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The direct costs associated with the New Zealand MV Rena oil spill

DescriptionThe MV Rena ran aground off the coast of the Bay of Plenty, New Zealand on the 5 October 2011, releasing over 350t of heavy fuel oil as well as various other contaminants. The environmental effects associated with this oil spill are well documented, but the associated direct economic losses of this oil spill have only recently been investigated; in addition to the limited economic studies done on oil spills of this size internationally. Exploring the impacts to the local fisheries and tourism industry, as well as clean-up/restoration costs and the loss of recreational value, gives a better understanding of the consequences of this oil spill. Looking at pre- and post- spill trends for fishery landings and tourism spending, the losses to these industries were estimated. The clean-up and restoration costs were gathered through the various government agencies involved (salvage costs were not included in this estimate). The losses to the recreational value of a highly impacted stretch of coastline was estimated via in-person surveys and analysed using a combination of the individual travel cost and contingent behaviour methods. Combined, the total direct costs associated with the MV Rena oil spill can be conservatively estimated at NZD (2021) 99.06-115.38 million. These findings provide critical cost estimates for a medium sized oil spill that occurred within a country with a relatively small economy. This study aims to support and ensure the adoption of policies that focus on prevention and preparedness for marine oil spills within New Zealand.

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