Crude Accounting for the Gulf of Mexico Inc.

The author argues that traditional financial reporting fails to account for ecological risks and the value of nature, which can lead to catastrophic outcomes like the Deepwater Horizon spill. To address this, the paper proposes a mandatory 'Ecological Risk Section' in annual reports and a financial model where companies pay for insurance to cover a 'damage deposit' for the ecosystems they use. This approach aims to internalize environmental externalities, making nature's value compete with traditional metrics like return on investment (ROI) to influence corporate and regulatory behavior.

• The author asserts that ecological economists have created methods to value ecosystem services, but these values are ignored in business and government decisions because there is no established method to integrate them into traditional financial statements and regulatory reporting.
• Analysis of 2009 reports from BP PLC, Transocean, and Halliburton reveals a total absence of disclosure regarding the ecological risks of deep-water drilling in the Gulf of Mexico, despite the companies emphasizing their technical capabilities and sustainability.
• The 2008 report from the Minerals Management Service (MMS) to Congress failed to highlight risks associated with deep-water drilling or the Gulf of Mexico, focusing instead on administrative costs and revenues from the Royalty in Kind (RIK) Program.
• The author proposes a financial model where government regulators act as 'prudent landlords' requiring a damage deposit for ecosystems; the cost of insurance for this deposit would be booked in a company's traditional financial statements to reflect the risk of ecological catastrophe.
• The paper advocates for a mandatory 'Ecological Risk Section' in annual reports for companies economically dependent on large-scale ecosystems. This section would include data on physical characteristics, cumulative environmental effects, estimated costs of damage, and the capitalized value of ecosystem services.

APA

Rubenstein, D. B. (2010). Crude Accounting for the Gulf of Mexico Inc. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/crude_accounting_gulf_mexico.pdf

Chicago

Rubenstein, Daniel Blake. Crude Accounting for the Gulf of Mexico Inc. International Institute for Sustainable Development, 2010. https://www.iisd.org/system/files/publications/crude_accounting_gulf_mexico.pdf.

Wikipedia

{{cite report |last1=Rubenstein |first1=Daniel Blake |title=Crude Accounting for the Gulf of Mexico Inc. |publisher=International Institute for Sustainable Development |date=August 2010 |url=https://www.iisd.org/system/files/publications/crude_accounting_gulf_mexico.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rubenstein2010crude, author = {Rubenstein, Daniel Blake}, title = {{Crude Accounting for the Gulf of Mexico Inc.}}, institution = {International Institute for Sustainable Development}, year = {2010}, month = aug, url = {https://www.iisd.org/system/files/publications/crude_accounting_gulf_mexico.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }