Financial Implications of Hypothetical San Francisco Bay Oil Spill Scenarios: Response, Socioeconomic, and Natural Resource Damage Costs

Abstract

ABSTRACT This study provides a comprehensive examination of the use of trajectory modeling to estimate financial impacts of oil spills, including natural resource damages, response costs, and socioeconomic costs, as well as an opportunity to examine how spill size, oil type, response strategy, and probabilistic trajectory factors impact costs. The inclusion of NRDA, response, and socioeconomic costs in the modeling allows for an assessment of the relative proportion of NRDA costs to response and socioeconomic costs to further support the findings of past studies that refute the myth that NRDA costs are the overriding factors in most spill cases. The study demonstrates the overall financial and NRDA benefits of dispersant use. Estimated total bio-economic costs for oil spill scenarios involving four oil types and three spill sizes for two locations in San Francisco Bay, were modeled. Assuming present-day mechanical-only response, total costs range from $30 to $520 million. Estimated total bioeconomic costs would be reduced to $11 to $113 million if dispersants were used with high effectiveness. Dispersant use would reduce response costs, and if used effectively, could reduce NRDA and socioeconomic damages substantially, as both of these costs are driven by the amount of surface and shoreline oiling.