Preface | p. xiii |

Introduction to Environmental Problems: Transport, Burial, Monitoring, Spillage, Leakage, and Cleanup | p. 1 |

Transport Problems | p. 6 |

Burial/Storage Problems | p. 6 |

Monitoring Problems | p. 7 |

Spillage Problems | p. 8 |

Leakage Problems | p. 8 |

Summary | p. 9 |

Contracts and Decisions | p. 11 |

General Development | p. 11 |

Parameter Uncertainties | p. 13 |

Numerical Example | p. 16 |

Discussion | p. 17 |

Some Properties of a Log-Normal Distribution | p. 18 |

Exact Statements | p. 18 |

Approximate Statements | p. 20 |

Multiple-Parameter Distributions | p. 21 |

Transport and Burial Hazards of Radioactive Waste | p. 23 |

Introduction | p. 23 |

Risk and Catastrophe in the Transport of Radioactive Waste | p. 24 |

Statistical Measures | p. 25 |

Analysis of Alternate Actions: Limited Spill | p. 28 |

Analysis of Alternate Actions: Catastrophic Spill | p. 31 |

Parameter Uncertainty Effects | p. 33 |

Means and Variances | p. 34 |

Relative Importance | p. 35 |

Relative Contribution of Uncertain Parameters in Subsurface Hydrology | p. 36 |

Introduction | p. 37 |

Physical Problem | p. 37 |

Theoretical Framework | p. 40 |

Results and Discussion | p. 42 |

Summary | p. 43 |

Approximations for Cumulative Probability | p. 45 |

Utility Theory and Working-Interest Optimization in a Hazardous Waste Transport and Burial Opportunity | p. 47 |

Introduction | p. 47 |

Working-Interest Evaluation | p. 48 |

Exponential Utility Function | p. 50 |

Parabolic Utility Function | p. 53 |

Applications | p. 54 |

Summary | p. 59 |

Limiting Expressions for Certainty Equivalent | p. 59 |

Parabolic Approximation to Exponential Utility | p. 62 |

Catastrophic Events, Insurance, and Unilateral Regulatory Changes | p. 65 |

Introduction | p. 65 |

Catastrophic Loss in Exploration Assessments | p. 67 |

Catastrophic Loss after Oil Is Found | p. 71 |

Insurance for Hydrocarbon Exploration and Development Risks | p. 73 |

General Catastrophic Loss Conditions | p. 74 |

Mathematical Considerations | p. 74 |

Numerical Illustration | p. 78 |

Insurance Coverage After Oil is Found | p. 79 |

General Considerations | p. 79 |

Numerical Illustration | p. 81 |

Insurance against Catastrophic Loss for Environmental Projects | p. 82 |

Optioning against Potential Regulatory Changes | p. 85 |

Risk Retention | p. 86 |

Evaluation of Risk Reserve Fund | p. 88 |

Projects Awarded at One Time Exposed to Liability L | p. 88 |

Projects Awarded at Different Times Exposed to Liability L | p. 90 |

Projects of Variable Magnitude Awarded at Different Times and Exposed to Liability L | p. 93 |

