With a global population expected to hit 6 billion by 2050, oil spills are one of the biggest challenges to managing a global economy.
But, according to a report from the US-based Institute for Energy Economics and Financial Analysis (IERFA), oil spills can be less destructive than natural disasters, due to a combination of a number of factors including lower oil prices and lower environmental costs.
Oil spills occur when oil is extracted from underground deposits or spilled from pipelines, and are more likely to happen when conditions are right.
However, it is not just the spill itself that is dangerous.
A number of the factors which contribute to the risk of oil spills include: a lack of infrastructure for oil-field infrastructure, and a lack to properly regulate the extraction of oil, as well as the risk to the public, according the IERFA.
In order to make a spill more manageable, oil companies typically develop a number on-site infrastructure which includes: infrastructure that can be repaired, and infrastructure that is accessible for inspections; and an emergency response system which can be activated when oil spills occur.
It is important to note that all these actions are undertaken by oil companies, and all of them require the approval of the National Response Council, which is a body which sets industry-wide guidelines.
The IERFAA’s report states that, in comparison to natural disasters such as floods, hurricanes and earthquakes, oil-related spills are less likely to cause damage and fatalities, and can therefore be less damaging to the environment.
It goes on to state that the environmental cost of a natural disasters is similar to the environmental costs of a spill.
According to IERRA, a spill could cost the environment up to $1.7 trillion, but the cost to the economy is less than $2.2 trillion.
Despite this, the IERSAA report states, that the cost of oil-sourced natural disasters in the US is $1 trillion.