10.2190/XEBW-UEVE-6V09-38K3 XEBWUEVE6V0938K3 73 ESTIMATION AND FORECAST OF OIL SPILL ACCIDENTS IN U.S. WATERS USING TRANSFER FUNCTION APPROACH 73 89 20050531 20050531 20050531 20050531 XEBWUEVE6V0938K3.pdf http://baywood.metapress.com/link.asp?target=contribution&id=XEBWUEVE6V0938K3 1 WILLIAMS O. OLATUBI Louisiana State University, Baton Rouge The environmental damages caused by oil spills and the costs to society of remedying such damages have raised the level of awareness of such pollution and the necessity to reduce their occurrences. As with the case with most accidents, it is very difficult to predict an oil spill event. However, with adequate data, this study has demonstrated that it is possible to generate a reasonable estimate of the aggregate number of future levels of oil spill incidents. An empirical model of the relationship between oil consumption and oil spill was developed using the familiar ARIMA framework. The results show that this type of model is useful in generating plausible estimate of levels of incidents and thus aid in the estimation of potential cleanup costs. The study estimates that annual average total cleanup up cost up to the year 2005 could be as low as $14 million and as high as $958 million in 1997 dollars. D. S. Etkin, Analysis of Oil Spill Trends in the United States and Worldwide, Proceedings of the 2001 International Oil Spill Conference: Response Issues, pp. 1292-1300, 2001. V. M. Grau and T. Groves, The Oil Spill Process: The Effects of Coast Guard Monitoring on Spills. Environmental and Resource Economics, 10:4, pp. 315-339, 1997. D. S. Etkin, Financial Costs of Oil Spills in the United States, Oil Spills Intelligence Report, Cutter Information Corp., Arlington, Massachusetts, 1998. N. H. Psaraftis, G. G. Tharakan, and A. Ceder, Optimal Response to Oil Spills: The Strategic Decision Case, Operations Research, 34:2, pp. 203-217, 1986. G. Rainey, The Risk of Oil Spills from the Transportation of Petroleum in the Gulf of Mexico, proceedings of the 11th Annual Gulf of Mexico Transfer Meeting, U.S. Department of the Interior, Mineral Management Service, New Orleans, Louisiana, 1990. Mineral Management Service (MMS), Oil-Spill Risk Analysis: Destine Dome Development and Production Plan, OCS Report, MMS 98-0037, U.S. Department of the Interior, MMS, Environmental Division, New Orleans, Louisiana, 1998. B. Onyekpe, Response-Predictive Model of Oil Spills in Aquatic Environments, Environmental Management and Health, 13:1, pp. 66-70, 2002. F. J. Trivez, A Short-Term Forecasting Model for Sectoral Regional Employment, Annals of Regional Science, 33, pp. 69-91, 1999. T. M. Fullerton, Jr. and R. Tinajero, Short-Run Price Dynamics in Mexico, Journal of Business and Economic Studies, 7:2, pp. 1-82, 2001. Energy Information Administration (EIA), U.S. Department of Energy, Petroleum Supply Monthly, Washington, D.C., 2002. R. T. Carson, R. C. Mitchell, W. M. Hanemann, R. J. Kopp, S. Presser, and P. A. Ruud, Study of Lost Passive Use Values Resulting from the Exxon Valdez Oil Spill, report submitted to the Attorney General of the State of Alaska, Anchorage, Alaska, 1992. R. W. Dumford and W. H. Desvousges, Oil Spill Liability: Recent Legal and Environmental Developments, paper presented at the Association of Environmental and Resource Economists, New Orleans, Louisiana, 1992. R. C. Mitchell, On Designing Constructed Markets in Valuation Surveys, Environmental and Resource Economics, 22:1/2, pp. 297-321, 2002. M. A. Cohen, Optimal Enforcement Strategy to Prevent Oil Spills: An Application of a Principal-Agent Model with 'Moral-Hazard,' Journal of Law and Economics, 30, pp. 23-51, 1987. E. E. Anderson and W. K. Talley, The Oil Spill Size of Tanker and Barge Accidents: Determinants and Policy Implications, Land Economics, 71:2, pp. 216-228, 1995. M. Viladrich-Grau and G. Theodore, The Oil Spills Process: The Effect of Coast Guard Monitoring on Oil Spills, Environmental and Resource Economics, 10:4, pp. 315-339, December 1997. J. M. Weber and R. E. Crew, Jr., Deterrence Theory and Marine Oil Spills: Do Coast Guard Civil Penalties Deter Pollution? Journal of Environmental Management, 58:3, pp. 161-168, 2000. G. E. Box and G. Jenkins, Time-Series Analysis, Forecasting and Control, Holden Day, San Francisco, 1970. L. Liu, Dynamic Relationship Analysis of US Gasoline and Crude Oil Prices, Journal of Forecasting, 10, pp. 521-547, 1991. W. Enders, T. Sandler, and G. Parise, An Econometric Analysis of the Impact of Terrorism on Tourism, Kyklos, 45:4, pp. 531-554, 1992.