Oil spill: How much is a pelican worth?

pelican_oil_spill_052010.gi.top.jpgVeterinarians clean an oil-covered brown pelican earlier this week in Buras, Louisiana. By Steve Hargreaves, senior writer


NEW YORK (CNNMoney.com) -- Just how much is a dead pelican worth? BP is about to find out.

As the owner of the still-leaking oil well in the Gulf of Mexico, the oil giant will pay billions of dollars in damages, much of which will compensate for the birds, fish, mammals and plants that are killed by the accident.

Exxon paid nearly a billion dollars in damages into a wildlife conservation fund following the 1989 Valdez disaster, roughly a quarter of the company's entire tab for the spill.

"What BP might pay could be much higher," said Linwood Pendleton, director of the Ocean and Coastal Policy program at Duke University's Nicholas Institute.

Hundreds of biologists, rangers, and other wildlife experts have been dispatched to take inventory along the Gulf Coast. The official tally is tiny compared to the Valdez, but that's not the whole story.

Government wildlife experts said Tuesday the spill has killed 23 birds, and that 156 sea turtles and 12 dolphins have been found dead, but it's unclear if the turtles and dolphins were killed by the oil.

The Valdez disaster killed between 350,000 and 600,000 birds, along with thousands of sea otters and other marine creatures.

But experts say just as many animals are at risk in the Gulf. This disaster is still in its early stages; oil from the Valdez still lingers on the beaches of Prince William Sound. And unlike the Valdez, the BP spill happened 40 miles offshore, which means that a lot of the dead wildlife will end up on the ocean floor and can't be tracked.

"What concerns us most is the animals we can't see," Rowan Gould, acting director of the U.S. Fish and Wildlife Service, said during a press conference earlier this week. "They are foraging the same waters that are inundated with oil right now."

Fortunately, the government has a system in place to put a dollar figure on dead wildlife.

For example, if BP's oil spill kills 400 brown pelicans, wildlife experts will then look to replace 400 brown pelicans, said Roger Helm, head of environmental quality at the U.S. Fish and Wildlife Service.

They may do this, said Helm, by finding another colony of brown pelicans along the Gulf Coast that is threatened by predators - say, rats.

Wildlife experts will then calculate how much money it will cost to kill enough rats in order to permit the pelican population to survive, and to grow by 400. That dollar figure will be billed to BP will get, said Helm.

This approach can be used to calculate the cost of replacing plants and beaches as well.

If the spill makes three acres of wetlands unproductive, then the government will create three acres of wetlands elsewhere in the Gulf with a series of dams and dredging. If a beach is inaccessible for fishermen, then BP will have to pay to build a boardwalk so a nearby beach can be used instead.

Duke's Pendleton said that's a key reason BP (BP) may pay more than Exxon (XOM, Fortune 500).

"People actively use wildlife in the Gulf. They go fishing, hunting, bird watching," he said. Prince William Sound, in contrast, was relatively deserted.

Helm said it's impossible to estimate how much this will ultimately cost BP, especially given that oil is just beginning to wash ashore. BP declined to comment on the cost.

As of now, with oil just beginning to wash up, the impact has been small.

But personnel from the Fish and Wildlife Service, the National Park Service, the National Marine Fisheries Service, state environmental agencies, and outside contractors are already at work -- on BP's dime, -- trying to determine a baseline from which to measure damages, said Helm. And they'll continue to monitor the region for several years, he added.

This is a much more systematic approach to putting a dollar figure on damaged wildlife than anything that went on after the Exxon Valdez spill.

Back then, the government made its calculation by tallying up all the dead animals and asking regular people how much they would pay to keep them alive, according to Thomas Campbell, one of the government's lead attorneys during the Valdez spill and now a partner at the law firm Pillsbury. The total came to over $3 billion. Exxon, rather than going to court, settled for a billion dollars.

That money has gone to various trust funds administered by the State of Alaska and the federal government. Some of it has been well spent on conservation projects, said Campbell, but much of it has also gone to administrative costs.

But Campbell is hopeful that the Gulf Coast, which has been environmentally compromised by decades of industrial development and punishing storms, will give the government more of a chance to spend the money on conservation rather than administration.

"There are good ways to spend this, rather than give a bunch of money to bureaucrats to buy pickup trucks and build libraries," he said.  To top of page

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