The explosion on April 20 aboard the Deepwater Horizon, a drilling rig working on a well for the oil company BP one mile below the surface of the Gulf of Mexico, led to the largest accidental oil spill in history. It was not until July 15 – 86 days after the explosion – that it appeared that the oil had stopped gushing into the gulf, but not until 5 million barrels (275 million gallons) of oil had devastated the fragile ecosystem of the Gulf.

The immediate damage to the wildlife and wetlands along the Gulf make well take decades to eradicate and some ecologists are now suggesting that this largest oil spill in history has permanently damaged large portions of the Gulf Coast.

While it may take generations to completely calculate the environmental damage, fairly reliable estimates are now coming to light on the damage to employment caused by the BP oil spill.

According to documents released by the Wall Street Journal on August 22, as well as previous estimates of the U.S. Department of Labor and state employment agencies, approximately 100,000 jobs may be lost due to the oil spill. Tens of thousands of commercial fishermen have been unable to work during the spill, a suspension that many may simply not recover from. But it is not only the fishermen that have been impacted, of course. Companies that provide services to the fishermen, foods processing companies, even restaurants and other support services for offshore oil exploration have seen their business all but disappear. Many of these businesses, already barely hanging on during the Great Recession, may simply be unable to weather this latest setback and close entirely.

The Obama Administration has imposed a six-month ban on deepwater drilling in the Gulf until such time as safety and environmental protections can be evaluated. Many of the drill rigs that were in the Gulf have been moved to other parts of the globe, and it may be years before these drill rigs will be able to return to the Gulf even if the ban is lifted as scheduled. The Wall Street Journal reported that Michael Bromwich, the newly appointed top regulator on offshore oil exploration for the Department of the Interior reported to Interior Secretary Ken Salazar that the ban on offshore drilling will cost in either direct and indirect employment at least 23,000 jobs directly attributable to the oil drilling ban. While the ban on offshore drilling is scheduled to expire in late November, this does not mean that these 23,000 jobs will return because, as has been noted above many of the rigs have moved to other parts of the world where they may remain for years as they drill at locations not off the U.S. coastline.

Gulf state officials have estimated about 80,000 jobs in their states in support services to oil drilling, accommodation and food industries, and other private sector jobs are probably lost forever due to the crisis in the Gulf. The June 2008 unemployment rates for the States along the Gulf were as follows: Florida, 11.5%; Alabama, 9.7%; Mississippi, 10.8%; Louisiana 7.2%. These rates are expected to rise as more and more businesses, unable to survive the dramatic downturn in business close for good.

While BP has employed thousands of Gulf Coast residents to assist in clean up efforts, those temporary jobs, which usually paid only a fraction of what the workers previously made, are winding down. BP has also set aside a $20 billion fund to reimburse individuals for losses related to the oil spill. Although this fund is now being overseen by Kenneth Fienberg, who was responsible for overseeing payments to victims of the 911 terrorist attacks, and whose appointment was insisted upon by the federal government, already complaints are being heard about a cumbersome and difficulty process to get legitimate claims paid quickly enough to save struggling businesses. Furthermore, while the fund is intended to pay costs directly resulted to the spill there is no provision for future lost income either to individuals or to businesses that had to permanently close.

The lost of 100,000 jobs along the already economically depressed Gulf Coast will only server to increase the spiraling unemployment. To help put into perspective this devastating loss of 100,000 jobs, in the month of July the entire U.S. economy generated 12,000 new private sector jobs nationwide.

A long time owner of a shop catering to sports fishermen in Mississippi who had to permanently close due to lack of business perhaps put it best when he recently told The New York Times, “This damn spill did not just destroy our way of life, in a lot of cases it destroyed our life.”

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