Economic damages from a worst-case oil spill in the Straits of Mackinac

Abstract

This paper presents research on the economic damages from a hypothetical worst-case oil spill at the Straits of Mackinac between Lakes Huron and Michigan. This spill could occur because the Enbridge Line 5 oil pipeline traverses the Straits between Michigan's Upper and Lower Peninsula. We quantify potential economic damages to outdoor recreation, commercial fishing, shipping, residential properties, and energy and water supplies. Damages are estimated for two spill scenarios occurring at the onset of the summer tourism season with extensive shoreline oiling. Using evidence from past spills, economic damages would last for between one and two years and would affect locations on the periphery of the spill area, depending on the activity. We project the loss from the worst-case scenario would be at least $1.3 billion.