Putting the environment into the NPV calculation - quantifying pipeline environmental costs

Pipeline projects impact the environment through soil and habitat disturbance, noise during construction and compressor operation, river crossing disturbance and the risk of rupture. Assigning monetary value to these negative project consequences enables the environment to be represented in the project cost-benefit analysis. This paper presents the mechanics and implications of two environmental valuation techniques: (1) the contingent valuation method and (2) the stated preference method. The use of environmental value at the project economic-evaluation stage is explained. A summary of research done on relevant environmental attribute valuation is presented and discussed. Recommendations for further research in the field are made.