An Expected Consequence Approach to Inter-continental Transportation of Crude Oil

Maritime transportation is one of the most important modes carrying crude oil and petroleum products trade (Rodrigue et. al. 2009). This enormous global transportation operation is accompanied by incidents leading to oil spills resulting in significant environmental, social and economic consequences. The most prominent of such an incident is the Exxon Valdez case (Alaska, USA in 1989) which led to a cleanup cost of over 2 billion dollars alone. Fortunately such catastrophic episodes are infrequent, though there are numerous occurrences of smaller spills which are also a source of concern. The latter phenomenon is also underlined by the latest figures released by International Tanker Owner Pollution Federation viz. around 10,000 spills from 1974 to 2008 (ITOPF 2009). In response to the catastrophic accidents such as Exxon Valdez, several legislations have been adopted e.g. MARPOL by International Maritime Organization (IMO) that covers pollution of the marine environment from operational/accidental causes (IMO 2011), the Erika packages for maritime safety (EU Legislations 2011) by the European Union, and the 1990 Oil Pollution Act (OPA) in the United States (Douligeris et. al. 1997). Such risk control measures have, in part, been supported by the five-step Formal Safety Assessment (FSA) methodology developed by the IMO, that makes use of accident frequency of extremely remote, remote, reasonably probable, and, frequent levels; and the four consequence levels (i.e. minor, significant, severe, and catastrophic) to categorize various risk scenarios (Kontovas & Psaraftis 2009, IMO 2002). Recent trend suggests increased FSA compliance in risk assessment research to ensure practicability e.g. see Hu et al. (2007), Safdor (2008a, 2008b) and Martins & Maturana (2010), however, mainly applied in the ship design and personal training areas. Although risk assessment within maritime transportation has been active research area, and we review it in the following section, it is fair to say that most of the works deal with localized setting and hence have limited use for intercontinental routing of crude oil tankers. Through this work we aim to close the gap by proposing a novel risk assessment methodology for global transportation of crude oil. The rest of the paper is organized as follows: Section 2 reviews the relevant literature, followed by the risk assessment methodology in Section 3, and a discussion on parameter estimation in Section 4. The proposed methodology is used to solve a realistic problem instance in Section 5, followed by the conclusion in Section 6.