The biggest short-term economic impact from the Gulf Coast oil spill would be if it disrupts shipping, said IHS Global Insight.
The economics firm said the impact on overall U.S. commerce will probably be small if responders can contain the spill quickly although “the impact on some local industries could be large.”
One of those regional industries, shipping, could affect broader transportation flows. “The biggest near-term risk from the oil spill is the potential for the disruption of shipping traffic in and out of the Port of New Orleans,” the group said.
“This could affect the barge, container and tanker traffic in the Mississippi Delta and on the Mississippi River. If traffic is affected for any extended period of time, then the prices of all types of commodities could rise, albeit probably temporarily.”
Reports say a full shutdown of shipping lanes is unlikely, but significant delays could develop if cargo ships must have oil washed off their hulls before moving upriver.
IHS Global Insight did not specify some of the ripple effects on freight networks, but disruptions at New Orleans could divert some cargoes such as export grain to other destinations.
For instance, it could push more Midwest farm shipments off barges and onto trains headed for West Coast ports, or onto ocean ships at Great Lakes ports that move into the Atlantic Ocean through the St. Lawrence Seaway. However, higher transportation costs of using alternative shipping lanes and ports could also price the loads out of the world market, delaying shipments until conditions improve.
Aside from possible effects on the supply chain, the firm said the spill can hurt the Gulf region’s fishing and tourism industries, depressing both direct and indirect incomes from that activity.
Fishing there is already hurt from a 10-day ban in effect so far. IHS said Gulf fishing generates annual dockside sales of $660 million, employs about 27,000 people in Louisiana alone and is second in size only to Alaska's fishing industry. If the closure lasts long enough, it could raise fish and shrimp prices nationwide.
Over time, “the clean-up itself will create activity and local income that offsets some of the local loss” in current income, IHS said.
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