New Concepts of Risks
For Transport Infrastructure
Jonathan Slason, PE
Transportation Engineer, Beca
Jonathan Slason, PE
T...
Source: NZTA Risk Management Manual
Current Risk Approach
NZTA Risk Management Manual/Process
Specifically, the risk management process is designed to raise
awareness of threats an...
NZTA Risk Management Manual/Process
- Primary concern is on Project Out-turn costs
- Identifies simple or Advance methods ...
The Changing Landscape
What risks are there in the future that may likely impact the
way we plan, design, and construct ou...
Changing Climate
Mitigation Adaptation
Reducing the effect of transport Infrastructure on
Climate Change and Atmospheric C...
Changing Climate
- Assess what extreme weather events may
mean to infrastructure
- Develop Asset Management systems
suitab...
Changing Climate
Sources:
Presented by Lord
Stern in Auckland 8
September 2010.
Top Chart:
Meinshausen Potsdam
Climate Res...
Energy Transport
Energy Inputs
How we use Energy in the Transport Section
inputs to the Transportation
- Material Mining a...
Energy Transport Life-Cycle
Energy Inputs & GHG Outputs
Energy Transport
Energy Inputs
Energy Projected Demand &
Supply Gap
= RISK
Energy
Few Options
to substitute
Liquid Fuels
Energy
The geographic
distribution and
international supply
of fuels remains
critical.
NZ Imports nearly 50%
of refined pe...
Energy
Energy NZ Risks of Global
Oil Markets
Energy
Low-cost reserves of oil are being rapidly exhausted, forcing oil companies to turn to
more expensive sources of oi...
Energy
NZ DRAFT Energy Strategy
“International oil prices will continue to be volatile and will rise over the longer term....
Resources
China mines 93 percent of the world’s rare earth
minerals, and more than 99 percent of the world’s
supply of som...
Climate Change Energy
Growth and Demand for Resources
Transport and Infrastructure
- Increased climate and weather related...
NZTA Planning, Programme, Funding Manual
Challenges facing the transport sector
The following may put at risk the ability ...
Manage the Risks
Manage the Risks
Climate
Change &
Energy
Constraints
Fall into this
(shaded)
area of
current Risk
Analysis
Decisions and potential errors in the face of risk and uncertainty
Remember that the science predicts outcomes with risk a...
Reduce the Probability
- Mitigate GHG
- Develop Alt. Forms of Energy, esp. Low Carbon
- Reduce Demand for Energy, esp.Liqu...
Manage the Risks
Urban Form and Transport
Structure
Proximity allows for Greater
Accessibility. With Access –
higher value...
Manage the Risks
Life Cycle
Analysis
Internationally recognised processes
of Life Cycle Analysis are being used
now to rev...
Adapt our Current Infrastructure to the Changing World
Design our Future Infrastructure to be
• Least damaging to the Clim...
Questions
Jonathan Slason, PE
Jonathan.slason@beca.com
p. 09-300-9063
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Nziht Nzta Jon Slason 21 Oct2010

  1. 1. New Concepts of Risks For Transport Infrastructure Jonathan Slason, PE Transportation Engineer, Beca Jonathan Slason, PE Transportation Engineer at Beca (www.beca.com) The views expressed are those of the author and do not necessarily reflect those of Beca or any other organisation or agency. Further detail behind the issues raised is available by contacting jonathan.slason@beca.com Presentation made to the NZIHT / NZTA Annual Conference 2 November 2010
  2. 2. Source: NZTA Risk Management Manual Current Risk Approach
  3. 3. NZTA Risk Management Manual/Process Specifically, the risk management process is designed to raise awareness of threats and opportunities and to minimise such risks as: • programme/project overrun (in cost or time) • litigation • network unavailability/delay • death/injury • community and road user concern • environmental damage. Source: TRANSIT Risk Management Process Manual Current Risk Approach
  4. 4. NZTA Risk Management Manual/Process - Primary concern is on Project Out-turn costs - Identifies simple or Advance methods (probabilistic) and when to use - Discusses in general terms, Market Issues which include: - Supply and demand, labour, cost escalation, oil price, etc. SM014 NZTA Cost Estimation Manual - Primary concern is estimated Project Out-turn Costs - Escalation (prices internal to project delivery) - Level of Detail & Design Risks - Project Timing EEM Vol. 1 - Primary concern is estimated BCR Risks - User Benefits (magnitude, value, aggregate demand) - Costs - No explicit risk consideration of Climate Change and other long-term environmental trends on Benefits or Costs - No explicit risk consideration for risks for on-going maintenance of asset. Current Risk Approach
