Welcome to the ARkStorm
The rain starts from light gray skies with modest winds. California farmers desperate for water look up from their work and raise their faces to the sky, thankful for the drops of moisture on their faces.
What the grateful farmers don’t know is that jets of warm, moist air that originated over the North Pacific have formed a massive storm system — what scientists call an atmospheric river — that is getting set to dump catastrophic amounts of precipitation on California.
First the rain comes in spurts. Then it pours and pours and keeps on pouring.
It’s more than enough to water parched almond trees and cotton fields. It’s enough to wipe those groves and fields away.
The story is that Noah built an ark to survive rain that fell for 40 days and 40 nights. This is what happens here and then some. No exaggeration.
Week after week, the rain comes relentlessly. After three weeks of solid rain, accompanied by hurricane-force winds, much of the state’s infrastructure and its flood control systems start to give way.
California’s first responders and flood control systems are prepared for storm and flood events that might come every couple of hundred years at maximum. They are not prepared for this.
The first major landslide — the first of tens of thousands — occurs at the picturesque community of Fort Bragg on the Mendocino Coast, where dozens of properties are crushed on the ocean side rocks below the town’s cliffs.
Soon, the news media report that the levees that hold back the Sacramento River from businesses and residents in the area’s delta towns are failing. Evacuations are hampered by flooded roads.
A video produced for the U.S. Geological Survey depicts a hypothethical but scientifically plausible storm impacting California.
Flooding swamps San Francisco, Los Angeles and heavily populated San Diego and Orange counties. The state’s capital, Sacramento, suffers a repeat of what it went through in 1861, when its streets were impassable and the governor had to be transported to his inauguration by boat.
The van of a family trying to drive away from the town of Pittsburg in the Sacramento River delta is swept into the surging river. A young couple and their three children are lost.
Dozens of migrant farm workers in California’s Central Valley are drowned before anyone knows they’re gone. They owned no vehicles in which to make their escape. As usual, it’s the poor who suffer the worst.
Flood waters in the Central Valley are at 10 feet and rising and will crest at 20 feet. It won’t be long before the valley is an inland lake 300 miles long and 20 miles wide. Floating on the surface of that massive lake are the bloated, decaying carcasses of thousands of cattle, poultry and swine, swept out of the largest agricultural center in the country and drowned by the storm.
Interstate 5 within the state is under water. Trucks bearing tens of millions in retail goods can’t get where they need to go. It will be weeks before I-5 is passable and it will require millions of dollars in repairs.
The ocean movement from the storm takes many of Southern California’s most treasured structures and smashes them.
The gorgeous terra cotta-roofed seaside racetrack grandstand at Del Mar — founded by Bing Crosby and some of his friends — is heavily damaged by the sea. The piers at Manhattan Beach, Hermosa Beach and Venice Beach are torn to pieces.
The flooding overwhelms coastal wastewater plants. Those residents who live along the concrete-lined Los Angeles River who weren’t forced out by the rain are driven out by sewage, as it erupts out of hundreds of manholes, turning the manmade river into a giant sewer.
The Terminal Island pumping station located between San Pedro and Long Beach is cut off by the floods. Abandoned by its 70-plus employees, raw sewage spews from it and runs untreated into the Pacific Ocean.
Chastened by its failures during the flooding in New Orleans after Katrina, the federal government moves much more quickly than it did in 2005 to support overwhelmed local and state emergency responders.
National Guardsmen and U.S. Army soldiers can help evacuate residents and hoist sandbags. They can’t, however, offer financial disaster recovery assistance.
As a result of this 45-day storm, there is more than $400 billion in property damage and an additional $325 billion in business interruption losses.
No more than $30 billion is recoverable through private or public insurance.
When the waters recede, more than 170 California cities and towns are insolvent, unable to cover the costs of the services they required and hamstrung by drastically reduced property and income tax collections.
Deaths number in the thousands.
The state’s agricultural economy, once the biggest in the world and already damaged by years of drought, teeters on collapse.
Goodbye Disneyland. Goodbye Rodeo Drive.
What we describe is no apocalyptic fantasy. Rain and wind in these amounts came to California in December of 1861 and didn’t leave until the following February.
