from the
Deepwater Horizon incident of 2010 given that the system was able to reorganize its economic
infrastructure in ways to protect itself and its assets even in the face of mass public disdain and
lawsuits. While British Petroleum was able to protect itself financially after the spill, the
economic space and infrastructure surrounding the gulf was either crushed or forced to relocate.
This is a phenomenon, in which, big capital will continue to pursue financial success until the
environment is depleted and the system is ultimately overturned, or buried by its own hand.
This analysis will attempt to utilize the events of the 2010 BP oil spill to expound upon
the nature of the capitalist system in and of the United States. The context of the BP oil spill
explains the current capitalist system and the direction it is headed in terms of environmental
exploitation. The environmental, economic, and local impacts of the BP oil spill will be
explained within the context of this system in order to best touch upon the dangers capitalism
imposes on various local economies and ecosystems. An analysis of the regulatory oversight of
the Deepwater Horizon rig by both the industry and the federal government will also be explored

Deepwater Horizon 3
in an attempt to highlight the relationship between the modern nation-state and regulatory
oversight in the neo-liberal age.
Theory and Method
Environmental Impacts:
Perhaps the most prevalent and immediate threat the capitalist system produces in the 21 st
century are environmental contradictions that threaten the sanctity of the planet and human
survival. Nowhere does this become more evident than when analyzing the Deepwater Horizon
spill of 2010. Off the coast of Louisiana lies some of the most important ecological resources in
terms of fish production and ecological regeneration (Andersen et al., 2012, p. 562). The
ecological system containing these resources is the Mississippi River Delta system. Even given
its wealth of immediate environmental resources, the delta served as a mere externality during
the oil spill of 2010. As the capitalist system continues to hunt down dwindling resources,
governments and corporations have unified their alliances and liquidated their environmental
safety nets with the hope of relieving their reliance on foreign oil.
According to an article by Andersen et al., the Mississippi River Delta not only makes up
forty percent of the forty-eight contiguous states wetlands and wetland services, but it also
provides the United States with unprecedented ecosystem services. Some of these services
include protection from storms, water quality treatment, support for biodiversity, and carbon
sequestration (Andersen et. al, 2012 p. 562). This important, yet fragile ecosystem took some of
the heaviest hits from the initial oil spill, which devastated this ecosystem. The following figure
demonstrates the entrance of this spill onto the coast and into part of the river delta. The darker
regions indicate greater concentrations of oil.

Deepwater Horizon 4
Figure 1: (Jolliff, J. K., Smith, T. A., Ladner, S., & Arnone, R. A., 2014, p.90)
This is particularly concerning given that the most volatile and toxic elements in the oil were
most prevalent directly after the spill occurred. As Andersen et. al, indicate Fresh oil is more
volatile, contains more water-soluble components, floats, is not very viscous, and easily
disperses from the source. Therefore, freshly spilled oil is the most environmentally significant
type of oil (2012, p.564). The following figure displays the effects weathering and time has on
the spilled oil.

Figure 2: (Andersen et al, 2012, p. 565.)

As the figure above indicates, the abundance and prevalence of the spilled oil was most
intense immediately after the spill and as Andersen et al. points out, marshes are almost always
subject to the most volatile and persistent contaminants from spilled oil immediately after the
spill (2012, p. 565). This fact has particular resonance for the Mississippi River Delta as a major
marsh land. Below is an historical analysis of past oil spills and their effects on wetland
ecosystems.

Deepwater Horizon 5

Figure 3: (Andersen et. al, 2012, p. 563).

