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

By Stephen Gandel Thursday, July 08, 2010
    • Daymon Gardner for TIME

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

    In mid-May, Mark Miller set up shop in a vacant Kia auto dealership in Pascagoula, Miss. — an oceanfront city near the middle of the U.S. Gulf Coast. Unlike the previous tenant, though, he's not selling cars. He's in town to cash in on what has recently become — and will probably be for a while — the area's biggest industry: oil-spill cleanup. Miller has been in the environmental-remediation business for 39 years, and 2010 will likely be his best. "It's a huge event," he says of the Deepwater Horizon spill. "I'm very happy with the work I have."

    Miller Environmental Group, based in New York, has hired nearly 1,500 workers in the past month. The company has a fleet of vessels that suck up oil in shallow waters. It has crews in Florida and Mississippi cleaning up beaches and marshes. Other teams specialize in processing oil from boats that return from working the slick, so that they don't contaminate water around the docks or upstream. And like everyone else working the spill, Miller's company has laid boom — miles and miles of the floating orange lines that are supposed to contain oil once it rises to the surface.

    The oil spill that has been contaminating the Gulf of Mexico for more than two months is a nearly unequaled environmental catastrophe. And for a region that counts on fishing, tourism and, yes, oil to sustain it, the spill is an economic calamity as well. But disaster is also a business opportunity, and companies like Miller's are cleaning up by cleaning up. Exxon spent $4.3 billion in cleanup and legal costs after the 1989 Exxon Valdez spill in Alaska, the most expensive ever at the time. The Gulf disaster will easily eclipse that. Wall Street analysts have estimated that BP will spend $14 billion to $23 billion on the cleanup alone. BP has already put aside $20 billion in an escrow account to cover future damage claims.

    It adds up to a windfall for the dozens of companies that can provide ships, crews, equipment and expertise. Clean Harbors of Norwell, Mass., one of Miller's larger competitors, is expected to generate $300 million in sales from the Gulf spill in the next year alone. Waste Management of Houston, a large, publicly traded disposal company, has been hired by BP to cart away and landfill contaminated sand and other oily waste. The chemical company Nalco of Naperville, Ill., estimates it will sell $40 million worth of the dispersant Corexit, which BP has used heavily to break up oil in the water — up from about $2 million in typical annual sales.

    BP alone doesn't decide where the money goes. Each day, the company works with consultants to form an action plan subject to approval by the Coast Guard and state officials. An estimated 45,000 people are now working on the Gulf cleanup.

    The company set to get the biggest piece of that pie is a little-known firm set up in part by BP. In 1990, after the 11 million — gal. (42 million L) Exxon Valdez disaster, the federal government put in place regulations mandating that all oil and oil-shipping companies have spill-response plans and teams of workers on staff or on retainer ready to clean a spill. Instead of staffing up or hiring other firms to do the work, the giant oil companies formed their own response unit, Marine Spill Response Corp. (MSRC), to satisfy the new regulations. Perhaps unsurprisingly, 20 years later, the nonprofit MSRC has become the largest company in the oil-cleanup business. Its closest competition, National Response Corp. (NRC), typically focuses on tanker spills, though NRC too has been retained by BP.

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