Geologists studying ocean sedimentation off of the coast of California determined that atmospheric rivers have dropped this much rain on California — or more — on at least six occasions.
The most muscular academic research in this area of catastrophe modeling is that done by the U.S. Geologic Survey’s Multi-Hazard Demonstration Project (MHDP), a multi-discipline effort involving more than 100 scientists, consultants and public sector officials.
As we described above, the ARkStorm that the project modeled in 2010 would produce more than $700 billion in property and business interruption losses.
“All of these scenarios are scientifically plausible,” said Dale Cox, the project manager for the USGS Science Application for Risk Reduction, the successor organization of the MHDP. Cox co-founded the MHDP and oversaw the ARkStorm scenario.
“They are not worst case scenarios but they are in general low probability, extreme events. We’re trying to create them so that they will be accepted. If it’s too big, people are going to blow it off and nobody is going to do anything about it,” Cox said.
To create the ARkStorm scenario, the team of scientists under Cox’s direction took the science used for studying earthquake trench faults — looking at where offsets in the fault occurred with carbon dating — and applied that to the deltas and marshes of California’s coast line.
What they deduced from that geologic evidence is that atmospheric rivers — massive storms that collect huge amounts of water from the atmosphere over the Pacific and pour it on California — have occurred and could well occur again.
“The metaphor I like to use is that it’s like turning on a fire hose and pointing it at California and moving it up and down California’s coast line,” said Laurie Johnson of San Rafael, Calif.-based Laurie Johnson Consulting. She previously worked at Risk Management Solutions, the modeling firm.
Prasad Gunturi, the lead for North America-related CAT modeling research and evaluation at Willis Re, said a recent scientific report likened an atmospheric river to taking all of the water in the Amazon River and dumping it in California’s Central Valley.
For this project, Johnson focused on long-term recovery implications. Willis Re’s Gunturi pitched in on economic loss analysis.
“The whole purpose of loss modeling is to come up with a risk management strategy. So if we know what we know now, what could we do and what would be the best investment to make now,” Johnson said.
To model the amount of wind, storm surge and flooding that accompanies an ARkStorm, Cox’s team “stitched” together data from two separate storms: a winter storm that affected predominantly Southern California in 1969, and a 1986 storm that impacted predominantly Northern California.
The team also mapped, for the first time ever, what it would look like if the entire state flooded.
“The whole purpose of loss modeling is to come up with a risk management strategy. So if we know what we know now, what could we do and what would be the best investment to make now.” — Laurie Johnson, founder, Laurie Johnson Consulting
“The team had to build that from scratch,” Johnson said. “Team members worked with FEMA and the state department of water resources to develop a statewide hydrology model and figure out how flooding progressed across river systems and through time statewide,” Johnson said.
Using trench analysis carbon dating to study California’s storm history is one of the project’s legacies.
Bringing the term ARkStorm into public consciousness is another. “It’s something you hear quite commonly now with the media and the weather media. Not because we did it, but … it was a new concept,” Johnson said.
The ARkStorm scenario also showed California’s emergency responders that they were going to have to look at flooding in a whole new way.
Here was a statewide event they had never considered before.
“Central California was once a large inland sea with very low elevations in many spots. I knew that from my geoscience background,” Johnson said.
“But I don’t think people appreciated that in 1861-1862, flooding basically closed the capital, Sacramento; the whole Central Valley became a lake for more than three months. It took more than three months to drain the city,” she said.
“Nobody had looked at the statewide flows,” Cox said.
“California has really good flood fighters. We have really good emergency responders. We are looking at a scenario that would challenge them and that is what we’re trying to do,” Cox said.
Since the ARkStorm report was produced, Cox and some of his teammates have taken its hydrology and meteorology science and applied it at local levels. They’ve presented an ARkStorm scenario to officials in Ventura County.
“It was a really eye-opening experience for them,” Cox said.
Cox has also produced a study, published in January, detailing what would happen to the Lake Tahoe community in the event of an ARkStorm.
Look at these two factors alone.
One: That community takes its drinking water out of Lake Tahoe, untreated for the most part.