After considering the wealth of resources the Mississippi River Delta provides and the clear
impact it has on the oil and gas supply in the gulf, this question must be asked: why was a cost
benefit analysis not considered in the event a spill might occur, in terms of both cleanup and
impact on such an important and fragile resource? The answer is perhaps best summed up by
Magdoff and Foster in their book, What Every Environmentalist Needs to Know about
Capitalism: A Citizens Guide to Capitalism and the Environment (2011, p. 33) when they state
With both companies and governments pushing more and more growth and as the easily
exploitable resources are exhausted, increased environmental ruin is inevitable. As the
easily recoverable (and cheap) oil and gas are already being utilized, deposits that are
more difficult to reach or extract are utilized. Thus we see deep-ocean drilling for oil, the
extraction of oil from tar sands, and hydraulic fracturing (tracking) of shale deposits
(using toxic chemicals mixed with water, to access trapped natural gas and oil), all of
which have been demonstrated to have the potential to cause extreme environmental
harm.
As the capitalist system continues to expand and grow, its resources are becoming increasingly
depleted, while demand is ever increasing. This is forcing governments and corporations to
merge their interests in order to keep fuel costs low under rising demand and growing
populations. The capitalist system is sacrificing natural resources, ignoring cost benefit analysis,

Deepwater Horizon 6
and decimating local economies, so the neo-liberal system can continue to expropriate wealth by
any means necessary.
Economic Impacts:
The capital flow generated from the local economies surrounding the gulf was completely
halted or terminated in 2010 during the Deepwater Horizon spill. This incident highlighted the
risk both governments and corporations were willing to take in order to fuel the economic
interests of big capital. Since the oil spill, roughly half a million people have applied for a
settlement from British Petroleum due to the economic losses endured from the spill (Coe et al.,
2013, p.124). Since the initial claims have been filed, 6 billion dollars of the administered 20
billion in settlement fines have been paid out from BP while the other 14 billion has been trapped
in litigation (Coe et al., 2013, p.124). Those trapped in the endless cycle of litigation include the
small businesses that have helped keep tourism and local economies afloat in regions
surrounding the gulf (Rekdahl, 2015, p. 25). These precious local resources and employers have
been completely put out of business and for those who have been spared the future still remains
grim. Given the lack of compensation they have received from BP and the skepticism locals have
of buying seafood from restaurants impacted by the spill, their profit margins are expected to
continuously decline (Rekdahl, 2015, p. 25).
In a clear instance of capitalism and statism protecting the large corporation over the
small local business, it is no surprise that many are not reaping their settlement compensation in
a timely manner. In certain cases the time period some were forced to wait amidst court battles to
receive compensation was 18 to 30 months; a revolutionary break given the sometimes 20
yearlong compensation waitlists that occurred under the Exxon Valdez spill (Rekdahl, 2015, p.
25). As these compensation benefits are delayed, BP also continues to find ways to disregard
binding agreements issued under their compensation package. BP has claimed that for two thirds
of the settlements greater than $75,000, flawed data was used to allocate compensation (Rekdahl,
2015, p. 25). In these instances judges have often ruled in their favor, especially in some of the
hardest hit areas such as Louisiana, which delayed the compensation process even further.
Instances of economic downturn occurring from the BP spill were not, however, limited
to areas that were hit directly by the spill. Perhaps one of the hardest hit areas was the fishing
industry. Public perception of the spill and its effects on seafood caused devastation in this
market (Aldy, 2006, p. 1798). According to a Tampa Bay Times article concerning the gulf
fishing industries
What hurt the gulfs $460 million seafood industry more was the publicity. The dramatic
effort to shut off the oil, played out on TV screens around the globe, scared customers
away from ordering fish or shrimp caught anywhere in the gulf. Restaurants took it off
their menus and grocery chains removed it from coolers, even though it had been caught
in areas declared safe. (Pittman, 2013).
This example of the fishing industry and its public defamation due to the spill is no isolated
incident. Tourism in the major Gulf States was also negatively impacted by the perception of oil
covered beaches in Florida, Mississippi, and Alabama even when no oil reached those parts of
the gulf (Aldy, 2006, p. 1799).

