Oil Spills,Workplace Safety and Firm Size: Evidence from the U.S. Gulf of Mexico OCS

Abstract

Accidents on offshore oil and gas platforms have declined dramatically during the past decade, yet concern about safety and environmental damages from offshore operations seems to have intensified. In the U.S. Gulf of Mexico, some of this concern is premised on an offshore restructuring caused by major oil and gas companies investing more heavily in exploration and production (E&P) in foreign countries, leaving more domestic E&P to smaller 'independents' assumed to be less careful and capable than majors. Both industry, and regulatory specialists believe this trend will increase the risk of accidents and oil spills. However, our analysis found no evidence that more independents would threaten workers' safety or the marine environment. In fact, on average independents had a slightly better record than the majors. We also found that the, Minerals Management Service's platform inspection program had a beneficial and statistically significant effect, decreasing both offshore accidents and oil' spills.

Keywords

Oil spills US Gulf of Mexico workplace safety oil industry

Get full access to this article

View all access options for this article.

References

Arnold

K. E.

Koszela

P. S.

(1990). “Improving Safety of Production Operations in the U.S. OCS.” World Oil July: 63-70.

Curlington

P. W.

(1986). “Safety Regulation and Workplace Injuries.” Southern Economic Journal (July 1986): 51-72.

Gachet

R. A.

(1993). “Gulf of Mexico Update:August 1989 June 1992.” Gas Energy Review (March 1993): 14-19.

Iledare

O. O.

Pulsipher

A. G.

Baumann

R. H.

(1995). “Effects of an Increasing Role for Independents on Petroleum Resource Development in the Gulf of Mexico OCS Region.” The Energy Journal 16(2): 59-76.

Maddala

G. S.

(1983). Limited Dependent and Qualitative Variables in Econometrics. Cambridge: Cambridge University Press.

Marine Board . (1990). Committee on Alternatives for Inspection of Outer Continental Shelf Operations, National Research Council. Alternatives for Inspecting Outer Continental Self Operations. Washington: National Academy Press.

Pindyck

R. S.

Rubinfeld

D. L.

(1991). Econometric Models & Economic Forecasts. New York: McGraw-Hill, Inc.

Pulsipher

A.G.

Iledare

O.O.

Baumann

R.H.

Mesyanzhinov

(1995). “Operating Performance and Environmental and Safety Risks: A Preliminary Comparison of Majors and Independents.” Offshore and Arctic Operations 1995 68: 219-228.

Pulsipher

A.G.

Iledare

O.O.

Baumann

R.H.

Mesyanzhinov

Dismukes

D.E.

(1996). “Comparing the Safety and Environmental Records of Firms Operating Offshore Platforms in the Gulf of Mexico.” Proceedings of the Energy Week ‘96 Conference Book III: 405-408.

10.

Trench

(1994). “The Future of U. S. Oil and Gas.” Oxford Energy Forum (August 1994): 2-4.

11.

Tobin

(1958). “Estimation of Relationships for Limited Dependent Variables.” Econometrica 26:24-36.

12.

U.S. Department of Energy, Energy Information Administration (1995). U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves 1994 Annual Report. Washington, DC.