Two: Tahoe’s sewage treatment facilities are mostly at lake level. Should an ARkStorm strike, pumping that sewage out of the basin would become impossible.
Also, take into account that the workers who operate those sewage plants live on the other side of the mountain ridges, in more modest communities.
The snow from an ARkStorm would stop them from getting to their jobs.
“We often talk about The Big One [a big earthquake on the San Andreas Fault]; this is a bigger event,” said Anne Wein, an operations research analyst with the U.S. Geological Survey based in Menlo Park, Calif.
“What struck me was the evacuation being similar in size to a hurricane. We forget that this can happen in California,” Wein said.
Additional 2015 Black Swan coverage:
A dirty bomb detonated in Manhattan could make a ghost town of the most populous city in the U.S.
A fast-moving geomagnetic storm blasts the North American power grid, leaving a large swath of the Northeastern U.S. temporarily uninhabitable.
The Darkness of the Sun
“Daddy, wake up! Come see the rainbows!” 6-year-old Amanda LeBlanc insisted as she shook her father out of his slumber. Joel LeBlanc stirred slowly, feeling like he hadn’t slept at all.
“What? Go back to bed,” he grumbled, rolling over.
“No, Daddy you have to look,” insisted Amanda, throwing the bedroom curtains wide open. Joel squinted at the light, confused. It was way too early for sunrise, wasn’t it?
Joel hoisted himself out of bed and joined his daughter at the window, catching his breath at the sight. “Huh. You know what that is, honey? It’s called an aurora. Don’t see that every day — not in Florida anyway.”
“I’m going outside to take a picture,” Amanda declared, cantering off.
Northward, there was less wonderment and more worry. Scientists had warned that week of a large coronal mass ejection (CME) that the sun had hurled toward Earth. Only three days later, it was followed by a pair of still-larger CMEs. The latter two bursts combined during their brief journey from the sun, pushing billions of tons of highly charged particles toward Earth at unprecedented speed, thanks to the path cleared by the earlier blast.
Scientists’ predictions on the size and speed of the event fell short of the mark. But even if they’d been right about everything else, they couldn’t have gauged that the CME’s magnetic field was aligned in a way that left Earth at its most vulnerable, allowing the maximum infusion of charged plasma into the Earth’s magnetosphere. It was a recipe for a perfect solar superstorm.
Video: This 1:31 minute time lapse video by Brendan Hall shows an aurora borealis in Kalispell, Mont., that occurred over 1.5 hours in June 2015.
By the time the NOAA Space Weather Prediction Center issued an urgent warning, there were only minutes left to act. Power generation companies kicked into emergency mode, working to mitigate the impact by taking transformers offline.
But even large generators couldn’t act fast enough. Geomagnetically induced currents flowed into the power grid in a matter of minutes, overheating extra-high-voltage (EHV) transformers and frying coils, destroying or damaging hundreds.
The North Atlantic corridor was hardest hit, thanks to higher ground conductivity along the coastline. In short order, upwards of 35 million people from New York City to Washington, D.C. were suddenly without power. There was an eerie stillness that morning as schools and many businesses were forced to remain shuttered.
Backup-generator owners went in search of fuel, but most gas pumps had stopped functioning immediately or soon afterward.
ATMs were all down. Within hours, land and cell phones would fail, and water could no longer pump. Worse, wastewater treatment plants shut down, causing sewage to overflow into drinking water.
Beyond the area affected by the power outage, disruptions to global positioning systems and satellite communications wreaked havoc with cellular networks, financial transaction processing and logistics operations.
The hardy Northeasterners made the best of it at first, boiling water on camp stoves, firing up barbecues and grilling the thawing food from their freezers. But before the week was out, nerves had frayed. Residents and businesses demanded answers from utilities and government officials.
The news was bad — very bad. It’s not as if hundreds of EHV transformers were warehoused waiting to be called into service. Replacements had to be ordered. and replacement for any given transformer would be at least five months and possibly up to a year or even longer, given the high level of need and the short list of manufacturers.
Units coming from foreign manufacturers would take even longer, involving arduous and complex transportation arrangements.
