Of black swans, wetlands, nuclear power and worst-case scenarios

Torsdag, 6. Maj 2010     2 kommentti(a)

The oil spill that has hit the U.S. coast and further threatens large swathes of the coast from Louisiana to Florida is a tragic accident, with extensive social, environmental and economic consequences. The extent of the oil flow has already exceeded the British Petroleum worst-case scenario and overwhelmed the private sector’s ability to respond to it. The final costs of the disaster are at the moment literally incalculable.

The accident and its repercussions are an excellent example of a Black Swan: The accident and its repercussions are on the one hand a surprise to many observers, yet in retrospect everyone knew such an accident was only a matter of time. As a black swan event, the accident will also have a broad impact on society and politics for years to come.

What does this imply for Finland? The lessons of the Deepwater Horizon disaster are many, including potentially new techniques and technologies for handling a future oil-tanker disaster near our shores. However, from a Black Swan perspective there is a particularly striking consideration:

As Finnish parliament debates giving permits to new nuclear power-plants, the fact that BP’s worst-case scenario was exceeded should give some pause. Ultimately, because BP described it as unlikely or virtually impossible that such an accident would occur, it did not plan for the eventuality. Worst case scenarios routinely underestimate the likelihood and impact of events, because they are often based on probabilistic calculations built around what are commonly known as bell-curves. No one can say what the probability of a nuclear accident is, just like no one can say what the probability of Deepwater Horizon exploding was – but one day it just happened.

The lesson is not that we should stop using hydrocarbons or nuclear energy merely that worst-case scenarios built by companies with a vested financial interest – profit motive – are rarely truly the worst-case.

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Keskustelu (2 kommenttia)

9.5.2010, Kenneth Sikorski


While the failure to prepare a back-up contingency plan for a near impossible scenario clearly lies with BP, the lion share of the problem, why the leakage was allowed to proceed without a major effort to halt it, lies with the Obama administration.

US president Barack Obama only started to address the issue 8 days after the explosion, and then, only half heartedly. If US ships had been summoned to the area within 5 to ten hrs of the incident happening, the flow of oil could have been contained.

The only thing this president was concerned in doing was to publically blame and point the finger at BP, and do nothing.

Yes major oil spills are a threat, and they happen once in awhile, but more often then not, they are created through ineptitude on many levels. The same could be said of the nuke/electric industry, of which I'm a strong supporter as yourself.

I however deem it as unfair if someone were to apply the same logic to the nuclear power industry, like Three-Mile Island and Chernobl accidents. Mother nature just sometimes throws you a curve and the best course of action is to suck it up and take it.

The Obama administration dropped the ball big time here, and it's interesting to see the media's lack of interest in discovering what Obama knew, when he knew it and what exactly he did in the hours after the explosion became known.


10.5.2010, Charly Salonius-Pasternak

Mr. Sikorski,

Thanks for your comments and thoughts – let’s see if we can get a discussion going:

You imply that what happened at/to Deepwater Horizon was a near impossible scenario, but clearly it is not impossible. Moreover, it seems that the event was much more likely than ‘the probabilities’ would have suggested – the probabilities were wrong.

You also write that accidents such as these “are created through ineptitude on many levels.” That is true of almost all modern industrial accidents; they are rarely the result of one thing going wrong. Yet, we continue to hear from both the oil and nuclear-power industries that some scenario is highly unlikely because there are so many safety mechanisms and that all of them are not going to fail.

The reason for those kinds of statements tends to be two-fold: (1) when you add up the probabilities of multiple safety mechanisms failing at or nearly at the same time, you get a very small number. The problem is, though the calculations may be technically correct, they are based on an incomplete and erroneous understanding of the likelihood of events. The second (2) reason is quite simply based on the profit motive: If you first insist something is very unlikely to happen and then it happens, it is much easier to get society as a whole to cover some of the costs. Consequently governments must ensure that any industry (including the nuclear power one) maintains and updates plans needed for scenarios when multiple things fail, and ensures that nuclear-power companies have large emergency funds (even pooled between many companies in different countries).

You also suggest that sometimes nature – things beyond our control – create disasters. That’s true, and sometimes the best we can do is consequence mitigation. However, since we know that it is possible for these kinds of events to happen, both governments and private industry should be prohibited from saying that an event could not be imagined or prepared for because nature is/was involved. If their imagination and planning is so limited that it cannot conceive of a probable event, it’s time to get people involved who do have the needed imagination and power to effect changes.

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