The Socio‐Economic Impact of the Deep Horizon Oil Spill in the Gulf Coast Region

The Socio‐Economic Impact of the Deep Horizon Oil Spill in the Gulf Coast Region DeMond Miller, PhD Rowan University A presentation at the Energy Issues and Challenges ­ Post BP Oil Spill Part II of GIC’s Three Part Energy Conference Temple CIBER, Fox School of Business and the Global Interdependence Center Federal Reserve Bank of Philadelphia September 22, 2010

The Human‐Environment Relationship

Understanding the relationship between the human experience and the environment is a challenge. The relationship between individuals, their units of social organization, and the environment also poses a complex area for social science research given the interdisciplinary nature of this endeavor.

Draft 1 (8/20)

The Human‐Environment Relationship & Disasters From an ecological perspective, natural disasters rarely result in long-term disruptions of the relationship between a community and its biophysical environments, while a community’s built and modified environments frequently sustain loss. On the one hand, technological disasters routinely disrupt the exchange between human settlements and their natural or bio-physical environments, in many cases resulting in relatively little or no damage to built and modified environments. (KrollSmith and Couch, 1991, p. 362)

Social Psychological and Economic Impacts (to understand and quantify‌) The specific social impacts considered were social disruption (personal, family, work and community settings) and psychological stress (intrusive stress and avoidance behavior)

A Proposal: To View Parts of the Highly Complex and Diverse Gulf Region as a Natural Resource Community (NRC) The Natural Resource Community The NRC is uniquely characterized by a traditional dependence on the utilization of renewable natural resources. The relationship between community cultural activities and resource utilization provides a dynamic pattern that links human behavior to the ecosystem. This relationship is conceptualized in terms of a seasonal anticipatory utilization cycle (AUC) –it is here where life and economy are linked…

Source: http://www.nbii.gov/CSWGC

NRCs: Links to Community & Economy The NRC model depicts the interaction between cultural and biological cycles. The cultural cycle is divided into four phases:

1) preparation 2) harvesting 3) utilization 4) anticipation

Ambiguity of biophysical damage should be most intense when industrial technology and technological cultural intrusion or “cultural pollution” is greatest (Freudenburg and Jones 1991). The oil spill cleanup also contributed a considerable degree of “cultural pollution.”

This can be considered “pollution” in an NRC in the sense that it is not a normative product of traditional life-styles.

The patterns of disruption from the oil spill may change in terms of source and intensity. The following are examples of characteristics of long-term impacts of technological disasters for NRCs. Family, workplace and general community disruption may increase.

Occupational roles and the identity of the community are intimately related to resource use.

Uncertainty generated by the spill regarding the status and future use of this resource may have negative consequences well into the future.

Social Vulnerability‐vs‐ Individual and Community Economic Impacts Social Vulnerability • The social vulnerability perspective refers to people’s “capacity to anticipate, cope with, resist and recover from the impacts of a natural hazard” (Wisner, Blakie, Canon & Davis, 2004, p. 11)--social vulnerability refers to their susceptibility to behavioral changes. As will be discussed in greater detail below, these consist of psychological, demographic, economic, and political impacts.

• Central to the social vulnerability perspective is that susceptibility to hazards varies across communities and individuals (or house units) within communities. It is the variability in vulnerability where some communities have groups with the higher levels of social vulnerability.

Economic Impacts • Disaster losses in the United States are initially borne by the affected households, businesses, and local government agencies whose property is damaged and unusable or destroyed, or image destroyed (such as the perception of risk in the media).

• However, some of these losses are redistributed during the disaster recovery process. There have been many attempts to estimate the magnitude of direct losses from individual disasters and the annual average losses from particular types of hazards—but fewer attempts to quantify the long-term impacts on individuals, communities, and economic sectors such as tourism?)

• For example, a reduction in consumption or a reduction in investment, loss of specific mechanisms for indirect economic losses, as well as indirect losses that arise from the interdependence of community subunits (immediate and future losses).

• Cost for local government (immediate and future costs-including loss of tax revenue) .

Worst Cases and Implications “For the economies of coastal states, a worst-case leakage scenario would be utterly devastating. Not only the fishing industry, but the oil industry as well would be fatally crippled due to the disruption of operations at refineries. Shipping via the Mississippi River, which handles 60 percent of all U.S. grain exports, could be imperiled since the Port of South Louisiana, the largest bulk cargo port in the world, might have to be closed if ships are unable to operate in oil-drenched waters. Unemployment in the region would soar and economic refugees would scatter in all directions “(Heinberg 2010).

An oil�stained future

Where do we go from here?

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References Dyer, C, Gill, D. A., and Picou, J. S. (1992). Social Disruption and the Exxon Valdez Oil Spill: Alaska Natives in a Natural Resource Community. Sociological Spectrum 12: 105-126.

Freudenburg W. R., and Jones T., R. (1991). Attitudes and Stress in the Presence of Technological Risk: A Test of the Supreme Court Hypothesis. Social Forces 69: 1143-1168.

Heinberg, R (2010). Deepwater Horizon: The Worst-Case Scenario. http://www.globalresearch.ca/index.php?context=va&aid=19850 Kroll-Smith, S. and Couch, S. R. (1991). Technological Hazards, Adaptation and Social Change. In S. R. Couch and J. S. Kroll-Smith (eds) Communities at Risk. Lang. New York.

Picou, J. S. , Gill, D. A., Dyer, C., and Curry, E. (1992). Disruption and Stress in an Alaskan Fishing Community: Initial and Continuing Impacts of the Exxon Valdez Oil Spill. Industrial Crisis Quarterly 6: 235-257.