Residents and business owners were stunned. Public officials explained that with no power or fuel, no water pumps or waste treatment facilities, no readily accessible food supply and badly strained emergency services, there was no option other than to evacuate the affected regions.
The impact to the economy was staggering. National companies struggled to maintain communications with evacuating employees, while putting plans in place to shift operations to other locations. But an overwhelming number of small and mid-sized local businesses without the means to relocate simply folded.
Companies with business interruption or contingent business interruption policies presumably triggered by the mandatory evacuation breathed a sigh of relief, not yet aware of the lengthy battles they’d face later on about whether or not fried transformers, or the incapacity of the power grid itself, constituted a property damage trigger under policy terms.
Supply chains nationally and globally faced upheaval as companies raced to secure secondary suppliers. Those select few companies that had chosen to take up supply chain coverage quietly congratulated themselves and used the opportunity to its fullest advantage while their competitors faltered.
Once the dust had settled, much of the North-Atlantic corridor was a patchwork of ghost towns. Members of the Army and National Guard were stationed in the region to curtail damage from looters and gangs who evaded evacution, sometimes squatting in unoccupied buildings and setting fires at night for light and warmth. Many buildings that hosted squatters would eventually need to be condemned.
Two years later, a handful of transformers still awaited replacement. Only a fraction of the evacuated population had returned, and local governments struggled to rebuild long-vacant communities. Estimates calculated the total economic cost at upwards of $2 trillion.
The Inevitable Storm
The largest solar storm in recorded history occurred in 1859. It was dubbed the Carrington Event, after British astronomer Richard Carrington, who witnessed the megaflare. He was the first to realize the link between activity on the sun and geomagnetic disturbances on Earth.
During the event, Northern Lights were reported as far south as Cuba and Honolulu. The flares were so powerful that people in the Northeastern United States could read their newspapers just from the light of the aurora. U.S. telegraph operators reported sparks leaping from their equipment — in many cases setting fire to nearby materials.
Now, take a storm of that magnitude and let it play out in the modern world. Far smaller events have occurred many times. One such storm struck in 1989, taking out Quebec’s power grid in less than two minutes, causing $6 billion in damages and leaving millions of people without power for nine hours.
For the sake of comparison, scientists measure these storms using an index based on nano-Teslas (nT). The lower the number, the harder the Earth’s magnetic field shakes when a storm hits. The Quebec storm in 1989 measured at -589 nT. The far more powerful Carrington Event is estimated at around -850 nT.
And then there was a near miss in July 2012. Had that solar blast occurred only one week sooner, the Earth would have been directly in its path, and scientists calculated the storm would have clocked in at up to -1,200 nT. The fabric of society would have been profoundly altered, and we would still be picking up the pieces today.
“The concern becomes, now that we know, do we make the choice to act?” — Kyle Beatty, president, Verisk Climate
There is more or less universal agreement among experts and scientists that another Carrington-level event or stronger is an inevitability — the only uncertainty is when. Some experts even opine that this kind of event shouldn’t even be called a Black Swan, because the probability is higher than most might realize.
In an article published in the journal “Space Weather” in 2012, solar scientist Pete Riley of Predictive Science Inc. calculated that the probability of a solar storm at the power of the Carrington Event or stronger in the next 10 years is around 12 percent.
The potential impact of such an event to our hyper-connected, electricity- and satellite-dependent society is a sobering prospect, and one that is netting an increasing amount of interest.
In 2013, Lloyd’s published the report that our scenario is partially based on, “Solar Storm Risk to the North American Power Grid,” in partnership with Atmospheric and Environmental Research Inc. (AER), a division of Verisk Climate.
“This is a topic that is drawing strong interest in the government levels at a national and international scale, because the impacts could be so large and because this is one of the only natural perils that could create simultaneous impact across continents,” said Kyle Beatty, Verisk Climate president, who worked on the study. “… When we get into an event of this size, it would impact Europe as well — it’s a global phenomenon.”
“We understood that the engineering and science communities were talking about space weather as a potentially high impact phenomenon,” added Nick Beecroft, emerging risks and research manager at Lloyd’s of London.
