An integrated method for quantifying and managing extreme weather risks and liabilities for industrial infrastructure and operations

Abstract

The physical forces and environmental stressors that occur during extreme weather events place facilities at risk for infrastructure failures, loss of operation and production, and highly impactful chemical releases, all of which directly affect a company's bottom line. Hurricane Harvey (2017) resulted in over 100 such failures and chemical releases. There is a pressing need today for risk predictions that incorporate and account for evolving environmental factors such as continuous sea level rise. Such nonstatic (nonstationary) risk management approaches will allow us to more accurately predict storm surge flooding as a function of time and provide more realistic short-term and long-term (on the order of decades) predictions to assist in actionable planning. An integrated three-part approach to assessing the risk of infrastructure damage and chemical releases and the resulting business and legal consequences are presented in this work. This approach consists of (a) temporally variant and spatially localized probabilistic predictions of flooding and forces related to flooding (FloodScore) with unprecedented resolution; (b) detailed impact predictions on facility infrastructure including structural, mechanical, and electrical elements based on the predictions from step (a); and (c) a quantitative means of scoring the environmental/financial risk and consequences of chemicals released as derived from step (b). This integrated approach, which assesses risk of losses in both the near term and out to 50 years in the future, includes the assessment of ecological and human impact levels and provides actionable information for resiliency and risk mitigation planning. K E Y W O R D S extreme weather events, risk management

What Can Machine Learning Teach Us about Australian Climate Risk Disclosures?

“…The increasingly volatile weather in Australia and the extreme events already impacting firms in the form of bushfires, floods, drought, and hailstorms may enhance the focus of firms on physical risk [57][58][59][60]. Firms have been aware of physical risks from weather and climate for longer than they have been focusing on transitional risks, as these risks can be more easily assessed by analysing historical records [61].…”

Lessons learned from the 2011 Great East Japan Earthquake: A case study of tsunami risk assessment in a Japanese chemical corporation

“…Their study highlighted the importance of sharing information related to chemical hazards, accident risks, and first response procedures within a company, the local government, and the public, before and during natural disasters 9 ; risk assessments were also performed and standardized methods were developed to precisely analyze Natech risks such as earthquakes, floods, gale-winds, lightning, and wildfire. [10][11][12][13][14][15][16][17] Countermeasures and preventive procedures against Natech risks were also investigated for adequate risk management and mitigation. The safety triad, which is a concept developed by Prof. Mannan, was applied to prepare for climate extremes affecting chemical industries, and it was effective in identifying deficiencies in safety systems.…”

“…Araki et al reported on the damage and evacuation activities caused by the flood‐induced explosions at an aluminum plant in Japan in 2018. Their study highlighted the importance of sharing information related to chemical hazards, accident risks, and first response procedures within a company, the local government, and the public, before and during natural disasters 9 ; risk assessments were also performed and standardized methods were developed to precisely analyze Natech risks such as earthquakes, floods, gale‐winds, lightning, and wildfire 10–17 . Countermeasures and preventive procedures against Natech risks were also investigated for adequate risk management and mitigation.…”