Mitigating Environmental and Public-Safety Risks of United States Crude-by-Rail Transport

17 Pages Posted: 21 May 2016

See all articles by Olufolajimi Oke

Olufolajimi Oke

Johns Hopkins University

Daniel Huppmann

International Institute for Applied Systems Analysis (IIASA)

Max Marshall

Johns Hopkins University

Ricky Poulton

Johns Hopkins University

Sauleh Siddiqui

Johns Hopkins University

Date Written: May 2016

Abstract

We present a medium-term market equilibrium model of the North American crude oil sector via which we develop a scenario analysis to investigate strategies to mitigate the environmental and public-safety risks from crude-by-rail transportation across the United States. The model captures crude oil movements across rail- roads, pipelines and waterways, while distinguishing between light and heavy crude qualities. We find that restricting rail loads or increasing pipeline capacity from areas driving production will significantly reduce rail movements. However, lifting the United States crude oil export ban in isolation will only increase rail transportation volumes. We show that an integrated policy of targeted rail caps, pipeline investments and lifting the export ban sustainably addresses medium-term crude-by-rail risks in the United States.

Keywords: Crude-by-rail, market equilibrium, mixed complementarity problem, transportation capacity, infrastructure investment

JEL Classification: Q31, Q38, L71, C61, C72

Suggested Citation

Oke, Olufolajimi and Huppmann, Daniel and Marshall, Max and Poulton, Ricky and Siddiqui, Sauleh, Mitigating Environmental and Public-Safety Risks of United States Crude-by-Rail Transport (May 2016). DIW Berlin Discussion Paper No. 1575, Available at SSRN: https://ssrn.com/abstract=2782406 or http://dx.doi.org/10.2139/ssrn.2782406

Olufolajimi Oke

Johns Hopkins University ( email )

Baltimore, MD 20036-1984
United States

Daniel Huppmann (Contact Author)

International Institute for Applied Systems Analysis (IIASA) ( email )

Schlossplatz 1
Laxenburg, A-2361
Austria

Max Marshall

Johns Hopkins University ( email )

Baltimore, MD 20036-1984
United States

Ricky Poulton

Johns Hopkins University ( email )

Baltimore, MD 20036-1984
United States

Sauleh Siddiqui

Johns Hopkins University ( email )

Baltimore, MD 20036-1984
United States

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