“But we felt that the understanding of the phenomenon and the potential impact on the insurance industry was very limited.”
Experts stress that while it’s popular to paint this level of solar superstorm as a virtual “doomsday” event, that outcome need not be the case. The key is to commit to doing something about it now.
Since the 1989 Quebec storm, the Canadian government has invested $1.2 billion into protecting the Hydro-Quebec grid infrastructure. But you have to wonder how many billions could have been saved if that investment had come sooner.
“If we were to experience a major solar storm event — and I really should say it’s a question of when, not if — there could be extreme ramifications for power grids and for all those technologies that rely on satellite navigation systems,” said Beecroft.
It would require worldwide cooperation and investment to build in resilience to key systems, he said, as well as enhanced satellite systems and technology to improve monitoring and early warning systems for space weather events. In addition, it’s likely there would be “much greater demand for specific insurance products that would be able to respond to an event of”
At the risk manager level, Beecroft said, organizations around the world should be thinking “about how they can diversify their reliance on power systems and on key technologies.”
But Beecroft and other experts drive home that there is simply no reason for all of these things to happen after the fact.
“The concern becomes, now that we know, do we make the choice to act?” Beatty asked.
Something else that needs to happen sooner rather than later is the development of strong plans and procedures, especially on the part of power generation companies, said Lou Gritzo, vice president of research at FM Global.
Gritzo said the nonprofit North American Electric Reliability Corp. (NERC) has already developed recommendations to help power generators respond in such an event.
“The big wildcard is, when push comes to shove and power generators have to make those difficult decisions about what they’re going to do, do they do the right things? And how many of them do the right things?” he said.
The ideal scenario, said Gritzo, is that when the storm hits, the power generators most likely to be affected by the storm disconnect their power supply from the grid and adequate power can be temporarily supplied to the grid by other generators in areas where the storm is not going to be as intense.
The ability to make that happen quickly, said Gritzo, could go a long way toward shifting from a doomsday scenario to one of minimal consequences.
He also said risk managers should be asking power suppliers some hard questions to help them assess the need for additional investments, such as a backup power system.
Not taking any action would be a mistake. “If there’s one number in this whole report that’s significant,” said Beatty, “it’s the estimate that the return period of a Carrington-like event is estimated at around 150 years,” a figure that can be backed up with evidence tracing back to 17 B.C.
Bottom line, he said, is that “the likelihood is high enough that we actually have a responsibility to act.”
Additional 2015 Black Swan coverage:
A 45-day superstorm floods California and dishes out economic catastrophe.
A dirty bomb detonated in Manhattan could make a ghost town of the most populous city in the U.S.
Managing Chronic Pain Requires a Holistic Strategy
Chronic, intractable pain within workers’ compensation is a serious problem.
The National Center for Biotechnology Information, part of the National Institutes of Health, reports that when chronic pain occurs in the context of workers’ comp, greater clinical complexity is almost sure to follow.
At the same time, Workers’ Compensation Research Institute (WCRI) studies show that 75 percent of injured workers get opioids, but don’t get opioid management services. The result is an epidemic of debilitating addiction within the workers’ compensation landscape.
As CEO and founder of Integrated Prescription Solutions Inc. (IPS), Greg Todd understands how pain is a serious challenge for workers’ compensation-related medical care. Todd sees a related, and alarming, trend as well – the incidence rate for injured workers seeking permanent or partial disability because of chronic pain continues to rise.
Challenges aside, managing chronic pain so both the payer and the injured worker can get the best possible outcomes is doable, Todd said, but it requires a holistic, start-to-finish process.
Todd explained that there are several critical components to managing chronic pain, involving both prospective and retrospective solutions.
Prospective View: Fast, Early Action
“Having the wrong treatment protocol on day one can contribute significantly to bad outcomes with injured workers,” Todd said. “Referred to as outliers, many of these ’red flag’ cases never return to work.”
