I just reviewed my post from last Sunday entitled "Dumb Economists".At the end I wondered what the unknown factor would be that would trigger the economy to plunge over the cliff.I think the gulf oil disaster just may be the answer.
Little by little,we are finding out more about the true scale of this disaster.Unless they pull a rabbit out of their hat in short order,it appears we are witnessing the greatest environmental and subsequent economic disaster of our time.Check out this link for a possible outcome-http://pesn.com/2010/05/02/9501643_Mother_of_all_gushers_could_kill_Earths_oceans/.As always,we must consider the source as people have agendas and may simply be trying to furthur their own cause which in this case is alternative energy,but it certainly is eye-opening.
Fear mongering?Not when the sources are scientists,not conspiracy theorists.There certainly is no consensus on the release rate of the crude oil.Estimates range from 5,000 barrels a day and up.There is a very real possibility that the sand mixed with the crude is disintegrating the well casing under fantastic pressure.If the wellhead blows,the open well may release an estimated 100,000 barrels per day.That's 4.2 million gallons per day!
It's estimated that drilling the relief well to intersect the well casing to seal it underneath the seabed will take months.What is clear is that no matter how or when or if they seal it,the damage will be astronomical.Some projections are already out for $100 a barrel oil by the end of the week.I've also read that current demand only dictates oil in the $60 a barrel range,so a supply shortage can be absorbed for some time.Take your chances.
It simply doesn't take wild speculation to see that even moderate consequences from this will result in long-term detrimental effects on commercial fishing and the very sensitive biology of the gulf coast.Ocean currents may even spread the problem globally just as how a volcanic ash fallout can traverse the entire globe.
Here is another link to a story that contains many photos of the accident-http://wattsupwiththat.com/2010/05/01/the-gulf-oil-rig-explosion-on-the-scene-photos/.
We are set-up for a chain reaction event that could deliver a kick to the fragile economy that it can't absorb.Still early and much is only speculation,but we may see a drastically different landscape by Memorial Day.The Memorial may be for our economy.Let's hope this entire event is overblown as is often the case,but the fact is that after 20 years Alaska is still dealing with the after effects of the Exxon-Valdez disaster.More to come...