Determinants of earthquake damage liability assignment in Oklahoma: A Bayesian Tobit censored approach

John Ng'ombe and Tracy Boyer ()

Energy Policy, 2019, vol. 131, issue C, 422-433

Abstract: Scientific evidence suggests earthquakes occurring in Oklahoma since 2009 are not “acts of God”, but very likely triggered by wastewater injection in disposal wells by oil and gas (O&G) companies. While sustaining the O&G industry's contribution to the economy is generally important, achieving environmental and public protection may in part rely on how earthquake inducers are held liable for damage. We use a Bayesian Tobit censored model, estimated using Markov Chain Monte Carlo (MCMC) methods to determine factors that influence public preferences for how much liability O&G companies should assume for induced earthquake-related damage. Data are from a survey of Oklahomans collected in 2017 by Survey Sampling International (SSI). Results suggest people would, on average, hold O&G companies liable for 75% of the earthquake damage. We find socio-demographic, earthquake, locational, and O&G industry-related factors as the main drivers of earthquake damage liability. However, their effects on damage liability vary between respondents that have had their property damaged by earthquakes and those that in some way benefit from O&G companies through jobs and gas-leases. We provide insights by which individuals might lobby representatives to impose new liability or regulatory mechanisms on O&G companies to avoid or compensate for earthquake damage.

Keywords: Wastewater injection; Induced earthquakes; Bayesian tobit censored approach; Earthquake damage liability; Oklahoma (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S030142151930309X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:131:y:2019:i:c:p:422-433

DOI: 10.1016/j.enpol.2019.05.013

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().