At this writing, BP had placed a tighter fitting collar over their damaged exploratory oil well in the Gulf of Mexico. Tests are pending to determine whether this latest effort will stop the massive dumping of oil into what use to be, one of the world's most productive fisheries and most desired tourist regions. Needless to say, the tragic accident on April 20 this year is a real "game changer" for many people in the U.S. and around the world. No one really knows what the new game going forward will be like because the effects will most likely be multiple and, in many cases, subtle.

Obviously, domestic US production of oil will become more regulated and costly. And, this fact could very well cause many people to pay more for petroleum down the road. The seafood from the area will be less and that that is commercially available will be much more thoroughly inspected. Real estate values and the tourist industries up and down the Gulf and parts of the Atlantic US coasts will most likely be affected either positively or negatively, depending on where the released oil comes ashore.

However, to put some of the real BP oil spill issues into proper perspective, I think it may be insightful to discuss the concept of "externalities." An economist might define externalities as "the impact of one person's or company's actions on the well-being of bystanders" (taken, in most part, from Principles of Macroeconomics by Mankiw).

Most Americans (and many other world citizens) consume vast amounts of petroleum products in the course of their daily lives. BP has merely been responding to market signals; albeit, perhaps in reckless and unacceptable ways. There is no place on Earth where man has drilled for oil and not left environmental damage and, in many cases, made a real mess. Look at the oil fields in Nigeria, Indonesia and the Middle East. In the U.S., the canals dredged through otherwise fresh water swamps that are necessary to transport heavy oil field equipment into marches also allow for salt water encroachment. There are also miles of board roads constructed across low lands to get workers and equipment to drilling sites and there are countless ponds of complex, unnatural and anything but inert chemical mixtures of "drilling mud" left behind after the drilling is over.

In 1979, Ixtoc I experienced a blowout accident similar to the current BP incident in the Gulf of Mexico. This was another exploratory off-shore oil well owned and operated by Pemex, the Mexican national oil company. Ixtoc I discharged oil for almost 11 months before it was capped and it was in only 170 feet of water instead of the 5,000 feet of water of the recent BP disaster. Technology has improved during the last 31 years, but obviously not enough.

The Montara oil spill in 2009, near an Indonesian island, but in Australian waters was another similar incident. It is considered one of Australia's worst oil disasters. In the U.S., there are over 27,000 abandoned oil wells in the Gulf of Mexico. Some are over 60 years old with seals that are surely corroded and near failure. Apparently there is little or no attention being directed to monitoring and preventing these wells from leaking oil and/or gas now or in the future.

If there is going to exploration for and production of crude oil, we must be willing to accept some level of environmental degradation. That is a fact. Now, the real question is, "What trade-off between oil and environment are we willing to accept?" I think the BP event will change the answer to that question – not only in the U.S., but in other parts of the world as well. In the process of deciding a better balance, maybe we should all become a little more aware of the "externalities" associated with our own individual ways of life.

Dr. Claggett is a columnist with China.org.cn. For more information please visit: http://www.jhzsvip.com/opinion/node_7078635.htm