The BP oil spill could indirectly cause long term damage to the local environment, but may actually cause a boost for Bermuda's re/insurance sector.

Director of Environmental Protection Dr. Fred Ming said that while the likelihood of oil reaching our shores was slim, the long term effects could damage biodiversity in the Sargasso Sea.

Speaking at a meeting of the Sustainable Development Round Table last night at the Bermuda Underwater Exploration Institute, Dr. Ming said: "The Gulf of Mexico seeds the Sargasso Sea, which is a developmental area for many species. Game fish, turtles and several types of seabird all spend much of their lives in the sargassum, so any effect ... would ripple throughout the environment.

"In the area of biodiversity, there is the potential of a huge impact, but it's nothing we'll see immediately," he said.

Dr. Ming said that if any oil was to reach the Island, it would do so as tar balls, which are safer for the environment than the crude oil currently floating on the surface in the Gulf of Mexico.

On April 20, an explosion on an offshore drilling rig the Deepwater Horizon caused oil to flood into the Gulf. Millions of gallons have continued to leak from the site, despite efforts to stop the flow.

If oil or tar balls were to reach Bermudian waters, Dr. Ming said plans were in place to tackle the issue. Chemical dispersants and booms are on the Island and ready for use, and the Parks Department has a Beachcomber to help clear up any tar balls that reach shore.

"We're going to do the best we can to keep it from reaching the shores and if it does, we'll clean it up," he said.

AXIS Re CEO William Fischer estimated that the total payout for Bermudian companies would be around $2 billion.

"That's a big number," he said. "It's nothing to scoff at, but in terms of the kind of business most of these companies are doing, it's quite manageable.

"It also appears there will be an increase in the liability required and desired and, historically, every time there's been an increase in the liability required, it's been beneficial to the Island."

He also said Bermuda's role in insuring the disaster could discourage the US from passing laws that would hurt the industry.