Estimating the Economic Impacts of Terrorist Events at the Individual Chemical Facilities: Initial Results   [open pdf - 24MB]

From the Executive Summary: "The U.S. Congress enacted Section 550 of the 'Homeland Security Appropriations Act of 2007, P.L. 109-295', to direct the U.S. Department of Homeland Security (DHS) to identify and secure the Nation's high-risk chemical facilities. Within DHS, the Infrastructure Security Compliance Division (ISCD) is responsible for implementing the Chemical Facility Anti-terrorism Standards (CFATS) regulatory process. Part of this process requires determining whether and how facilities should be regulated based on how critical they are to the national economy. ISCD partnered with Sandia National Laboratories (SNL) to develop a method for identifying economically critical chemical facilities. SNL first conducted a comprehensive review of historical chemical-facility events to understand the types of impacts caused by disruption to a chemical facility. It then reviewed potential methods for measuring the economic criticality of chemicals and facilities and ultimately developed a methodology based largely on the economic impacts literature. Research was then conducted on specific alternative approaches for estimating how the loss of a chemical facility could cause national-level economic impacts. The method identifies national economic impacts by measuring the costs of four primary impact types: (1) Cleanup and decontamination of the chemical facility or affected area; (2) Repair or replacement of chemical facility equipment; (3) Local business interruptions caused by the chemical event and cleanup; and (4) Chemical supply-chain interruptions. […] SNL's general finding is that terrorist events at a chemical facility are not likely to cause national-level economic impacts, but that impacts could be significant at the local level. The initial results suggest average gross domestic product (GDP) impacts for onsite and offsite events in the hundreds of millions of dollars and billions of dollars, respectively, with nearly 25 percent of the GDP impact occurring in the first year."

Report Number:
SAND 2014-19830; Sandia National Laboratories 2014-19830
Public Domain
Retrieved From:
Office of Scientific and Technical Information, Department of Energy: http://www.osti.gov/
Media Type:
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