Cost Benefit Analyses for Cost-Benefit Analyses for Wreck Oil Removal Projects

Dagmar Schmidt Etkin, PhDEnvironmental Research Consulting

Basic Cost‐Benefit Analysisy

Value of averted costs and damagesValue of averted costs and damages

= Benefit of oil removal

If benefit > cost of oil removal operation,

Then oil removal operation has a NETThen, oil removal operation has a NET BENEFIT to the environment and to society

Calculating Benefit of Wreck Oil Removalg

• Determine hypothetical spill/release scenario(s)– Nature of event(s)

• Continuous chronic or episodic releases• Large release

– Oil/hazardous material type(s) and amount(s)

• Model trajectory, fate, and effects of release scenarios

• Estimate impacts and costs of release scenarios– Response and cleanup costs 

Environmental damages– Environmental damages– Socioeconomic damages (e.g., fisheries, tourism)

Components of Averted Response Costs and Damages

• Monitoring of leaking or potentially leaking wreck

• Response and cleanup costs for leakage events– Shoreline cleanup

– Oversight

i l– Disposal

• Response and cleanup for potential large releases– On water response (mechanical dispersant)– On‐water response (mechanical, dispersant)

– Oversight

– Shoreline cleanup

– Disposal

Factors Affecting Potential Response Costs• LocationLocation

– Physical geography (shoreline type, water depth, sea state)– Political regime (response regulations – funding, dispersant policy )– Cultural/social regime (public involvement, “how clean is clean”, labor costs)– Proximity and nature of sensitive resources (habitats, shorelines) to protect– Proximity and type of response resources available

• Response type– Response strategy employed + timing (equipment personnel requirements)– Response strategy employed + timing (equipment, personnel requirements)– Effectiveness of on‐water response (mechanical, dispersant)– Endpoints in shoreline cleanup (“how clean is clean”)

• Oil‐ and hazmat (HNS)‐type( ) yp– Persistence– Toxicity– Human health impacts, chemical reactions/releasesV l d t f l• Volume and nature of release– Smaller volumes more expensive on per‐unit basis unless very small– Continuous vs. sudden, massive release– Oil spread, degree of shoreline impactp , g p

Factors Affecting Potential Environmental Damages• Resources at riskResources at risk

– Proximity– Types of habitats (wetlands, coral reefs, shoreline types)– Sensitive species (endangered or threatened species)p ( g p )

• Season– Migratory birds and other seasonal variations in populations– Seasonal variation in habitat sensitivity (nesting, life stages)y ( g, g )

• Oil‐ and hazmat (HNS)‐type– Persistence– Toxicityy– Human health impacts, chemical reactions/releases

• Volume and nature of release• Response actions and activitiesResponse actions and activities

– Impact from response itself (disturbance, chemical agents)– Effectiveness of response (oil off shoreline, out of sensitive areas)– Timeliness of responseTimeliness of response

Factors Affecting Potential Socioeconomic Damages• Resources at risk• Resources at risk

– Proximity– Types of resources (tourist beaches, fishing areas, cultural sites)

• Season• Season– Tourism and other resource use that may be seasonal– Commercial fishing and aquaculture

• Oil and hazmat (HNS) type• Oil‐ and hazmat (HNS)‐type– Persistence– Toxicity– Human health impacts chemical reactions/releases– Human health impacts, chemical reactions/releases

• Volume and nature of release• Response actions and activities

I t f it lf (di t b h i l t )– Impact from response itself (disturbance, chemical agents)– Effectiveness of response (oil off shoreline, out of sensitive areas)– Timeliness of response

Costs of Wreck Oil Removal Operationsp

• Spill response preparedness• Spill response, if needed (prepared, timely, on site)• Salvage equipment and personnel

M it i i t d l• Monitoring equipment and personnel• Logistical support

Factors Affecting Wreck Oil Removal Operation Costs

• Location– Water depth– Currents and sea state– Weather– Logistical support

• Vessel characteristics– Oil‐ and hazmat (HNS)‐type and content (munitions, human remains)– Vessel type and construction/configuration– Degree of corrosion

l ( h d )– Vessel orientation (upright, on side)– Vessel condition (broken, split, intact)– Other factors (presence of munitions, human remains, cultural artifacts)E i t i d d il bl• Equipment required and available

• Monitoring and oversight logistics required and available

Sunken Wreck

Oil orHazMat?

