7. Major Arctic Shipping Disasters

AMSA Evaluation: Importance: 8, Uncertainty: 9, Sum: 17
Classification: Economics, Politics, Environment, Technology

The sub-Arctic region has seen four major oil spills*. The 1989 Exxon Valdez
disaster alone resulted in immediate spill clean-up cost of US$ 2.1 billion [Exxon Valdez Oil Spill Trustee Council]. The environmental impact only addresses the economic loss to humans and has
been assessed to be US$ 2.8 billion.
This KF is concerned with impact of a major shipping disaster in the Arctic in
terms of economic, environmental and political impact. Economic impact describes
the actual cost of such an accident. Environmental impact is concerned with the
loss of habitat and bio-diversity in the area of the accident. And the political
impact is concerned with the diplomatic implications of a major accident.

7.1 Minimal impact

Plausibility: 0.2
A Arctic-wide catastrophe task-force is able to deal with any disaster. The littoral
states all support this task-force. Oil spills and accidents with chemicals
and nuclear materials are contained fast and efficiently. This keeps the impact
on the environment low. Due to the existence of a working task-force insurance
companies are willing to insure shipping companies for such incidents which keeps
the economic impact minimal. And there are not political disputes about who is
to blame or in charge of the containment of the disaster.

7.2 Medium impact

Plausibility: 0.5
Each of the littoral countries has a their own disaster task-force. The coordination
of international support in case of major emergencies is slow and the critical initial
containment of spills inefficient. Hence, the impact on the environment is not kept
minimal. The overall cost of containment and rescue operations is high. Disasters
result in political friction, such as blaming the responsible country for not having
asked for international support right away.

7.3 Maximum Impact

Plausibility: 0.2
Disaster task-forces are not existent or understaffed and badly equipped. There
is no efficient containment of spills. In the aftermath the economic impact on
the shipping company is very high due to more costly clean-up of an initially
uncontained spill. The political impact is extremely high as countries blame each
other for not being prepared for such an accident.
After such a high impact disaster a consensus might be reached as to how to
better deal with such incidents. However, the damage is done.

7.4 No disaster – No Impact

Plausibility: 0.1

*1988: Odyssey, 730 MI NE of St. Johns, Newfoundland, Canada, 1026200 bbl and UMTB
American Barge 283, South of Semidi Islands, Alaska, USA, 23810 bbl; 1989: Exxon Valdez,
Bligh reef, Prince Willam Sound, Alaska, USA, 240500 bbl; 1993: Braer, Shetland, Scottland,
UK, 595238 bbl. Source: lastingnews.com

  1. #1 by Steinmueller on September 27, 2008 - 9:31 am

    I would consider major arctic shipping disasters as a wild card, even if the probability of occurance is higher than .1 during the scenario time horizon.

    Otherwise you have it in each scenario, only with different projections for the impact. You should at least include “no major disaster” (perhaps comined with “no impact”.

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  2. #2 by Marc on September 29, 2008 - 9:08 am

    I agree that the occurrence of shipping disasters is not easy to gauge. However, this KF is more concerned with the political climate. That is, the question as to how a major disaster is received and handled by the public and policy makers.

    I believe this is important enough to have it as a KF because the political climate a company operates in is part of its risk and uncertainty.

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  3. #3 by HajoEicken on October 1, 2008 - 6:29 am

    I would agree with Dr. Steinmueller, “no major disaster” due to strict enforcement of regulations, technological advances (keep in mind this is 2030) and low levels of activity should be a category as well.

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  4. #4 by w-f-weeks on October 18, 2008 - 10:29 am

    Assuming the possibility of long-term marine operations in the Arctic, I consider the probability of a major marine disaster to be close to 1 based on experience in non-icy regions. I also think that one needs to assume that this event would occur at a most inopportune time as far as safety and clean-up are concerned (i.e. when heavy pack ice is present). I also note that although mock-spill exercises in ice have been carried out in the past, the amount of real world experience in dealing with such a problem is very limited. The political ramifications of a major spill in the Arctic would be enormous.
    Incidentally the Exxon Valdez spill is a poor model for a realistic Arctic spill.

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  5. #5 by Marc on December 2, 2008 - 12:12 pm

    I have added a FP ‘No disaster – No Impact’, P=0.1. Although, I believe that this is much less likely than the occurrence of a major disaster with high impact.

    Once again, this KF is mainly meant to give stakeholders some idea about possible political consequences of a poorly handled disaster.

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