Optimal Response to Oil Spills: The Strategic Decision Case

In this paper we develop a model for the problem of (a) locating appropriate levels and types of cleanup capability to respond to oil spills and (b) allocating such capability among points of high oil spill potential. The model takes into account frequency of spill occurrence, variability of spill volumes, different cleanup technologies, equipment efficiency and operability, fixed costs to open a facility, equipment acquisition, transportation and operating costs, and costs of damage as functions of spill volume and level of response. The model can also accept policy stipulations on response times. We present an illustrative application of the model in the New England region and discuss its possible uses within existing and alternative policy environments.