Here is an astounding quote from The Washington Post article by Joel Achenbach:
More trouble: A tropical wave has formed in the Caribbean and could conceivably blow through the gulf.
"We're going to have to evacuate the gulf states," said Matt Simmons, founder of Simmons and Co., an oil investment firm and, since the April 20 blowout, the unflagging source of end-of-the-world predictions. "Can you imagine evacuating 20 million people? . . . This story is 80 times worse than I thought."
If the cost of such action were $1,000 per person, there goes the $20 billion escrow fund committed by BP plc (BP). We get to $1,000 per person if we spend an average of $33 per day for 30 days. And that does not include the decontamination costs for cleaning the oil from the environment after it is scattered over the interiors of several states.
Such a broad evacuation does not seem likely to me, at least not from a normal season of hurricanes and tropical storms. However, it certainly is not an impossible eventuality, particularly if the oil remains distributed throughout the Gulf for several years and evacuations with clean ups become a repeated occurrence.
In such a case, $20 billion does indeed become a down payment for remediation and compensation, a small down payment.
Disclosure: No positions.