Deepwater Horizon 7
The economic effects of the BP oil spill serve as a clear indictment of the broader
economic apparatus that dictates the current conditions of the global market system. The clear
disregard by both government and private forces for smaller businesses is not only apparent by
the spill itself and the deregulated conditions that allowed BP to expand into the gulf to begin
with, but also by lack of compensation administered to those most impacted by the spill. The
aftermath of the spill for big capital is also telling of the underlying structure of the current
system. According to Coe et al. (2013, p.124) during the aftermath of the spill, oil prices were
relatively unaffected and some studies indicated that the overall U.S. economy gained from the
spill due to employment for the cleanup. Such is the enigma of disaster capitalism (Klein,
2007) when even its failures are turned into opportunities for profitmaking. This is yet another
example of how the financialized capitalist system overcomes its own operational boundaries by
instigating crisis, only to rebound with interest from the exportation of the crisis both at home
and abroad. As long as the environment is in peril big capital will continue to grow and profit
while smaller local business and community members suffer.
Local Impacts
Any analysis regarding the environmental and economic destruction of the BP oil spill would
be remiss without discussing the local impacts to Florida and the Tampa Bay area. According to
Harvard Economist, Joseph Aldy, the environmental and economic impacts to non-panhandle
counties in Florida were significant (2014, p. 4). Of course in the immediate aftermath there was
a major boom to the economy, as was the case with other gulf states due to the jobs provided
from the cleanup effort. However, the long-term effects for Florida show depreciating wages and
a decline in economic growth. Aldy states:

The rest of the Gulf Coast counties and parishes experienced economically small and
statistically insignificant impacts on aggregate wages, although Non-Panhandle Florida
coastal counties witness a statistically significant decline of at least 4 percent in
accommodation industry wages. (2014, p. 4).
As Aldys research indicates, the initial boom of clean-up employment was not significant to
keep the non-panhandle areas of Florida shielded from the environmental devastation unleashed
by BPs negligence.

Deepwater Horizon 8
Unfortunately, the impacts to Floridas ecosystems and economy do not stop there. After
the spill occurred, Floridas tourism industry began to decline rapidly. In a study conducted by
the Journal for Travel Research, data was collected to determine the economic impacts of the
spill on tourism before and after the spill. The following figures detail their results.

Figure 4: Change in revenue of vacation rental sector by coastal county region in 2010 versus
2009. (Crotts et. al, 2013, p. 8).

Deepwater Horizon 9

Figure 5: Regional differences in demand by lodging sector AprilSeptember 2010 versus same
period in 2009. (Crotts et. al, 2013, p. 9).
As the figures indicate, the oil spill that occurred in April 2010 had substantial effects on various
parts of Florida and their economies. The authors detail the significance of these figures when
they state:

The poorest performing regions during this period were Central West Florida (15.7%),
Southwest Florida (16.0%), and Northeast Florida (0.3%). During the next six months,
demand for vacation rentals remained in decline. The hardest-hit regions were Alabama
Mississippi (29.0%), Southwest Florida (16.7%), Northwest Florida (10.7%),
Disney/Central East Florida (10.0%), and Central West Florida (7.5%). (Crotts et. al,
2013, p. 8).
This data is absolutely necessary in order to understand the magnitude of the economic decline in
one of the most critical areas of Floridas economy. This data also provides useful insight into

Deepwater Horizon 10
what the economy of Gulf States, as a whole can expect in the future should more risky drilling
endeavors take place in the Gulf region.
While the economic impacts of the oil spill certainly were devastating, the environmental
consequences of the spill in Florida are still being deciphered five years after the spill. Due to
some of the long-term environmental effects of the toxic chemicals present in the spilled oil, new
research is indicating far worse damage to the environment and human health than what was
previously understood. This is a profound implication given the original extent of the spill and
environmental damage provided by the National Oceanic and Atmospheric Administration, or
NOAA. This prediction is detailed in figure six below. It should be noted that the map provided
by NOAA was released only two days after the spill; therefore, long terms effects of the spill
would have been impossible to depict. Also, the percentages provided regarding shoreline threat
were referring strictly to the immediate threat of the spill, not the long term damage that the spill
imposed on the region.

Deepwater Horizon 11

Figure 6: (Crotts et. al, 2013, p. 7).

