The economy of oil spills: Direct and indirect costs as a function of spill size

Abstract

As a rational basis for addressing both ecological and economic consequences of oil spills, a combination of simulating and estimating methods is proposed in this paper. An integration of the state-of-the-art oil spill contingency simulation system OSCAR™ with economic assessment method leads to realistic oil spill scenarios including their biological and economic impacts and the effort taken for combat as well as to an estimate for the total oil spill costs. In order to derive a simple function of total costs depending on few spill characteristics such as size, a number of hypothetical scenarios are simulated and evaluated for the German North Sea area. Results reveal that response costs of per unit oil spilled as well as integrated costs of oil released are simply characterized as two particular power-law functions of spill size. Such relationships can be straightforward transferred into decision making for efficient prevention and combat strategy in the study area.