BP slapped with lawsuits over oil spill
Fire boats battle a fire at the off-shore oil rig Deepwater Horizon in the Gulf of Mexico off the coast of Louisiana.
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Tess Vigeland: That massive oil slick from a platform explosion in the Gulf of Mexico is due to reach shore by the weekend. It has the potential to wreak havoc on the coastlines of four states. Cleanup crews are working to contain the spill, which is now bigger than the state of Rhode Island. The accident drove British Petroleum stock down almost 3 percent just today.
And as Sarah Gardner reports, the company's already been slapped with lawsuits.
SARAH GARDNER: How much this disaster will cost British Petroleum isn't clear. But families of workers killed in the explosion have sued not only Transocean, the company that operated the rig, but BP as well. BP's already taken full responsibility for shutting down the well and cleaning up the mess. Today the company said it was spending about $6 million a day battling the spill.
But oil expert David Pursell at Tudor, Pickering, Holt and Company says the costs will really climb if the oil hits land.
DAVID PURSELL: Oil hitting the marshland of south Louisiana would be, I think, more significant per foot of coastline soil than the Prince William Sound issue with the Exxon Valdez.
Pursell says that's because it's easier to clean oil off a rocky coast than marshland. BP doesn't carry insurance for this kind of disaster.
John Parry, oil analyst with John S. Herold Company, says that's not too surprising for a company earning billions a year.
JOHN PARRY: They're looking at the statistical odds of a spill and are willing to absorb a certain amount of expense should one occur.
Analysts say long term this disaster is more of a risk to BP's reputation than its bottom line. But Pursell says the stakes are high for the entire industry. Insurance premiums will go up for those oil companies that do carry it. The industry also now faces calls for more regulation and emboldened opposition in the U.S. to expanding offshore drilling.
I'm Sarah Gardner for Marketplace.