Scawthorn

SEVENTH ANNUAL IIASA-DPRI FORUM ON INTEGRATED DISASTER RISK MANAGEMENT
Coping with Disasters: Global Challenge for the 21st Century and Beyond
Stresa, Lago Maggiore, Italy
19-21 September 2007
INFRASTRUCTURE SEISMIC RELIABILITY
Comparative Analysis of ART, Recent Lessons and
Opportunities/Challenges
Charles Scawthorn
Kyoto University
Kyoto 606 Japan
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Outline
1. Summary Casifica FS / Japan-Turkey project
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Charles Scawthorn, Kyoto University, Kyoto 606 Japan
Mustafa Erdik, Kandili Observatory, Istanbul, Turkey
Junji Kiyono, Kyoto University, Kyoto 606 Japan
Eser Durukal, Kandili Observatory, Istanbul, Turkey
Eren Uckan, Kandili Observatory, Istanbul, Turkey
Shinichi Miura, Kyoto University, Kyoto 606 Japan
2. Recent lessons from 2007 Niigata Chuetsu
Oki Earthquake
3. Opportunities/Challenges suggested by 1 & 2
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Casifica FS / Japan-Turkey project
• Project examined if ART (Alternative Risk Transfer) offers incentives or
advantages for seismic mitigation for infrastructure enterprises.
• Case study is conducted for Tokyo Gas and Istanbul Gas.
• Japan and Turkey have suffered major damaging earthquakes recently,
and are threatened with even greater potential catastrophes in the near
future.
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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What is ART ?
Alternative Risk Transfer are innovative risk transfer techniques
alternative to traditional insurance.
Risk Management
Risk Control
Risk Retention
Insurance
Risk Finance
Risk Transfer
Merit of ART
1. Greater capacity
ART
ART provides greater liquidity for catastrophe risk because the risk is
transferred to capital markets.
3. More nimble (but less known)
Quicker response to new risk scenarios
Quicker response for claims adjustment
New products, perhaps not fully understood
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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2
Steps of this research
1.Collect information of TG & IG
(Company, Earthquake)
2.Risk analysis (PL, RL, LL)
3. Benefit cost analysis of
Alternative Risk Transfer (ART)
Utility of ART
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Company Outline
Customers
9.6 million
3.06 million
Employees
8,447
2,372
Gas Sales (Volume) 11.9 billion m3
3.76 billion m3
Gas Sales (US$)
9,217 million US$
958 million US$
Pipe Length
50,808 km
8,600 km
(115JPY =1US$, 1.5YTL=1US$)
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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3
Service Network
15km
30km
30km
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Seismic Hazard
(most damaging earthquake)
North Tokyo
Inter plate Earthquake (M7.3)
The largest Earthquake of
North Anatolian Fault (M7.7)
Ⅶ
Ⅷ
Ⅹ
ⅸ
Seismic Intensity (JMA scale)
(Japan Cabinet Office)
Seismic Intensity
(JICA and IMM)
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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System
Supply Control and Disaster Management Center
Intervention
Intervention
Intervention
Seismic Shut off
by SI Sensor
LNG
Imported by
tanker
Vent Stack
Seismic Shut off
by Intelligent Meter
Vent Stack
Gas
Plant
Holder
User
Region
Region
Block Valve Governor
Emergency Governor
Valve
Station
High
Pressure
1MPa ≧
Low
Pressure
＞0.1MPa
Middle Pressure
1MPa≧0.1MPa
Gas
Intelligent
Meter
Low seismic resistance
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Distribution System
Distribution System
7MPa
Low seismic resistance
Natural gas
reaches to
ESENYURT RMS
Station by
pipelines from
Bulgaria borders
Every month 2.000.000
gas meters are read and
invoiced
2MPa
0.0021MPa
ESENYURT RMS
Station
Service Box
0.4MPa
Valve Chamber
District Regulator
USER
İGDAŞ does needed
infrastructural
investments
24 hours Non-Stop
Service- Emergency
İnvestments
intervention within
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
15 minutes
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Scenario earthquake / damage
Earthquake
Magnitude
Tokyo
Istanbul
(CDMC)
(JICA and IMM)
M7.3
M7.7
Number of Fatalities
11,000 (6,200 by fire)
87,000 (by collapse of
buildings)
Number of Destroyed
buildings
850,000 (650,000 by fire) 327,000 (by shaking)
Fire Following
Earthquake
Number of FFE
Outbreaks = 1,300
Fire spread cause
enormous damage
Number of FFE is not
estimated.
No fire spread
Damage of gas system
Number of gas supply
disrupted = 1,200,000
caused by breaking pipe
Damage rate of service
box = 0.16
Number of breaking pipe
= 13
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Risks considered
• PD: Property damage
(ie, cost of repair)
• BI: Business Interruption
(ie, loss of revenue)
• LL: Liability Loss
(ie, held responsible for damage to others, esp. due to fire)
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Evaluate ART
(1) Cat Bond for Tokyo Gas
Forfeit Principal
Grid
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Benefit-Cost analysis
B / year = AEL | n − AEL | w + {P(b | n) − P(b | w)}× PV ( p)
C / year = ( AEL | n − AEL | w) ×1.5
AEL: annual expected loss
P(b): probability of bankruptcy (the loss exceed the company’s capital)
PV(p): present value of profit
|n: no ART
|w: with ART
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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TG CAT Bond Benefit-Cost
3000
Decrease of L475
(million US$)
2500
2000
1500
1000
500
3
Grid
0
1
6.7
25
20
B-C (million US$)
3
1.5
1
better
M
2.5
2
B/C
6.9
7.1
15
10
5
0.5
7.1
0
7.1
0
6.9
3
Grid
6.7
2
1
M
6.9
3
Grid
2
6.7
M
1
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Evaluate the ART
(2) Swap between Tokyo Gas and IGDAS
The trigger grid and
principal forfeiture for TG
The trigger events and
principal forfeiture for IG
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Conclusion
•
CASIFICA cooperative project re seismic risk
analysis for two utilities, TG and IG.