  5. 5. The Changing Landscape What risks are there in the future that may likely impact the way we plan, design, and construct our infrastructure. Important as infrastructure is around for a long time. - Roads, Bridges, Buildings, and Water - Impacts land use for years to come Global Considerations - Climate Change - Energy - Growth and Demand for Resources
  6. 6. Changing Climate Mitigation Adaptation Reducing the effect of transport Infrastructure on Climate Change and Atmospheric Conditions GHG (CO2e = CO2, CO, NH4, CH4, HFCs, etc.) Particulates (NOx, SOx, O3, aerosols) Changing our infrastructure in response and anticipation of the effects of climate change. Issues: - Global in nature. Not only difficult to effect on a local level, but other global entities affect the need for our adaptation - CO2e has been increasing, approximate rate of 2.5ppm per annum [Stern, 2008] - >350ppm CO2 results in likely probability for massive consequences for Humanity due to likely global average temperature increases [Hansen]. Infrastructure - Design criteria need to account for changes in climate - Water frequency and severity - Heat and humidity on materials
  7. 7. Changing Climate - Assess what extreme weather events may mean to infrastructure - Develop Asset Management systems suitable for developing Climate Risk - Develop contingency plans for routes, evacuation plans, and alternative modes - Integrated analysis to investigate whole of network resilience to shocks and long-term changes. (i.e. network access to port, but all roads are underwater) • Introduce low-carbon fuels; • Increase vehicle fuel economy; • Improve transportation system efficiency; and • Reduce carbon-intensive travel activity. Evaluated two cross-cutting strategies: • Align transportation planning and investments to achieve GHG reduction objectives; and • Price carbon. http://www.nzta.govt.nz/resources/research/reports/378/docs/3 78-v2.pdf NZTA Research Report: 378
  8. 8. Changing Climate Sources: Presented by Lord Stern in Auckland 8 September 2010. Top Chart: Meinshausen Potsdam Climate Research, Denmark. Source: This graph is a compilation from various sources listed at http://en.wikipedia.org/w iki/File:All_palaeotemps. png Raw data: http://www.europarl.europa.eu/comparl/tempcom/clim/sessions/20070910/meinshausen_en.pdf
  9. 9. Energy Transport Energy Inputs How we use Energy in the Transport Section inputs to the Transportation - Material Mining and Excavation - Infrastructure Construction - Vehicles/Trains/Planes (manufacture/operation) - Maintenance of System - Retiring the System Transport share of World Liquid Energy increases from 53% today to just over 60% in the future. (EIA) EIA 2010 International Energy Outlook 35% of World’s Energy And 96% of Transportation Energy comes from PETROLEUM [Babik 2009, GM] Liquid Fuels Oil Bitumen Diesel Gasoline
  10. 10. Energy Transport Life-Cycle Energy Inputs & GHG Outputs
  11. 11. Energy Transport Energy Inputs
  12. 12. Energy Projected Demand & Supply Gap = RISK
  13. 13. Energy Few Options to substitute Liquid Fuels
  14. 14. Energy The geographic distribution and international supply of fuels remains critical. NZ Imports nearly 50% of refined petrol and also imports the majority of crude for refining. Traded in US dollars on the international market exposes these trades to risks and potentially volatile market conditions. [greenstone energy FAQs]
  15. 15. Energy
  16. 16. Energy NZ Risks of Global Oil Markets
  17. 17. Energy Low-cost reserves of oil are being rapidly exhausted, forcing oil companies to turn to more expensive sources of oil. This replacement of low-cost sources of oil with higher costs sources is driving the price of oil higher. Organisations including the International Energy Agency and the US military have warned that another supply crunch is likely to occur soon after 2012 due to rising demand and insufficient production capacity. There is a risk that the world economy may be at the start of a cycle of supply crunches leading to price spikes and recessions, followed by recoveries leading to supply crunches. New Zealand is heavily dependent on oil imports and will remain so for the foreseeable future. While there is potential to substantially increase domestic production, domestic oil production cannot insulate New Zealand from global oil price shocks because New Zealand pays the world price for goods like oil. Key export-generating industries in the New Zealand economy including tourism and timber, dairy, and meat exports are very vulnerable to oil shocks because of their reliance on affordable international transport. NZ Risks of Global Oil Markets