Figure 6 was accurate in terms of where the spills greatest oil concentrations would make
landfall. However, the figure was not able to highlight the long-term effects of the oils
environmental damage, especially regarding the toxicity of the oil. Luckily, new research by Dr.
Weisberg at the University Of South Florida Department Of Marine Science is picking up where
NOAA left off. In recent studies, Dr. Weisberg and his colleagues have conducted scathing
research into the long term effects of the oil spill and what the toxic elements of the oil mean for
both the environment and human health. According to Weisberg et. al (2014, p. 7), there is no
reason to believe that [BP] hydrocarbons beneath the surface, and hence not visible, did not
find their way to the west coast of Florida. They go on to state, the entire inner West Florida
Continental Shelf as far south as Sanibel Island, FL is bathed in tracer (2014, p. 8). Their
findings are modeled in the figure 7 below.

Deepwater Horizon 12

Figure 7: (Weisberg et. al, 2014, p. 10).

This data is a clear indication of the toxicity of the spill and its effects on Florida. The
potential human impact of this toxicity is worrisome. Their study goes on to detail the effects the
spill has had on fish in the gulf, much of which is collected for human consumption. In the study
they show a clear correlation between the spill area and lesions and diseases in fish present in the
most heavily impacted areas. This collection of data is modeled in Figure 8 below.

Figure 8: (Weisberg et. al, 2014, p. 11).

Deepwater Horizon 13
The amount of diseased fish collected in these areas is problematic and given the potential effects
these diseased fish could have on humans once again show the depth of destruction the capitalist
system will extricate upon its host in search for profit. Florida recently received 3.5 billion
dollars in total for the impacts of the spill; however, it is unclear if any of that money has been
delegated to the state in order to prepare for the long-term environmental and health impacts of
the spill (Orlando Sentinel, 2015).

Analysis and Discussion

As the Deepwater Horizon oil spill of 2010 indicates, the economic and environmental
risks the capitalist system is willing to take are increasingly dangerous. As the planets resources
continue to deplete, the system takes risks for profitable resources. This is an important concept
to understand in regards to the capitalist system as a whole, given that as these resources deplete
they become even more profitable for the system to harvest. This is best put by Coe et. al, (2013,
p.132) when they state:
Changing economic conditions can also turn a natural substance into a commodity,
sometimes very quickly. Knowledge about the usefulness of a substance might exist, and
the technology to obtain it might be available, but it might be just too expensive to extract
it as a tradable commodity. When circumstances change for example other supplies of the
substance run dry or demand increases, a part of nature can quickly become an important
resource
The last sentence is perhaps the most important concept to grasp. BPs adventurism into the gulf,
its lack of regulatory oversight, and the federal governments approval of the drilling to begin
with, all show that oil, along with various other resources, are dwindling while the capitalist
system continues to manufacture their demand. The system is forcing the public to rely on these
resources at virtually every level of society in order to reap lavish profits. The increasing
demands of these strapped resources are the byproduct of a system that thrives on overproduction
and overconsumption. Not to mention that increasing demand coupled with dwindling supply
correlates to immediate return of profits in the present. This of course is a problematic method of
profit making, since it ignores the future consequences of such methods. Strategies of profit
making such as this are embedded in the capitalist system, hence the economic and
environmental crises that have occurred consistently since its emergence.
As previously noted, the capitalist system must acquire profit in the short-term, it cannot
look to acquire wealth in the long-term. In an increasingly financialized economic system, in
which speculation and immediate shareholder wealth dominate the capitalist logic, the oil spill of
2010 should come as a shock to no one. The best way to put this into perspective is to analyze
the current environmental crisis. If the planets overall climate should pass the two degree