NO Leave inplaceHazMat? place

YES

Leaking orlikely to

leak?Monitor

NOOil/HazMatremoval op?

YESLeave in

place

NO

YESNOWreck Salvage op

to remove oil+ hazmat

Removalwithout

ill ? YESNO

Spill orleak?

Smallspillage?

YES

Large spillresponse

NO

COSTSMonitoring

Spill orleak?

NO

YESOil/HazMat Removal 

spillage? YESNO

Salvageoperation+ oil spillcleanup

Salvageoperation only

Small spillresponse

NO

YES

Event withprobability

Decision and Consequence 

Tree Moreleaks?

Leave inplace

NO

YES

COSTSSalvage opMonitoring

Oil/HazMat spillcleanup

Spill enviro damagesSpill socio damages

COSTSSalvage opMonitoring

Salvage?

NO

YES

probability

Decision

Tree

COSTSMonitoring

Oil/HazMat spillcleanup

Spill enviro damagesSpill socio damages

YESConsequences

Action

Start/EndPointSp soc o da ages Point

State‐of‐the‐Art Cost Analyses

•Trajectory, fate, effects modeling of hypothetical scenariosof hypothetical scenarios

•Data for simulating behavior of oil•Data for estimating costs/impacts•Planning for spill response contingencies and preparedness

•Cost models based on algorithms from data on previous spills

•Adapted to specific scenariosPREVAILING CONDITIONS

SELECTWATER

TEMPERATURE

5ºC

ON-WATER OILING CONDITIONS

SELECT SURFACEWATER TYPE

LARGE RIVEROPEN MARINE

SHORELINE CONDITIONSSELECT OILTYPE

SPECIFYSPILL AMOUNT

SELECTPREVAILING

WINDS

CALM - LIGHT 2 kts

MODERATE 15 kts

STRONG 25 kts

GALE 35 kts

FRESH

RAINBOW SHEEN

SILVER SHEEN

MOUSSE

FILM

SELECT SLICKTHICKNESS

CONTINUOUS

BROKEN

PATCHY

SPORADIC

SELECT SLICKCOVERAGE

SELECT SHORELINEOIL COVERAGE

CONTINUOUS

BROKEN

PATCHY

SPORADIC

FRESH OIL

MOUSSE

TARBALLSPATTIES

TAR STRANDS

SELECT SHORELINESURFACE OILING

SURFACERESIDUE

ASPHALTPAVEMENT

POOLED >1 cm

COVER >0.1-1 cm

COAT <0.1 cm

STAIN

FILM

SELECT SHORELINEOIL THICKNESS

SELECT SHORELINERESPONSE METHOD

SPECIFYRESPONSE

TIMING

sq. meters

SPECIFY SHORELINEAREA IMPACTED

sq. meters

PREDICTEDSHORELINE

AREAIMPACTED

OR

<3 MILES

3-10 MILES

10-50 MILES

NEARSHORE

10ºC

20ºC

30ºC

GASOLINE

JET FUEL

DIESEL

LT CRUDE

LUBE OIL

MED CRUDE

HVY CRUDE

#6 FUEL

IFO

SELECTDISTANCE TO

SHORE

SELECTON-WATER•Adapted to specific scenarios

•Local informationCONDITIONSRESPONSECRITERIA

SELECT WATER-BASEDSOCIOECONOMIC

RESOURCES

SMALL LAKE

SMALL STREAMOPEN FRESH

OPEN ESTUARY

WATERRESPONSECRITERIA

SHORELINERESPONSECRITERIA

SHORELINEOILING

CRITERIA

SELECT SHORELINE(ESI) TYPE

SHORELINE-BASEDSOCIOECONOMIC

IMPACTS

SHORELINE-BASED

NATURALRESOURCE

IMPACTS

SELECT"HOW CLEAN IS CLEAN"

