NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Analyzing the Risk of Transporting Crude Oil by Rail

Charles F. Mason

NBER Working Paper No. 24299
Issued in February 2018
NBER Program(s):Environment and Energy Economics

In this paper, I combine data on incidents associated with rail transportation of crude oil and detailed data on rail shipments to appraise the relation between increased use of rail to transport crude oil and the risk of safety incidents associated with those shipments. I find a positive link between the accumulation of minor incidents and the frequency of serious incidents, and a positive relation between increased rail shipments of crude oil and the occurrence of minor incidents. I also find that increased shipments are associated with a rightward shift in the distribution of economic damages associated with these shipments; the implied marginal impact of an additional 1,000 rail cars carrying oil between two states in a given month is $1,836. In addition, I find larger average effects associated with states that represent the greatest source of tight oil production.

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Document Object Identifier (DOI): 10.3386/w24299

 
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