Deepwater Horizon 14
Celsius threshold the most severe effects of climate change will ravage the planet in ways that
could spell the end of humankind. To put into perspective the degree of planning required to
avert this crisis inventor Saul Griffith states:
[averting severe climate change] would require building the equivalent of all the
following: a hundred square meters of new-solar cells, fifty square meters of new solarthermal reflectors, and one Olympic swimming pools volume of genetically engineered
algae (for biofuels) every second for the next twenty-five years; one three-hundred-footdiameter wind turbine every five minutes; one hundred-megawatt geothermal-powered
steam turbine every eight hours; and one three-gigawatt nuclear power plant every
week. (Magdoff and Foster, 2011, p. 54)
This is a level of planning the capitalist system cannot commit to and has no interest in
accomplishing, due to the fact that it does not provide immediate shareholder wealth or
economic growth. This would be a daunting task, likely impossible, for even the most well
planned state economy. As the Deepwater Horizon spill shows, capitalism would rather gamble
with human life and livelihood for profit than commit to planning and preparing for a disaster
that will likely, in the end, bury their profits alive.
As our results indicate, overwhelming evidence supports the claim that BPs actions,
along with the capitalist system as a whole, are the result economic growth by any means
necessary regardless of the external cost. If our research has shown us anything, it is that we are
certain of the capitalist systems role in what Michael Hudson calls Killing the Host (2015),
the idea that as capitalism expands and grows it destroys the very means by which it reproduces
its own wealth, in BPs case, the planet. If we have learned anything in regards to our
shortcomings, it is that initially we gravely underestimated the extent to which the capitalist
system has environmentally and economically destroyed the planet. This is an important
realization to come to, given that our research focuses strictly on the BP oil spill. It is important
to understand that BP is merely one incident in the wealth of instances of capitalist exploitation.
Conclusion
If there is one aspect to this study that is absolutely essential to understand it is that the
root of the BP oil spill was in fact the neo-liberal system. This concept cannot be separated from
our analysis. To claim that BP was merely ran by bad capitalists that should be replaced with
good capitalists, would fail to get to the root cause of the current environmental and economic
crises of our time. By not identifying the root cause of BPs blunder in 2010 as an inherently
capitalist problem, we would not only be participating in intellectual negligence, but would also
fail to address the root of the BP disaster making any the research obsolete in terms of preparing
for future crises.
In beginning this analysis some of us began with beliefs about the capitalist system as
being either inherently bad, or reformable. Both of these were too general, as our study clearly
shows. The system clearly is not reformable, as indicated previously, in that reforms, such as
regulations and restrictions, are merely boundaries for which the system seeks to circumvent and
through its creative processes supersedes them overtime. Also to apply good or bad to the
system is inherently wrong given it provides an oversimplification of a very complex process
under which capitalism operates. Morals are not something the system has; it cannot make

Deepwater Horizon 15
cognitive decisions based on rationale and humanitys best interest. Nor does it intentionally seek
to do harm towards humanity. The fact of the matter is that the system only knows profit. It will
do whatever it needs to do to acquire wealth and whether its methods are deemed good or
bad is simply upon us to decide. Humanity must weigh the costs and the benefits of the
capitalist system and determine whether it has done more to help or harm us. We believe our
analysis shows the latter. As Luxemburg famously stated paraphrasing Engels Bourgeois society
stands at the crossroads, either transition to socialism or regression into barbarism. (1919). It is
time that we bury capitalism before it buries us. Another world is possible; it is up to us whether
we fight for that future.
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Deepwater Horizon Oil Spill. Vanderbilt Law Review, 64(6), 23-23. Retrieved November 3,
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Aldy, J. (2014). The Labor Market Impacts of the 2010 Deepwater Horizon Oil Spill and
Offshore Oil Drilling Moratorium. SSRN Electronic Journal SSRN Journal, 1-8. Retrieved
November 15, 2015
Allin, C. W. (2014). BP Deepwater Horizon oil spill. Salem Press Encyclopedia
Andersen et al. (n.d.). Oil Impacts on Coastal Wetlands: Implications for the Mississippi River
Delta Ecosystem after the Deepwater Horizon Oil Spill. Bioscience, 62(6), 562-574.
Coe, N., & Kelly, P. (2013). Economic Geography: A Contemporary Introduction (2nd ed., p.
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Research, 1-12. Doi:DOI: 10.1177/0047287513482775
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