In the case
of an
oil spill cleanup, the costs are likely to be directly incurred by an insurance company, but the premiums paid for that insurance come at the expense
of the
value of the
oil transportation service — the higher the expected clean - up costs from
oil spills, the higher insurance premiums will be, and this will mean higher pipeline tolls, which in turn
implies lower profits, taxes, and royalties on the products shipped.