Statistics of extremes in oil spill risk analysis.

The Deepwater Horizon oil spill (DWH) in 2010 in the Gulf of Mexico is the largest accidental marine oil spill in the history of the petroleum industry. After DWH, key questions were asked: What is the likelihood that a similar catastrophic oil spill (with a volume over 1 million barrels) will happen again? Is DWH an extreme event or will it happen frequently in the future? The extreme value theory (EVT) has been widely used in studying rare events, including damage from hurricanes, stock market crashes, insurance claims, flooding, and earthquakes. In this paper, the EVT is applied to analyze oil spills in the U.S. outer continental shelf (OCS). Incorporating the 49 years (1964-2012) of OCS oil spill data, the EVT is capable of describing the oil spills reasonably well. The return period of a catastrophic oil spill in OCS areas is estimated to be 165 years, with a 95% confidence interval between 41 years and more than 500 years. Sensitivity tests indicate that the EVT results are relatively stable. The results of this study are very useful for oil spill risk assessment, contingency planning, and environmental impact statements on oil exploration, development, and production.