Cleaning Up on the Oil Spill: Who's Making Money?

A disaster is also an opportunity. And for environmental-services firms, BP's Gulf blowout is an absolute gusher

  • Daymon Gardner for TIME

    A Miller environmental team scour Mississippi's sands for beached oil.

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    In the Gulf, MSRC has 10 large skimmer-equipped boats, with two more on the way, each 210 ft. (64 m) long and capable of siphoning up to 4,000 gal. (15,000 L) of oil off the water's surface. The company also has two oil barges in the region to store the collected oil, an airplane to drop dispersant on the slick and a fleet of smaller vessels to deploy boom or move workers. It has 250 full-time employees in the Gulf and has had as many as 7,000 workers on contract at times during the past two months. Despite its relative size in the remediation business, MSRC doesn't typically make a lot of money, because big spills are rare. In an ordinary year, MSRC has about $90 million in revenue. Most of it comes from annual dues the oil companies pay, enough to keep MSRC and its fleet ready to respond. BP's portion, for instance, was about $11 million last year. That's just the retainer. When a spill happens, oil companies have to pay up. The large skimmers alone cost as much as $40,000 per day to operate. With 10 skimmers active for much of the past two months, BP is already looking at a bill of at least $24 million from MSRC — nearly as much as MSRC booked in services with all the oil companies in 2007 and '08 combined. BP won't benefit directly from the banner year it has created for MSRC, but a portion of what it pays the company will be credited against future annual dues.

    In addition to operating boats, MSRC acts as the oil industry's general contractor, doling out work to subcontractors as needed. MSRC's CEO, Steve Benz, says that with most spills, his company can handle 80% of the work. But the magnitude of the Gulf disaster has flipped that equation. "Billions and billions of dollars of work will be going to our subcontractors," says Benz, who joined MSRC from BP in 1996. "It's going to be a very good year for them."

    One of MSRC's largest subcontractors is Clean Harbors. The company has 2,000 people on its payroll around the Gulf, cleaning beaches and marshland. Scott Metzger, who is heading up Clean Harbors' efforts in the Gulf, has spent nearly every day since the end of April in the region, only occasionally heading home to Plymouth, Mass., to "recharge."

    Metzger says his company typically responds to about 2,500 incidents a year. Some jobs are as small as handling what comes out of a transformer on a utility pole when it overheats, about 11 gal. (42 L). The Gulf spill — the latest estimate puts it at 74 million to 145 million gal. (280 million to 549 million L) — is the largest Metzger has ever seen. "Each of these unique environments requires different techniques," he says. "You have to be careful not to cause more damage than if you just left the oil where it was."

    Even companies far north of the Gulf region are benefiting. Before the spill, Elastec/American Marine, based in Carmi, Ill., had the largest inventory of oil boom in the country — 44,350 ft. (13,500 m). It sold out. The company is rapidly manufacturing more and now has orders for an additional 300,000 ft. (91,000 m). Besides boom, Elastec, founded in 1990, makes handheld skimmers that lift oil out of the ocean and separate it from water. The company's specialty is a drum-shaped skimmer, which Elastec executives say captures more oil and less seawater than other devices. The skimmers, along with air tanks to make them work and storage containers for the oil, can cost as much as $50,000 each. Orders are pouring in. "We have our factory working two 10-hour shifts a day, six days a week," says Jeff Bohleber, Elastec's chief financial officer. "We are already set to double our typical annual revenue, and we will probably exceed that. It's the best year we've ever had."

    Miller, despite having spent his life in the environmental-cleanup industry, has long been a skeptic of the business. You spend a lot of time waiting around for work, he says. But the BP spill may change all that. Clearly, there is a need to be more prepared for oil spills, especially big ones. The Exxon Valdez spill led to regulations that benefited the spill-response industry. This disaster is likely to as well. "There are going to be opportunities for expansion and more research and development," says Miller. "This event is going to have a substantial impact on the industry." That means the dollars for Miller and others will continue to flow long after this oil has been mopped up. It's what you might call a spillover effect.

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