A data-driven look at why oil spills happen, where they happen, and their impact

1. Oil Pipeline Accident Analysis
Shahar Levy
August 2017

2. Purpose
• This is an exercise in Minitab and statistical
analysis.
• I want to answer the following questions:
– What is the trend of pipeline disasters over time?
– Where can improvements be made to prevent oil
spills?
– Which companies cause the most spills?
– Where do the most oil spills happen?

3. Data
• All data obtained from the Department of
Transportation’s Pipeline and Hazardous
Materials Safety Administration.
• The data for these spills is for US companies.
Non-US spills like the 2010 BP spill are
excluded.
• The data can be found at
https://www.phmsa.dot.gov/pipeline/library/
data-stats

5. • This graph shows that oil
spills costs have remained
steady since 2011.
• 2010 is a major outlier
year due to one major
spill.

6. • Emergency costs,
environmental repair
costs, and property
damage tend to account
for the most damage

7. Pipeline Accident Trends
• Despite the number of spills increasing, the
overall cost of spills has remained stable since
2011.
• The cost breakdown is not statistically
significant due to fluctuations caused by a
small number of large spills.

9. Breakdown of Spill Cause
• 68.4% of spills are caused by human error (poor
equipment construction, Incorrect operation, and
excavation damage). This represents the largest
potential improvement for spill prevention.
• Possible ways to address this issue:
– Additional training for welders and operation workers
– Limit the amount of hours for these workers to prevent
fatigue
– Revamp the documentation system for pipelines to alert
third-parties before excavating in the area

10. Breakdown of Spill Cause
• 21.2% of spills are caused by corrosion.
Corrosion is addressed by exposure to water.
Pipe surfaces are more likely to interact with
water at low pressures (i.e. flow rates)
• To prevent equipment failure from corrosion:
– Use anti-corrosive coatings and linings
– Choose a pipeline material that is less vulnerable
– Invest in pipeline maintenance more often

13. Who is to Blame
• Of the 2793 oil spills between 2010 and 2016,
the 5 largest spills accounted for 63% of the
overall cost.
• Of the 5 largest spills, only 1 was caused by
natural causes (flooding).
• The companies with the largest oil pipelines
are at risk for causing more damage than
companies with many small pipelines.

14. 0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
0
200
400
600
800
1000
1200
0.001 0.1 0.01 0.25 0.5 1 3 5 10 25
NumberofOilSpills
Total Cost of Oil Spill (Millions of Dollars)
Pareto Chart for Oil Spill Distribution
Frequency
Cumulative %

15. Distribution of Spill Cost
• Only 25 spills resulted in more than 10 million
dollars of damage.
• The median oil spill cost $23,000 with a
standard deviation of $16.5MM.
• The mean oil spill cost $835,000.
• The most expensive oil spill during this period
cost $840MM (extreme outlier).

17. Source: U.S. Energy Information Administration, Refinery Capacity Report, 2012.

18. Where do Oil Spills Happen
• 36% of oil spills happen in Texas.
• 76% of oil spills happen in the top 10 states.
• The frequency of accidents is higher near
areas with refineries.
• The frequency of accidents is low near areas
without refineries, even if those areas use a
lot of oil.

19. Conclusion
• The average costs of oil spills per year has
remained at about 200 million since 2011.
• Oil spills happen most often in Texas and have
been getting more frequent in recent years.
• The most damage caused by oil spills comes
from a few very catastrophic spills.
• The cause of spills is most often preventable
(human error) and the root causes can be
addressed.