Preliminary Empirical Assessment of Offshore Production Platforms in the Gulf of Mexico

Resources for the Future Discussion Paper No. 10-66

38 Pages Posted: 27 Jan 2011

See all articles by Lucija Muehlenbachs

Lucija Muehlenbachs

Resources for the Future; University of Calgary

Mark A. Cohen

Vanderbilt University - Strategy and Business Economics; Vanderbilt University - Law School; Resources for the Future

Todd Gerarden

Cornell Dyson School of Applied Economics and Management

Date Written: January 12, 2011

Abstract

This paper reports on a preliminary analysis of performance indicators on 3,020 platforms operating in the Gulf of Mexico between 1996 and 2010. Statistical analysis reveals that company-reported incidents (such as blowouts, fires, injuries, and pollution) increase with water depth, controlling for platform characteristics such as age, quantity of oil and gas produced, and number of producing wells. In addition to company-reported incidents, we examine government inspections and the type of enforcement action (warning, component shut-in, facility shut-in, or civil penalty review) following an inspection. Fewer incidents of noncompliance are detected during inspections on deep-water platforms compared with shallow-water platforms; however, the magnitude of the effect of depth on noncompliance is not large. We provide a preliminary analysis of the effect of prior findings of noncompliance, suggesting that noncompliance is persistent. We also find significant variability in both self-reported incidents and noncompliance across leaseholders.

Keywords: Noncompliance, Inspection, Offshore Oil and Gas

JEL Classification: Q50

Suggested Citation

Muehlenbachs, Lucija and Cohen, Mark A. and Gerarden, Todd, Preliminary Empirical Assessment of Offshore Production Platforms in the Gulf of Mexico (January 12, 2011). Resources for the Future Discussion Paper No. 10-66. Available at SSRN: https://ssrn.com/abstract=1744263 or http://dx.doi.org/10.2139/ssrn.1744263

Lucija Muehlenbachs

Resources for the Future ( email )

Washington, DC 20036
United States

University of Calgary ( email )

University Drive
Calgary, Alberta T2N 1N4
Canada

Mark A. Cohen (Contact Author)

Vanderbilt University - Strategy and Business Economics ( email )

Nashville, TN 37203
United States
615-322-0533 (Phone)

HOME PAGE: http://https://business.vanderbilt.edu/bio/mark-cohen/

Vanderbilt University - Law School

131 21st Avenue South
Nashville, TN 37203-1181
United States

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States
202-328-5000 (Phone)

Todd Gerarden

Cornell Dyson School of Applied Economics and Management ( email )

Ithaca, NY 14853
United States

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