Assessing risks and regulating safety standards in the oil and gas industry: The Peruvian experience

A. L. Vásquez Cordano, J. Salvador Jácome, R. García Carpió, V. Fernández Guzmán

Producción científica: Capítulo del libro/informe/acta de congresoContribución a la conferenciarevisión exhaustiva

1 Cita (Scopus)

Resumen

Environmental regulation has usually focused on continuous sources of pollution like CO2 emissions through carbon taxes. However, the recent oil spill in the Gulf of Mexico has shown that accidents associated to safety failures can also generate bursts of pollution with serious environmental consequences. Regulating safety conditions to prevent accidents in the oil and gas industry is challenging because public regulators cannot perfectly observe whether firms comply with safety laws. Likewise, it involves a complex political process in which different agents such as the government and oil companies interact and compete. This paper studies this problem in the case of Peru, providing a framework to analyze the enforcement of regulations designed to control safety standards in the oil and gas industry. Regulating oil accidents demands a holistic approach, for the paper discusses different contributions from economics and game theory to understand the safety regulatory framework of Peru representing the interactions among the government, oil companies, and public regulators. It characterizes the optimal enforcement strategy to prevent safety law violations causing accidents. Policy instruments such as self-reporting, monitoring and economic incentives are also analyzed considering the Peruvian experience. It is possible to represent using a simple decision framework the complex institutional system governing environmental regulations in Peru. Economic motives in an uncertain business environment drive law infringing behavior that leads to safety violations, so the government finds optimal to apply a law enforcement strategy that attacks these incentives. Oil companies may find beneficial to comply with safety standards to minimize private losses associated to large accidents involving oil spills, gas pipelines leakages, etc. Understanding how to properly regulate the occurrence of oil and gas accidents is fundamental for the legitimacy of the oil industry and governments' stability in a context where citizens demand improvements in safety standards and environmental quality. The analysis provided here can help oil firms and regulators in Peru and other jurisdictions assess the risks involved in oil and gas operations and the optimal ways to diminish them by considering appropriate regulations that balance the interests of companies and the governments' objective of protecting the environment and human health.

Idioma originalInglés
Título de la publicación alojadaSPE Latin American and Caribbean Health / Safety / Environment / Social Responsibility Conference 2013
Subtítulo de la publicación alojadaSustainable Solutions for Challenging HSSE Environments in Latin America and the Caribbean
EditorialSociety of Petroleum Engineers (SPE)
Páginas160-175
Número de páginas16
ISBN (versión impresa)9781627489676
EstadoPublicada - 2013
Publicado de forma externa
EventoSPE Latin American and Caribbean Health, Safety, Environment, Social Responsibility Conference 2013 - Lima, Perú
Duración: 26 jun. 201327 jun. 2013

Serie de la publicación

NombreSPE Latin American and Caribbean Health / Safety / Environment / Social Responsibility Conference 2013: Sustainable Solutions for Challenging HSSE Environments in Latin America and the Caribbean

Conferencia

ConferenciaSPE Latin American and Caribbean Health, Safety, Environment, Social Responsibility Conference 2013
País/TerritorioPerú
CiudadLima
Período26/06/1327/06/13

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