Environmental regulation and safety outcomes: Evidence from energy pipelines in Canada *

摘要

This paper investigates the effects of more stringent environmental regulation & mdash;specifically, paying amortized abandonment fees as accrued and absolute liability for adverse events & mdash;on the safety performance of Canadian oil and gas pipelines. We construct a comprehensive dataset that includes pipeline adverse events, throughput, and regulatory intensiveness for fourteen federally-regulated energy pipelines in Canada. We find that abandonment fees are significantly and positively associated with pipeline events. On average, a 1% increase in abandonment fees is associated with 1.3 more events per month. In contrast, establishing absolute liability is associated with significant decreases in the number of pipeline events: on average, absolute liability is responsible for eliminating 80% of quarterly events for Canadian major oil pipelines and 20% for smaller pipelines.