It now appears that the Gulf oil spill was the largest in history. A statement released by the Deepwater Horizon Incident Joint Information Center on August 2 says “at the beginning of the spill, 62,000 barrels of oil per day were leaking from the well.” The figure dropped some to 53,000 barrels of oil per day just before the well was capped. The researchers said the margin of error on the numbers was plus or minus 10%.

Overall, the scientific teams estimate that about 4.9 million barrels of oil gushed from the well. The team says  BP plc  (NYSE: BP) “captured approximately 800,000 barrels of oil prior to the capping of the well.”

The estimated amount would make it the largest offshore oil spill in history.Bloomberg reports that the previous record was “the 1991 Persian Gulf War when retreating Iraqi forces opened oil pumps, causing the release of 6 million barrels, according to the U.S. Environmental Protection Agency.”

BP may be liable for each gallon of oil that made it into the water.The amount of that liability could be $4,300 per barrel. There are 42 gallons in a barrel. The liabilities related to penalties which would be paid to the US government could reach into the billions of dollars. That is on top of the lawsuits that will be brought by local residents and businesses and clean-up costs which BP estimates are already over $3 billion. The US government and BP have set up a $20 billion escrow account to cover costs related to the catastrophe.

BP’s liabilities may be growing, which makes it more likely that the company will continue selling assets and raising money in the global capital markets. The UK-based firm will emerge from this period as a smaller company, and its may take decades for all the legal actions against the company to end.

The news of the size of the spill once again raises the question of why the world’s best scientists and oil company experts could not come up with a solution for stopping the flow in less than the 87 days that it took and why the industry was so ill-prepared. A consortium led by Exxon Mobil (NYSE: XOM) will begin to create a rapid response team for similar spills. But, the limits of science were on display from the day that the Deepwater Horizon exploded.

Douglas A. McIntyre

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.