ESTIMATION AND FORECAST OF OIL SPILL ACCIDENTS IN U.S. WATERS USING TRANSFER FUNCTION APPROACH

WILLIAMS O. OLATUBI

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DOI: 10.2190/XEBW-UEVE-6V09-38K3

Abstract

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.

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