Best practice care begins with the use of evidence-based UR recommendations such as ODG. Using a proven pharmacological safety and monitoring opioid management program is a top priority, but needs to be combined with an evidence-based medical treatment and rehabilitative process-focused plan. That means coordinating every aspect of care, including programs such as quality network diagnostics, in-network physical therapy, appropriate durable medical equipment (DME) and in more severe cases work hardening, which uses work (real or simulated) as a treatment modality.
Todd emphasized working closely with the primary treating physician, getting the doctor on board as soon as possible with plans for proven programs such as opioid Safety and Monitoring, EB PT facilities, patient progress monitoring and return-to-work or modified work duty recommendations.
“It comes down to doing the right thing for the right reasons for the right injury at the right time. To manage chronic pain successfully – mitigating disability and maximizing return-to-work – you have to offer a comprehensive approach.”
— Greg Todd, CEO and founder, Integrated Prescription Solutions Inc. (IPS)
Alternative Pain Management Strategies
Unfortunately, pain management today is practically an automatic move to a narcotic approach, versus a non-invasive, non-narcotic option. To manage that scenario, IPS’ pain management is in line with ODG as the most effective, polymodal approach to treatment. That includes N-drug formularies, adherence to therapy regiment guidelines and inclusive of appropriate alternative physical modalities (electrotherapy, hot/cold therapy, massage, exercise and acupuncture) that may help the claimant mitigate the pain while maximizing their ongoing overall recovery plan.
IPS encourages physicians to consider the least narcotic and non-invasive approach to treatment first and then work up the ladder in strength – versus the other way around.
“You can’t expect that you can give someone Percocet or Oxycontin for two months and then tell them to try Tramadol with NSAIDS or a TENS unit to see which one worked better; it makes no sense,” Todd explained.
He added that in many cases, using a “bottom up” treatment strategy alone can help injured workers return to work in accordance with best practice guidelines. They won’t need to be weaned off a long-acting opioid, which many times they’re prohibited to use while on the job anyway.
Chronic Pain: An Elusive Condition
Soft tissue injuries – whether a tear, sprain or strain – end up with some level of chronic pain. Often, it turns out that it’s due to a vascular component to the pain – not the original cause of the pain resulting from the injury. For example, it can be due to collagen (scar tissue) build up and improper blood flow in the area, particularly in post-surgical cases.
“Pain exists even though the surgery was successful,” Todd said.
The challenge here is simply managing the pain while helping the claimant get back to work. Sometimes the systemic effect of oral opioid-based drugs prohibits the person from going to work by its highly addictive nature. In a 2014 report, “A Nation in Pain,” St. Louis-based Express Scripts found that nearly half of those who took opioid medications for more than a month in their first year of treatment then refilled their prescriptions for three years or longer. Many studies confirm that chronic opioid use has led to declining functionality with reduced ability to recover.
This can be challenging if certain pain killers are being used to manage the pain but are prohibitive in performing work duties. This is where topical compound prescriptions – controversial due to high cost and a lack of control – may be used. IPS works with a reputable, highly cost-effective network of compound prescription providers, with costs about 30-50 percent less than the traditional compound prescription
In particular compounded Non-Systemic Transdermal (NST) pain creams are proving to be an effective treatment for chronic pain syndromes. There is much that is poorly understood about this treatment modality with the science and outcomes now emerging.
Retrospective Strategies: Staying on Top of the Claim
IPS’ retrospective approach includes components such as periodic letters of medical necessity sent to the physician, peer-to-peer and pharmacological reviews when necessary, toxicology monitoring and reporting, and even addiction rehab programs specifically tailored toward injured workers.
Todd said that the most effective WC pharmacy benefit manager (PBM) provides much more than just drug benefits, but rather combines pharmacy benefits with a comprehensive ancillary suite of services in a single portal assisting all medical care from onset of injury to RTW. IPS puts the tools at the adjustor fingertips and automates initial recommendations as soon as the claim in entered into its system through dashboard alerts. Claimant scheduling and progress reporting is made available to clients 24/7/365.
“It comes down to doing the right thing for the right reasons for the right injury at the right time,” Todd said, “To manage chronic pain successfully – mitigating disability and maximizing return-to-work – you have to offer a comprehensive approach,” he said.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with IPS. The editorial staff of Risk & Insurance had no role in its preparation.