BP Oil Disaster: 'Spillionaires' Cleaning Up On the Gulf Oil Spill

BP's Oil Disaster Means Lucrative Business Opportunities

July 30, 2010— -- Mark Miller, whose environmental clean-up firm has hired nearly 1,500 workers in the Gulf Coast in the past month, takes issue with the term "spillionaire" -- those who are cleaning up from the oil cleanup.

"There are probably companies or people who became 'oil spill' experts in the Gulf of Mexico the day the spill happened," said Miller, owner of the New York-based Miller Environmental Group, which was founded in 1971. "The 'spillionaire' term, which originated with the Exxon Valdez spill, was more geared towards the instant expert and instant contractor that capitalized on that event and really didn't come with the real structure and capability and experience."

Like the 1989 Exxon Valdez disaster in Alaska, British Petroleum's calamity in the Gulf of Mexico has turned into a lucrative business opportunity for many locals and outsiders. Exxon spent nearly $4.3 billion in cleanup and legal costs after that disaster, the most expensive at the time. Experts have estimated that BP will spend more than $20 billion on the cleanup alone, and that will mean a new generation of "spillionaires."

Gunnar Knapp, professor of economics at the University of Alaska in Anchorage, said the Exxon spill benefitted the financially-strapped state in hard economic terms, spawning a local oil-spill-cleanup industry. These oil cleanup entrepreneurs undoubtedly contributed to the state's 21 straight years of economic growth.

Driving along the Mississippi River during a visit to the Gulf region last May, Knapp said, the scene was eerily familiar.

"I saw things that were reminiscent," he said. "I saw big trucks carrying containment booms. I struck up a conversation with somebody who worked at a restaurant and they were working night and day feeding these cleanup crews. The economic impacts of these disasters are roughly proportional to the amount of money being spent."

That money is winding up in the hands of companies that can provide ships, crews, equipment, expertise and even the chemical dispersants used in the cleanup effort.

The British oil giant set up the "Vessels of Opportunity" program to hire local boat owners – mostly fishermen whose lives were interrupted by the disaster – to help with the cleanup. The pay is about $3,000 a day plus $300 a day per crew hand and the cost of fuel. This week BP had 1,584 "Vessels of Opportunity" working the disaster, according to the company website.

In May, Miller set up shop in a vacant Kia auto dealership in Mississippi. His firm initially responded with about two dozen people and a small fleet of vessels that sucked up oil in shallow waters. Soon he was supplying crews in Mississippi and Florida to clean up beaches and marshes. In the last month, he hired nearly 1,500 workers.

"There were people available who had skill sets that are very applicable to oil spills: boat operations, mechanically inclined people, folks who had local knowledge of the waters," he said. "By June, the demand came to basically double the resources. That's when we went full out looking to the local labor pool. We started screening people and set up a whole HR department to conduct interviews and background checks."

Miller would not reveal the value of the cleanup contracts his firm has received but said the extra work came after a decline in business in 2009. He believes the BP spill will transform the oil cleanup industry.

"There are a number of companies that are going to be flush with cash and I believe they're going to reinvest in capital equipment," he said. "I think they'll be expansions of offices and you're see companies that have not had the opportunity to participate in the spill becoming ripe for acquisition by the companies that have been involved. We are already looking at some opportunities for acquisitions."

Another firm benefiting from the disaster is Illinois-based Nalco, which makes Corexita, an EPA-approved dispersant being used to clean up the spill. Corexita breaks oil into particles that sink rather than wash up on shore and kill marine life. Under water, the particles are further dispersed naturally. BP has used roughly 1.8 million gallons of the product.

Despite criticism for Corexita's negative effect on marine life at the bottom of the ocean, Nalco stands to sell up to $85 million of the product for the clean-up effort, compared with typical annual sales of $2 million. This is a drop in the bucket considering the company's $4 billion in annual revenue, according to spokesman Charlie Pajor.

Still, Knapp said there are differences between the lightly- populated scene of the Alaska disaster and the tourism- and fishing-dependent Gulf Coast region.

"It seems like the Louisiana and Alabama and Mississippi coasts have more people who have been disrupted at least for a time from what they would normally be doing," he said. "All the money flowing into Alaska outweighed the money not flowing in from fishing. I don't know that's the case in the Gulf."