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External Costs of Transporting Petroleum Products: Evidence from Shipments of Crude Oil from North Dakota by Pipelines and Rail

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  • Karen Clay
  • Akshaya Jha
  • Nicholas Muller
  • Randall Walsh

Abstract

Using data for crude oil transported out of North Dakota in 2014, this paper constructs new estimates of the air pollution, greenhouse gas, and spill and accident costs from long-distance movement of petroleum products by rail and pipelines. Our analysis has three main findings. First, air pollution and greenhouse gas costs are nearly twice as large for rail as for pipelines. Second, air pollution and greenhouse gas costs are much larger than estimates of spill and accidents costs. Third, air pollution and greenhouse gas costs of transporting fuel by rail and pipelines are one-fifth to one-tenth of the costs of combusting fuel in motor vehicles. These results suggest that the policy debate surrounding crude oil transportation may be putting too much relative weight on spills and accidents, while overlooking a far more serious external cost: air pollution and greenhouse gas emissions.

Suggested Citation

  • Karen Clay & Akshaya Jha & Nicholas Muller & Randall Walsh, 2019. "External Costs of Transporting Petroleum Products: Evidence from Shipments of Crude Oil from North Dakota by Pipelines and Rail," The Energy Journal, , vol. 40(1), pages 55-72, January.
    • Handle: RePEc:sae:enejou:v:40:y:2019:i:1:p:55-72
    DOI: 10.5547/01956574.40.1.kcla
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    References listed on IDEAS

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    1. Graff Zivin, Joshua S. & Kotchen, Matthew J. & Mansur, Erin T., 2014. "Spatial and temporal heterogeneity of marginal emissions: Implications for electric cars and other electricity-shifting policies," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 248-268.
    2. Muller Nicholas Z, 2011. "Linking Policy to Statistical Uncertainty in Air Pollution Damages," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-29, June.
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    Cited by:

    1. Harding, Matthew & Kettler, Kyle & Lamarche, Carlos & Ma, Lala, 2023. "The (alleged) environmental and social benefits of dynamic pricing," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 574-593.
    2. Steve Cicala & Stephen P. Holland & Erin T. Mansur & Nicholas Z. Muller & Andrew J. Yates, 2020. "Expected Health Effects of Reduced Air Pollution from COVID-19 Social Distancing," NBER Working Papers 27135, National Bureau of Economic Research, Inc.
    3. Godzinski, Alexandre & Suarez Castillo, Milena, 2021. "Disentangling the effects of air pollutants with many instruments," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    4. repec:osf:socarx:x6fuw_v1 is not listed on IDEAS
    5. Amir Zeighami & Jordan Kern & Andrew J. Yates & Paige Weber & August A. Bruno, 2023. "U.S. West Coast droughts and heat waves exacerbate pollution inequality and can evade emission control policies," Nature Communications, Nature, vol. 14(1), pages 1-13, December.
    6. Alex Hollingsworth & Taylor Jaworski & Carl Kitchens & Ivan J. Rudik, 2022. "Economic Geography and the Efficiency of Environmental Regulation," NBER Working Papers 29845, National Bureau of Economic Research, Inc.
    7. Holland, Stephen P. & Mansur, Erin T. & Muller, Nicholas Z. & Yates, Andrew J., 2021. "The environmental benefits of transportation electrification: Urban buses," Energy Policy, Elsevier, vol. 148(PA).
    8. Nehiba, Cody, 2024. "Electric vehicle usage, pollution damages, and the electricity price elasticity of driving," Journal of Environmental Economics and Management, Elsevier, vol. 124(C).
    9. W.D. Walls and Xiaoli Zheng, 2020. "Pipeline Capacity Rationing and Crude Oil Price Differentials: The Case of Western Canada," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    10. Milan Dedík & Martin Kendra & Matúš Senci & Daniel Pribula & Martin Vojtek, 2024. "Progressive Methods of the Harmfulness Evaluation of Transport in Terms of Emission Production," Sustainability, MDPI, vol. 16(23), pages 1-24, November.
    11. Hill, Alexander, 2025. "The social welfare implications of electrification in the U.S. residential energy market," Journal of Environmental Economics and Management, Elsevier, vol. 131(C).

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    • F0 - International Economics - - General

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