Analysis of Disruptions in the Gulf of Mexico Oil and Gas Industry Supply Chain and Related Economic Impacts

Abstract

Catastrophic events are human and economic tragedies in collaboration. Oil spills have enormous impacts on the local economy of the area and for the local labor markets. The Deepwater Horizon oil spill was caused by an explosion on semisubmersible drilling rig (Macondo) on April 20, 2010. Another regional disaster, Hurricane Katrina as it ripped over the core of the Gulf of Mexico producing zone, one of the most important oil and gas production region. With Geological complexities, continued of drilling and production in GoM increases the risk of having leak/spill. Therefore, the Econometrics methods, and Modeling to forecast impacts of potential disasters are utilized and conduct optimization modeling to capture key components for building reasonable supply chain models of actual situations for petroleum industry in order to make the best possible choices consequences of disaster in this dissertation,. The dynamic response of a different of industrial sectors in Louisiana to oil and gas disasters is considered. The likely magnitude of the net economic impact of a major oil spill (Macondo) will be determined in terms of jobs and wages with Vector Autoregressive method. Forecast the potential impacts of future changes in employment after disaster on economy will be studied. In the second part, the offsetting economic injection due to BP expenditures in the economy, will estimate by economic impact analysis method, which is Input-output models. Then the gross economic damage, which is created by BP oil spill will be calculated. The final results provide beneficial knowledge on determining the potential economic impact of future large-scale catastrophes and helpful for companies to react better to the economic impact of events. At the end, a mathematical framework will be presented for optimal network design of oil and gas supply chain with application for Louisiana Offshore Oil Port (LOOP); due to determine the optimal oil flow through the mid-stream/ downstream networks and its profit even if it is experiencing natural/ man-made damages. The outcome of this work is a new distributed decision support framework which is intended to help optimize the profit for critical energy zone and to boost economy under unpredictable situations.