About Emily Holbrook

Emily Holbrook is a former editor of the Risk Management Monitor and Risk Management magazine. You can read more of her writing at EmilyHolbrook.com.
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Oil Leak Could Take 90 Days to Repair

Oil has been spewing out into the Gulf of Mexico at an alarming rate soon after the oil rig, The Deepwater Horizon, first sank on April 20. Since then, an estimated 5,000 gallons barrels per day have been let loose into the Gulf, polluting ecosystems and putting commercial fisherman out of work. It is a situation that worsens with every day that passes.

Speaking on the Sunday morning television circuit, Interior Secretary Ken Salazar said it could be 90 days before federal officials and BP, which was leasing the well when a fire broke out April 20, manage to stanch the oil–although he also said it could be stopped much sooner.

Much sooner, only if BP is able to quickly fabricate giant steel domes to be placed over the leaks, and only if the robots responsible for placing the domes can successfully do so in extremely murky conditions where visibility is limited. If this process is not completed soon, this will end up being the worst oil spill in American history, even eclipsing the Exxon Valdez incident in 1989. The local paper of New Orleans, The Times-Picayune, has a great animation of oil spill here.

This incident comes at a bad time for the Obama administration. He recently signed a bill allowing an increase in offshore drilling — and as exploratory drilling increases, accidents like these are likely to follow. Obama visited southeast New Orleans yesterday, telling those listening that, “BP is responsible for this leak. BP will be paying the bill. But as president of the United States, I’m going to spare no effort to respond to this crisis for as long as it continues.”

But Obama may have a larger crisis on his hands than he immediately realizes. As New York Times opinion column writer Stephen J. Dubner put it:

Could the Gulf disaster be just the kind of tragic, visible, easy-to-comprehend event that crystallizes the already-growing rush to de-petroleum our economy? As with TMI [Three Mile Island], it won’t do much to change the facts on the ground about how energy is made. But as we’ve seen before, public sentiment can generate an awful lot of energy on its own, for better or worse.

Comparing this oil spill, and the reaction that follows, to what happened on Three Mile Island may be a bit of exaggeration . . . or maybe not. We will wait and see.

Class Action Suit Filed Over Oil Spill

It started with the explosion of an exploratory drilling rig on April 20th off the coast of Louisiana. That event has spawned what some are calling a “Valdez-like oil spill.” The U.S. Coast Guard has said that oil is escaping from the well at a rate of about 5,000 barrels a day and Louisiana Governor Bobby Jindal has declared a state of emergency and requested aid for commercial fishermen.

Jindal, a Republican, also requested federal funding for 90 days of military duty for as many as 6,000 National Guard troops and demanded extra oil barriers from BP and the U.

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S. Coast Guard to protect wildlife reserves that nurture a $1.8 billion seafood industry, the richest in the U.S. behind Alaska.

And it’s the members of Louisiana’s seafood industry who are taking action against those responsible — class action that is.

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Shrimpers and fishermen filed suit Wednesday against BP and Transocean Ltd. claiming, and rightfully so, that the oil spill is hurting their livelihood. The suit, Cooper v. BP plc, claims that the defendants “knew of the dangers associated with deep water drilling and failed to take appropriate measures to prevent damage.” The suit was filed on behalf of Louisiana fishermen, commercial boaters and shrimpers, but is likely to spread as the oil slick starts does, effecting the offshore industries of other coastal states such as Alabama, Texas, Mississippi and, eventually, Florida.

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The insurance industry will also take a severe hit from this mega-spill. As PartnerRe has stated:

The ultimate insured loss for this event is unclear given the multiple parties involved and the on-going situation regarding control of the oil spill. The Company [PartnerRe] estimates that insured losses from the explosion have the potential to exceed $1 billion. Given current information, the Company expects its second quarter 2010 results will include claims relating to the explosion in the range of $60-$70 million. These losses are expected to be contained primarily within the Global Specialty and PARIS RE sub-segments.

So far, efforts to shut down the well have failed and though a partial burning of the slick was successful, the oil continues to spew at an alarming rate from miles beneath the water’s surface. At the current rate of leakage, the volume of oil released “would exceed Alaska’s 1989 Exxon Valdez accident by the third week of June.” If something is not done quickly, we may be facing the largest oil spill in history. A scary thought.

RIMS Canada Can Throw a Party!

Being at the RIMS Annual Conference, you are faced with many tough decisions — like which event to attend after the Exhibit Hall closes for the day.

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Last night we were lucky enough to make it to the RIMS Canada reception and as the headline says, the great white north knows how to throw a party.

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Along with air hockey, delicious food and Canadian mounties, there was great music and frivolity.

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For your viewing enjoyment, a few pics:

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The Risks of Social Media: Pseudonyms on the Internet

One of the coolest things about working from the press room at the RIMS Annual Conference is the ample amount of press releases available to journalists and other media professionals.

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Various companies in the risk and insurance industry are eager to spread the news of their new surveys, studies or products, and it shows — I’m currently looking at tables filled with Chubb, FM Global, AIR Worldwide, etc.

One study from Chubb that caught my eye stated that many don’t use their real name on the internet.

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In fact, the study says only 51% always use their real name.

I questioned why this would be of any concern and I was met with a great quote.

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“Twitter, Facebook and Foursquare have created new social media risks and an environment where many people don’t know who they are talking to online,” said Kenneth Goldstein, worldwide media liability manager at Chubb. “They don’t realize who can see their location, creating many exposures for individuals and companies.”

Some interesting stats from the study:

  • 66% of respondents said they would not use mobile technology that shows people on social networking sites where they are located
  • 20% of respondents said they have shared a negative product or service experience with others on Facebook, YouTube or other social networking sites
  • 64% of respondents said the company had no policy for talking about the company on social networking sites

This is just another aspect of social media risks that we continue to write about (check out past posts on the topic). And of course, check back later for more posts from RIMS 2010.