Numerical Illustrations | p. 95 |

Summary | p. 97 |

Limiting Risk Using Fractional Working Interest | p. 99 |

Introduction | p. 99 |

General Methods | p. 100 |

Cozzolino's Formula | p. 101 |

Hyperbolic Risk Aversion | p. 104 |

Numerical Illustration | p. 105 |

Results from Cozzolino's Formula | p. 106 |

Results from the Hyperbolic Formula | p. 110 |

Comparison of Results | p. 110 |

Negative Expected Value | p. 113 |

Summary | p. 114 |

Limiting Risk Within a Consortium and Foreign Government Projects | p. 117 |

Introduction | p. 117 |

RAV Estimates with Uncertainties | p. 118 |

General Considerations | p. 118 |

Numerical Illustrations | p. 119 |

Evaluation of Participation in a Consortium of Companies | p. 128 |

Evaluation of Participation in Foreign Government Projects | p. 132 |

Summary | p. 136 |

Corporate Involvement in Multiple Environmental Projects | p. 139 |

Introduction | p. 139 |

Deterministic Portfolio Balancing | p. 140 |

Relative Importance | p. 140 |

Profitability | p. 140 |

Costs | p. 141 |

Budget Constraints | p. 142 |

High Budget | p. 142 |

Low Budget | p. 142 |

Finding the Best Working Interests | p. 142 |

The Parabolic RAV Formula | p. 144 |

The Exponential RAV Formula | p. 146 |

Deterministic Numerical Illustrations | p. 148 |

A Budget of $20 Million | p. 149 |

A Budget of $11 Million | p. 149 |

A Budget of $4 Million | p. 150 |

Probabilistic Portfolio Balancing | p. 150 |

Probabilistic Numerical Illustrations | p. 151 |

Variable Value | p. 151 |

Variable Value and Cost | p. 154 |

Variable Value, Cost, and Success Probability | p. 155 |

Very Low Budget | p. 155 |

Low to High Budget Comparison | p. 157 |

Comparison of Parabolic and Exponential RAV | p. 161 |

Deterministic Results | p. 161 |

Statistical Results | p. 162 |

Transport and Burial of Wastes | p. 164 |

Multiple Projects | p. 169 |

Exposure and Expenditure Constraints | p. 171 |

Corporate Exposure | p. 171 |

Cost Expenditure | p. 172 |

Optimal Working Interest | p. 172 |

Parabolic Utility Function | p. 175 |

Application | p. 171 |

Summary | p. 178 |

Weighted RAV Optimization | p. 180 |

Apportionment of Cost Overruns to Hazardous Waste Projects | p. 183 |

Introduction | p. 183 |

Project Costs and Cost Overruns | p. 184 |

Numerical Illustrations | p. 186 |

Identical Projects | p. 186 |

Unequal Projects | p. 187 |

Arbitrary Numbers of Projects | p. 188 |

Summary | p. 190 |

Bayesian Updating of Toxic Leakage Scenarios | p. 193 |

Introduction | p. 193 |

Theoretical Considerations | p. 193 |

General Concepts of Bayesian Updating | p. 194 |

Numerical Illustration | p. 196 |

Updating the Likelihood of a State Being Correct | p. 196 |

Updating the Probability of Leakage | p. 197 |

Bayesian Decision Criteria | p. 199 |

Optimal Expected Value Bayes Decision | p. 199 |

Expected Opportunity Loss | p. 203 |

Influence of the Length of the Observation Record on Decision Making | p. 205 |

Influence of the Form of the Loss Function on Decision Making | p. 206 |

Summary | p. 210 |

Multiple Transport of Hazardous Material: Probabilities of Profitability | p. 211 |

Introduction | p. 211 |

Statistical Measures for Individual Transport Trips | p. 211 |

Statistics for a Single Event | p. 212 |

Statistics for Multiple Events | p. 214 |

Bayesian Updating of Probabilities | p. 215 |

Residual Trips and Probability Updating | p. 217 |

Budget Buyout Considerations | p. 217 |

Numerical Illustrations | p. 218 |

Multiple Transport before a Catastrophe Occurs | p. 218 |

Ship Disaster and Probability Updating | p. 219 |

Buyout Price and Minimum Acceptable Chance | p. 219 |

Summary | p. 220 |

Maximizing Profit for a Toxic Waste Site Monitoring System | p. 223 |

Introduction | p. 223 |

Scientific Considerations | p. 224 |

Financial Considerations | p. 225 |

Numerical Illustration | p. 228 |

Summary | p. 229 |

Option Payments for Future Information | p. 231 |

Introduction | p. 231 |

Maximum Option Payments | p. 232 |

Mean Value Assessment of Option Costs | p. 234 |

Probabilistic Assessment of Option Costs | p. 235 |

Numerical Illustrations | p. 236 |

Mean Value Assessment of Option Costs | p. 237 |

Probabilistic Assessment of Option Costs | p. 237 |

Summary | p. 238 |

The Worth of Resolving Uncertainty for Environmental Projects | p. 241 |

Introduction | p. 241 |

Representation of Risk and Uncertainty | p. 244 |

Application to the Question: Is Value Added? | p. 247 |

Summary | p. 249 |

Scientific Uncertainty in Environmental Problems: Models and Data | p. 251 |

Introduction | p. 252 |

Continuous Measurements of Hydraulic Head | p. 253 |

Weighting Factors | p. 253 |

Parameter Determination | p. 255 |

Illustrative Example | p. 255 |

Spatial Changes and Partitions | p. 260 |

Discrete Measurements of Hydraulic Head | p. 261 |

Stochastic Determinations | p. 262 |

General Considerations | p. 262 |

Parameter Determination | p. 263 |

Weighting Factors | p. 265 |

Numerical Illustation | p. 266 |

Averaging Measures for Hydrodynamic Problems | p. 268 |

Specific Hydrodynamic Flow Model | p. 269 |

Discussion | p. 274 |

Summary | p. 275 |

General Development of Procedures for N Models | p. 276 |

Continuous, Perfect Measurements | p. 276 |

Discrete, Perfect Data | p. 277 |

Stochastic Measurements | p. 278 |

Individual Parameter Determination Procedure | p. 281 |

Measures of Model and Observational Mismatch | p. 283 |

Human, Water, Chemical, Biological and Radiocative Risks | p. 287 |

Introduction | p. 288 |

Natural Environmental Problems | p. 288 |

Anthropogenic Environmental Problems | p. 289 |

Examples of Anthropogenic Environmental Problems | p. 290 |

Resources and Environmental Issues | p. 297 |

Remediation of Environmental Problems | p. 300 |

Rules for Addressing Environmental Problems | p. 301 |

Epilogue | p. 303 |

Phase I, II, and III Site Assessments | p. 305 |

Brief Overview of the Federal Statutes of the United States | p. 379 |

References | p. 423 |

Index | p. 431 |

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