This year, the world marks the 12th anniversary of the Deepwater Horizon oil spill, the largest marine oil spill in US history. At the same time, the Ukraine invasion has motivated new oil and gas drilling. In addition to fossil fuel’s climate impact, oil spills cause marine pollution. This hurts marine life, especially fisheries. This is an important issue because fish provides about 17% of global animal protein intake.
How then to prevent these spills? Do stock markets punish firms for spills? We find that while BP’s Deepwater Horizon disaster caused long-term reputational harm, it didn’t depress BP’s stock price (or of other firms in the oil and gas industry). Thus, as offshore drilling acquires momentum, stock markets don’t seem to incentivize firms to install state-of-the-art measures to prevent oil spills. This is a serious issue because 30% of global oil is drilled offshore.
Here is the link for the piece published in The Regulatory Review:
If you want to read the academic paper on which this commentary is based, here's the URL:
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0268743