1

Modelling the impact of OPA 90 and double hull technology

on oil spill numbers

David GlenLondon Metropolitan University

Presented to IMSF Annual ConferenceGdansk, April 2008

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Outline

• Literature Review

• Model

• Estimation & Results

• Conclusion

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“It is difficult to identify any one factor which contributes to the decline in overall volume and frequency of spills, rather it is considered to be the result of a range of initiatives taken by governments and the shipping industry.” (Hujier, 2005 p1.)

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5

Literature Review

• Talley & Anderson (1995),Talley Jin, and Kite Powell (2001)

• Spills as a function of vessel size, vessel damage severity, and 'regulatory effort'

• Homan and Steiner (2008)

• Spills as a function of traffic volume, nos. of tankers, average tanker size, real oil price, and repair costs

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Literature Review (2)

• HS model – Poisson Count model of spill numbers pre and post 1991 (OPA introduction)

• Model applied to US Coastguard Data • Found – variables gave reasonable fit.• Post 1991 –the OPA effect

– % of tankers with double hull technology – Dummy variable measuring OPA introduction

• Found both these to be significant in explaining the reduction in spill numbers post 1991

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ITOPF Oil Spill Numbers, 1970 - 2005

0

20

40

60

80

100

120

14019

7019

7119

7219

7319

7419

7519

7619

7719

7819

7919

8019

8119

8219

8319

8419

8519

8619

8719

8819

8919

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

05

Year

Nu

mb

ers

SmallSpills LargeSpills AllSpills

Source: www.itopf.org – Oil spill statistics - accessed January 2008

So can we model the ITOPF data in the same way?

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Data and Model

• 1970 - 1990• Tonne mile data • Real oil price • Average tanker size• Tanker lay up %

• 1970 - 2005• As left hand column• plus• Double hull fleet %• Dummies for

– OPA– MarPol– ISM

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Model Estimation

• Poisson Count Model• Tested for 'overdispersion' (mean and variance

of spill numbers should be the same value in a PC model)

• Used negative binomial model when overdispersion present

• (Models used because dependent variable takes positive or zero values)

• Applied to All Spills, 'Small Spills' and 'Large Spills' as per ITOPF definitions

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ResultsModels1970-1990

All S pills C oefficient G L M R obust P - ValueS t E rror

C onstant 2.89400 4.49E -02 0.000S eabtrade 0.00193 3.25E -05 0.000R loilpr 0.00725 3.97E -03 0.068S ize -0.01190 6.04E -03 0.049L ayUp 0.0249 1.11E -02 0.024

N 21 R -squared 0.720L R Index 0.980

Model Type Negative B inomialOverdispers ion tes ts t -s tatisticC -T 0.016 2.59 0.006Wooldridge 0.019 3.20 0.020

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Results 1970 - 2005

All S pills C oefficient G L M R obust P - ValueS . E rror

C onstant 3.1793 3.661E -01 0.000S eabtrade 1.710E -04 2.910E -05 0.000R loilpr 0.0096 2.692E -03 0.000S ize -0.0141 4.293E -03 0.000L ayUp 0.0209 1.003E -02 0.037Dhull -2.2167 0.3007 0.000N 36 R -squared 0.819

L R Index 0.930Model Type Negative B inomialOverdispers ion tes ts t -s tatisticC -T 0.016 2.99Wooldridge 0.023 2.52

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Principal Results

• Model variables all 'statistically significant'

• Real oil price differs in sign from HS

• Double Hull % highly significant

• Dummy variables – MarPol/ISM/OPA all insignificant so not reported

• Increase in recent accidents driven by increase in world trade tonne miles

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Actual spills and forecasts from Pre and Post Dhull models

0

20

40

60

80

100

120

140

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

Year

Sp

ill n

um

ber

s

Actual Pre Dhull Post Dhull

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Large Spills: Actual, pre dhull and post dhull forecasts

0

510

1520

25

3035

40

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

Year

Sp

ill

nu

mb

ers

Actual Pre Dhull Post Dhull

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Small Spills: Actual, Pre and Post Dhull forecasts

0

20

40

60

80

10019

70

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

Year

Sp

ill

nu

mb

ers

Actual Pre Dhull Post Dhull

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Summed Up

Average Spill numbers 2000 - 2005 Actual Model Forecasts D Hull No D Hull All Spills 20 21 72 Small Spills 17 17 52 Large Spills 4 3 22

Note: Spill totals rounded to nearest whole spill, hence discrepancies in totals

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Conclusion

• Oil spills significantly reduced by double hull technology

• No evidence found for other effects

• Trade is a key driver

• Model based on relatively few observations, so may not be robust

18Instead of this, then perhaps we might get....

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• Thank you for your attention!

ships as green as this one in the future