  18. 18. Energy NZ DRAFT Energy Strategy “International oil prices will continue to be volatile and will rise over the longer term. …Energy for transport is likely to come from a number of different fuel sources.” Directly conflicts with 2010 EIA International Energy Outlook …projected high world oil prices lead many energy users to switch away from liquid fuels when feasible. In the Reference case, the use of liquids grows modestly or declines in all end-use sectors except transportation, where in the absence of significant technological advances liquids continue to provide much of the energy consumed. In the transportation sector, despite rising prices, use of liquid fuels increases by an average of 1.3 percent per year, or 45 percent overall from 2007 to 2035. Recent NZ Energy News Additional Supplies are likely to be found: However technical difficulties, costs, and Recent news on South basin, but also Mobil Exxon "A 2009 study by the Institute of Geological and Nuclear Sciences estimates that there is a 90 percent chance that reserves totalling 1.9 billion barrels of oil remain in New Zealand and a 50 percent chance there are 6.5 billion barrels. Most of these estimated undiscovered reserves are in difficult to access deposits under deep water in the Great South Basin and the Deepwater Taranaki basin.“ 'Exxon Mobil abandons Great South Basin' NZ Herald Article New Zealand’s geographical position is a serious challenge to increasing oil production. A report by Lincoln University’s Centre for Land, Environment and People (LEaP) states: “New Zealand’s isolation from the rest of the world acts as a major constraint in the attraction of international explorers. Exploration and mining companies operating in New Zealand have to bear the cost of getting equipment to and from New Zealand as well as shipping crude oil to international refineries.” [47] Potential undiscovered oil and gas resources of New Zealand, GNS http://www.med.govt.nz/uploa d/70843/Potential- Undiscovered-Oil-GNS- Science.pdf (2009) Impacts of Oil Prices on New Zealand Tourism, LEaP http://hdl.handle.net/10182/13 79 (2009) NZ Risks of Global Oil Markets
  19. 19. Resources China mines 93 percent of the world’s rare earth minerals, and more than 99 percent of the world’s supply of some of the most prized rare earths, which sell for several hundred dollars a pound. Used in defence, transport, Hybrid Cars, Electric Motors, Solar Panels, Wind turbines, etc. Prices up 300% in last year Canadian Materials Index/ US Engineering Record: - Construction materials, steel, iron, rocks, minerals, - All remain at year 2006 levels or higher Finite materials don’t always follow a true supply and demand curve. Speculation remains on supplies of some materials Prices remain high even in Deep Recession. Transport Materials: - Aggregate Supply is reducing - Recycling building / Construction Materials will increase NZ rules now on 50-100 year planning for Aggregates More social costs being considered increasing costs to develop and utilise aggregates. Recycling increases cost of business
  20. 20. Climate Change Energy Growth and Demand for Resources Transport and Infrastructure - Increased climate and weather related damage - Changing conditions for infrastructure lifespans - Increased Humidity, water vapor, warmth - Increases in violent storms and significant storm events Mitigation and Adaptation are two sides of the same coin - Adaptation shouldn’t contribute to the mitigation problems Manage the Risks Supply and Demand - Liquid Fuels remain and will remain in high demand - Supply will likely be reducing - Supply will be increasingly controlled by nationalised companies. Innovation - Infrastructure requires significant energy input throughout life-cycle - Lack of alternatives to liquid fuels for many of the inputs - High Carbon and GHG content for Unconventional Liquid Fuels Inputs - Oil is Traded Internationally and Controlled by International companies. Sold to highest bidder. - Alternative energies, high-tech innovation limited by global supply /control of materials - Population Growth increases net impact in light of efficiency gains - Increasing World Wealth is increasing demand for overall global resources
