How to Deal with Low Probability, High Impact Risks

By Bob Shively, Enerdynamics’ President and Lead Instructor

A pipeline explodes and bursts into flames in California.  An earthquake followed by a tsunami results in nuclear disaster in Japan.  Once the initial impacts have been addressed, serious questions follow: What happened and why?

The media and general public often question how or why the utility companies could operate such a dangerous system.  Why didn’t they anticipate such disaster and prevent it from happening? Meanwhile, engineers and technicians study the accident with greater focus and attempt to learn specifically what happened and how future systems can be designed and/or operated differently to avoid such disaster in the future.

A good example of this scenario is the recent nuclear disaster in Japan.  In the U.S., the
Nuclear Regulatory Commission (NRC) quickly instituted a task force that assessed whether U.S. nuclear power plants are prepared for a natural disaster on the scale of what happened in Japan in March 2011.  On July 12, 2011, the task force released its
findings (  Based on the report’s revelations, the task force recommended numerous changes focused on strengthening units’ resistance to failure during disasters and improving disaster-response plans.

Chairman of the NRC Jeremy Jaczko said in a speech July 18, 2011, that he believes the agency should act within 90 days to require nuclear power plants to bolster emergency preparedness. (It should also be noted that he said the units are currently safe.) Whether or not that occurs will depend on the Chairman and votes from the four other commissioners. (View the current makeup of the NRC here:

So why isn’t everyone in favor of enhanced safety?  Quite simply, it costs time and money.  Already, the President and CEO of the industry group Nuclear Energy Institute,
Marvin Fertel, stated that the as the NRC considers changes it “should expect the staff to justify the value of any new or revised requirements.”  This says it all: Change means increased costs, which either means reduced energy company profits and/or increased electric rates for consumers.

According to the NRC, the chance of major damage at any single U.S. plant is less than 1 in 10,000. Are we as a society willing to spend millions – maybe even billions – of
dollars to protect against this?  That is a question we need to explore thoroughly given today’s energy infrastructure.

About Enerdynamics

Enerdynamics was formed in 1995 to meet the growing demand for timely, dynamic and effective business training in the gas and electric industries. Our comprehensive education programs are focused on teaching you and your employees the business of energy. And because we have a firm grasp of what's happening in our industry on both a national and international scale, we can help you make sense of a world that often makes no sense at all.
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