•
ART for infrastructure enterprises assessed
–
CAT Bond using parametric triggers was analyzed
and found to have significant benefit for TG.
–
A seismic swap between TG and IG was analyzed
and found to have less benefit for TG than IG.
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
32
July 16, 2007 Niigata Chuetsu Oki Earthquake
Magnitude
6.6
Date-Time
10:13:22 AM (Japan)
Location
37.576°N, 138.469°E
Depth
10 km
DAMAGE
• 11 people killed
• > 1,000 injured
• 875 houses damaged
• roads and bridges damaged and
landslides occurred in Nagano,
Niigata and Toyama Prefectures
• Lifeline and Industrial damage
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Economic Impacts
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Credit: news accounts
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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www.nytimes.com
http://mdn.mainichimsn.co.jp/photospecials/graph/070716earthquake/
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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http://mdn.mainichimsn.co.jp/photospecials/graph/070
716earthquake/
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Kashiwazaki NPP
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Kashiwazaki NPP
Largest NPP and 4th largest electric power generating station in world
Source: Wikipedia
8,212 MW
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Kashiwazaki NPP records
(courtesy of P. Sollogoub, CEA)
Unit
N-S (gals)
E-W (gals) U-D (gals)
1
311
680
408
5
277
442
205
6
271
322
488
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Kashiwazaki NPP
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
http://mdn.mainichi-msn.co.jp/photospecials/graph/070716earthquake/
C. Scawthorn, 2007
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http://mdn.mainichi-msn.co.jp/photospecials/graph/070716earthquake/
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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http://mdn.mainichi-msn.co.jp/photospecials/graph/070716earthquake/
http://www.bloomberg.com/apps/news?pid= 20601087&sid=agBErYolDFhM&refer=home
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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www.washingtonpost.com
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Kashiwazaki NPP (cont)
•The reactor had to be shut down
• An electric transformer caught fire at Unit 3. but was
extinguished by noon. Units 2, 3, 4, and 7 all SCRAMed,
• Units 1, 5, and 6 shut down for the purpose of
inspection.
•Power failures were reported in over 21,700 houses.
•There are reports that water containing radioactive
material may have been leaked as a result of the quake
• Slow / partial disclosures by TEPCO
• later: crane damage
• cable damage…
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Kashiwazaki NPP (cont)
Socio-economic damage
• Slow / partial disclosures
• TEPCO management
– Appeared not to understand what was happening
– public relations plan (?)
• Decreased trust in nuclear industry (in Japan)
• 7 units shut down for
at least one year (!)
• Estimated BI $7 billion
(absolute estimate << actual)
Tsunehisa Katsumata, second from right, the president of
left,
Research Laboratory for Lifeline Engineering / Earthquake
Disaster
Prevention
Tokyo Electric
Power,
bowed inSystems
apology to Hiroshi Aida,
Department of Urban Management, Kyoto University
mayor of Kashiwazaki, for errors in reporting quake
C. Scawthorn,the
2007
damage at a nuclear plant (source: Asahi Shimbun)
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Tsunehisa Katsumata, second from right, the president of
Tokyo Electric Power, bowed in apology to Hiroshi Aida, left,
the mayor of Kashiwazaki, for errors in reporting quake
damage at a nuclear plant (source: Asahi Shimbun)
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Economic Impacts
Source: News accounts
Damage at auto parts maker Riken Corp.'s plant at Kashiwazaki city, forced:
• Toyota: 12 factories will stop Thursday afternoon and all day Friday,.
• Nissan: two factories for at least two days
• Fuji Heavy: five mini car models production stopped indefinitely
• Mitsubishi: assembly at three plants later in the week for several days
•Æ Just in time supply chain lacks reliability (observed earlier, Anshin fire)
Tokyo Stock Exchange:
• Fuji Heavy ↓ 1.82 %
• Honda shares ↓ 0.66 %
• Toyota ↓ 1.32 %
• Nissan Motor Co. ↓ 0.53 %
•Tokyo Electric Power ↓ 5 %
Fuji Xerox Co. halted a printer plant damaged in the quake.
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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http://www.nea.fr/html/general/profiles/Japan/f1.gif
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention
Systems
http://www.yomiuri.co.jp/dy/national
Department of Urban Management, Kyoto University
/20070718TDY03004.htm
C. Scawthorn, 2007
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1945
1854
1945
1707
1854
1605
1707
1498
1605
1361
1498
1096
1361
887
1096
684
887
684
91
147
102
107
137
265
209
203
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Opportunities / Challenges
• CASIFICA
– TG/IG example of international cooperation
– Many transnational risks exist – not yet examined
– For ex., Tokyo Earthquake Global Economic Impacts (?)
• Disaster Reduction Hyperbase
– Lessons of Kashiwazaki NPP immediately scrutinized by global
nuclear industry
– However, other utilities in other, in other countries?
Other supply chains?, in other countries?
– How does DRH serve these needs? Reach these users?
• AGORA (Alliance for Global Open Risk Analysis)
– How does ORA serve these users?
– What are the tools needed for these complex risks?
Come to Wednesday session on Open Risk Analysis!
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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Stay Tuned
Thanks
Research Laboratory for Lifeline Engineering / Earthquake Disaster Prevention Systems
Department of Urban Management, Kyoto University
C. Scawthorn, 2007
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