  21. 21. NZTA Planning, Programme, Funding Manual Challenges facing the transport sector The following may put at risk the ability of the transport sector to deliver the transport vision: responding to climate change energy security and cost funding of investment in infrastructure and services while keeping transport affordable increases in the environmental and social impacts of transport changing demands arising from the ageing of New Zealand’s population development pressure and its impact on transport demand global terrorism. http://www.nzta.govt.nz/resources/planning-programme-funding-manual/docs/ppfm-v1a1-full.pdf HOWEVER, Risk Analysis described in the PPFM, SM014, EEM , and National Infrastructure Unit Do Not detail the methods and approach to assess these Challenges noted. Manage the Risks NEED a new way to plan for the Probability, Scale, and Impact of these identified challenges. PROBLEM: Probability is High Scale is Large Impact potentially Huge
  22. 22. Manage the Risks
  23. 23. Manage the Risks Climate Change & Energy Constraints Fall into this (shaded) area of current Risk Analysis
  24. 24. Decisions and potential errors in the face of risk and uncertainty Remember that the science predicts outcomes with risk and uncertainty, not definitively, but indicates that risks are big in terms of possible consequences. We need to distinguish between two kinds of errors: •Type I error (false alarm) –If we accept the correctness of the science as giving us a strong signal to act, and the science turns out to have over-estimated risk, then we will have incurred possibly unnecessary costs of action, but we are likely, for example, to have valuable new technologies, cleaner, more secure infrastructure and will have saved forests. Add: Improved Network Resilience, Urban Form improvements, Less energy intensive maintenance requirements •Type II error (false negative) –If we reject the science and argue that it is misleading and do not act, and then the science turns out to be correct, concentrations will have built to very dangerous levels and it will be extremely difficult to back out because CO2 is so long lasting. Add: If we remain on high energy input track and ignore energy supply constraints, we will have VERY costly infrastructure to own, use, and maintain. If we make the wrong decision today – we may not be able to go back and implement the correct solution in the future. Basic common sense, in this case points strongly to action. Manage the Risks Source: Nicholas Stern. Auckland Lectures. 2010
  25. 25. Reduce the Probability - Mitigate GHG - Develop Alt. Forms of Energy, esp. Low Carbon - Reduce Demand for Energy, esp.Liquid Reduce the Severity - Adapt infrastructure - Develop Low Energy Forms of Infrastructure - Develop Low Energy Technology - Use Life-Cycle, Whole-of-Life Measures of Efficiency - Investigate low(er) Discount Rates - Adapt Urban Form to reduce energy requirements - Develop resiliency in infrastructure Manage the Risks
  26. 26. Manage the Risks Urban Form and Transport Structure Proximity allows for Greater Accessibility. With Access – higher values of property, higher productivity of people, less wasted transaction time. Mass: Buses, Trains, Undergrounds People: Walking, Cycling,
  27. 27. Manage the Risks Life Cycle Analysis Internationally recognised processes of Life Cycle Analysis are being used now to review Infrastructure Projects. • US DOT Example • PE International GABI Software • Many others out there. NZ National Infrastructure Plan indicates that Whole-of- Life- Costing shall be an input in the selection process of infrastructure. Use the limited dollars in the most Cost Effective Way
  28. 28. Adapt our Current Infrastructure to the Changing World Design our Future Infrastructure to be • Least damaging to the Climate • Improve overall resilience • Minimise future maintenance Assess Life-Cycle Costs using Probabilistic approaches outlining assumptions on Risks and Uncertainties of inputs. What we need: - Full-Throttle Ahead Developing Solutions to the Global Challenges coming NOW. We have recognised the need. - Limited Energy and Little $$$ to waste. - Develop appropriate infrastructure now for a more sustainable future Manage the Risks Moving Forward
  29. 29. Questions Jonathan Slason, PE Jonathan.slason@beca.com p. 09-300-9063

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