ESTIMATED SHORELINE RESPONSEEFFECTIVENESS

SELECTSHORELINE-

BASED NATURALRESOURCES

SHORELINERESPONSE

IMPACT

SOCIOECONOMICRESOURCE

IMPACTS

% REMOVAL

ON-WATERRESPONSE

COST

NATURALRESOURCEDAMAGES(COSTS)

SOCIO-ECONOMICDAMAGES(COSTS)

S O S O

NATURAL RECOVERY

MANUAL

MECHANICAL

SORBENTS

SEDIMENT REWORK

VEGETATIONREMOVAL

BURN

FLOODING

LOW PRESSURECOLD WASH

HIGH PRESSURECOLD WASH

LOW PRESSURE HOTWASH

HIGH PRESSURE HOTWASH

STEAM CLEAN

SAND BLAST

CLEANING AGENTS

BIOREMEDIATION

HOURS

NONE

MECHANICAL

BURN

DISPERSANT

TOTALDAMAGES

OR

ESTIMATEDON-WATERRESPONSE

EFFECTIVENESS

% REMOVAL

SPECIFIEDON-WATERRESPONSE

EFFECTIVENESS% REMOVAL FISHERIES

PORTS

BOATING REC FISHING

WATER INTAKE

DRINK WATER

OTHER HIGH LOW USE

SELECT WATER-BASEDNATURAL RESOURCES

FISH

MAMMALS

OTHER HIGH LOW

BIRDS

CORAL REEF

BIRDS

MAMMALS

ENDANGEREDSPECIES

MODERATESENSITIVE

LOWSENSITIVE

HIGHLYSENSITIVE

SELECT SHORELINE-BASEDSOCIOECONOMIC RESOURCES

TOURIST BEACH

SPECIFYRESPONSE

EFFECTIVENESS

% REMOVAL

9: SHELTEREDTIDAL FLAT

10A: SALT/BRACK MARSH

10B: FRESH-WATER MARSH

10C: SWAMP

10D: MANGROVE

7: EXPOSED TIDALFLAT

6A: GRAVELBEACH

6B: RIPRAPSTRUCTURES

8B: SHELTEREDSOLID MANMADE

8A: SHELTEREDROCKY SHORE

1A: EXPOSEDROCKY

2: ROCKYPLATFORM

3: FINE SAND

4: COARSE SAND

5: MIXEDSAND/GRAVEL

RESIDENTIAL

WILDLIFE VIEWING HIGH VALUE

INDUSTRIAL MEDIUM VALUE

PORT LOW VALUE

MAXIMUM HIGH

MEDIUM

MINIMUMLOW

50+ MILES

SELECTPREVAILING

WIND DIRECTION

TO SHORE

OFFSHORE

WATER-BASEDSOCIOECONOMIC

IMPACTS

WATER-BASEDNATURAL

RESOURCE IMPACTS

NATURALRESOURCE

IMPACTS

ON WATERRESPONSEMETHOD

SHORELINE RESPONSE COST

TOTALRESPONSE

COST

[OIL DAMAGES WITHOUT RESPONSE] -

[OIL DAMAGES WITH RESPONSE + RESPONSEDAMAGES]

= BENEFIT OF RESPONSE

COMPARE RESPONSE COST:BENEFIT OF RESPONSE

OIL SPILL RESPONSE COSTEFFECTIVENESS ANALYTICAL

TOOL (OSRCEAT)OIL DAMAGES WITH

RESPONSE

RESPONSE BENEFIT

OIL DAMAGES WITHOUT RESPONSE

OIL DAMAGES MITIGATED

RESPONSEDAMAGE

OIL DAMAGES WITHRESPONSE

Benefits of Cost‐Benefit Approachpp

• Data for identification of wrecks of concern

• Data for identification of wrecks to “monitor”

• Data for prioritization of wrecks for removal

• Quantitative data for decision‐makers

• Preview of spill and removal scenarios for contingency planning

• Contingency planning for prioritized resources