The U.S. Gulf Coast: Risk and Adaptation. Brent Dorsey, Director Corporate Environmental Programs Entergy

Transcription

1 The U.S. Gulf Coast: Risk and Adaptation Brent Dorsey, Director Corporate Environmental Programs Entergy International Energy Agency Experts Group on R&D Priority Setting and Evaluation November 13-14, 2013

2 Risk and Adaptation Brief Introduction to the Adaptation Study Risk Assessment Adaptation Supply Curve Adaptation initiatives Blue Ribbon Resiliency Communities Entergy asset resiliency

3 Project objective and approach Objective: Develop a comprehensive, objective, consistent fact base to quantify climate risks in the U.S. Gulf Coast and inform economically sensible approaches for addressing this risk First comprehensive analysis of climate risks and adaptation economics along the U.S. Gulf Coast Illustration of hurricane paths/ intensities Granular, bottom-up analysis using a risk framework: Modeled 23 asset classes across residential, commercial, infrastructure, oil, gas and utility Modeled 800 zip codes across 77 counties Simulated ~10,000 hurricane years across multiple climate scenarios Modeled over 50 adaptation measures TX LA MS AL GA Engaged with experts across the Gulf Coast FL First time broad range of Gulf Coast stakeholders and experts engaged Discussed with over 100 global, regional academics, government officials, industry experts and NGOs Used credible, publicly available sources (e.g., IPCC climate scenarios, FEMA, BEA, DOE EIA, MMS, Energy Velocity,) 2

4 Climate change is expected to increase loss over time Extreme climate scenario Average climate scenario No climate change Annual average expected loss in 2010 and 2030 $ Billions; 2010 dollars 39.5 Climate scenarios Average annual losses can increase significantly by 2100 (to $ M) Percent of area s capital investment Percent of GDP No climate change; includes impact of subsidence 2 Based on BEA historical average of capital investment (private and total government expenditures) as a percentage of GDP Source: Swiss Re 3

5 Damage from storm surge/relative SLR primarily occurs in Louisiana Storm surge expected average losses across the U.S. Gulf Coast 2030 Average climate change Urban center with population of 1 MM+ Urban center with population of 0.3 to 1 MM Losses $ MM, 2010 $ > LA MS AL Port Arthur Baton Rouge TX Houston Mobile New Orleans Corpus Christi Major storm surge damage expected in Louisiana coastal areas SOURCE: Swiss Re 4

6 Strong annual expected wind loss may also occur in TX Wind expected average losses across the U.S. Gulf Coast 2030 Average climate change TX Port Arthur LA Baton Rouge MS Urban center with population of 1 MM+ Urban center with population of 0.3 to 1 MM AL Losses $ MM, 2010 $ > Houston Mobile New Orleans Corpus Christi Wind poses a significant threat to residential areas further inland SOURCE: Swiss Re 5

7 Energy assets We are considering a range of energy assets in this analysis Illustrative view of Gulf Coast Energy assets, 2030 TX Chemical Plants $205 bn by 2030 LNG Facilities $7 bn by 2030 Refineries $107 bn by 2030 Oil pipelines $12 bn by 2030 Natural Gas pipelines $60 bn by 2030 LA T&D & other $258 bn by 2030 MS Land Rigs <$1 bn by 2030 Shallow water production facilities $1 bn by 2030 Oil and gas prod. equipment $5 bn by 2030 AL Gas processing plants $8 bn by 2030 Power generation $80 bn by 2030 Refineries Petrochemical plants LNG facilities Power generation Shallow water production facilities Deep water production facilities Other Oil and Gas 2 Other Utility 2 We have taken a granular view of energy assets Generated bottoms up replacement valuation and geospatial distribution of assets Offshore pipelines $68 bn by 2030 Deep water production facilities $80 bn by 2030 Offshore Rigs $37 bn by

8 Potentially attractive measures can address the increase in annual loss between today and 2030 and keep the risk profile of the region constant Cost/benefit 0 Incremental 35 Average increase in loss annual under average loss in change $7.3 billion is $21.5 bn Sandbags Roof cover, retrofits Refineries levees Resilience, new distribution Higher design specifications for offshore production Beach nourishment Roof wall, new builds Levees, petrochemical plants, high risk Disconnectable FPSO Replace semisubs w/ Drill Ships Roof shape Home elevation, new builds, high risk Resilience, retrofit distribution, low risk Local levees, high risk Roof wall, retrofits, high risk Levees Wetlands restoration Opening protection, retrofits Roof wall, retrofits, low risk Barrier island restoration Opening protection, new builds 2030 Loss averted $ bn Home elevation, retrofits, low risk 7

9 Blue Ribbon Resilient Communities - BRRC Entergy and America s Wetland Foundation (AWF) Entergy and AWF co-sponsors of the BRRC Leadership and participation Leverage existing relationships in the communities Expansion to include broader group of stakeholders Industry Other utilities Expand to other states Blue Ribbon Resilient Communities: Envisioning the Future of America s Energy Coast Co-Chairs Louisiana Lt. Governor Jay Dardenne; Texas TCEQ - Buddy Garcia Membership state officials from Texas, Mississippi, Alabama BRRC as a vehicle to assess the resiliency of coast communities Example assessment tool BRRC schedule 8

10 Resilient Communities BRRC Event Schedule February January Press Conference Belle Chasse, LA Mobile County, AL March Calcasieu Parish Lake Charles, LA May Plaquemines Parish, LA June Harris/Montgomery/Ft. Bend Counties, TX September Terrebonne/Lafourche Parishes, LA March South Padre, TX March Baldwin County, AL April Iberia/St. Mary Parishes, LA May New Orleans, LA October Harrison/Hancock Counties, MS November Galveston County, TX 9

11 Resilient Communities BRRC Meeting Locations 10

12 Resiliency modeling approach and benchmarking graphic representation * How Resilient is your Coastal Community USAID, NOAA,

13 Resiliency modeling approach and benchmarking BRRC Results 12

14 Entergy Asset Resiliency Utility Operations Focus on resiliency of Entergy assets T&D Generation Vegetation Management Expansion to include other utilities Technical Conferences set for Texas and Louisiana Lamar University Beaumont April 12, 2012 Louisiana State University Baton Rouge May 17,

15 Entergy Asset Resiliency 14

16 Entergy Asset Resiliency 1.00 Cost/benefit ratio Attractive measures can avert ~$830 MM in 2030 losses D Resilience new LP Potentially attractive measures, details follow D Resilience retrofit LP Cumulative Capex required T Resilience new LP ,000 1,200 T Vegetation Mgmt HP D Vegetation Mgmt HP T D Resilience new HP T Resilience new HP Resilience Generation growth in T Vegetation Mgmt LP D - Resilience retrofit HP low risk areas retrofit HP Generation levees HP 1,400 Cumulative capex required T Resilience retrofit LP 1,600 Resilient distribution lines (both new builds and retrofits) are key actions Vegetation management has potential to reduce losses at C/B < 1 Transmission resilience efforts tend to be attractive only in high risk areas Note: HP refers to High Priority areas (zip codes with high average losses) ; LP refers to Low Priority areas (zip codes low average losses) 1 Benefits include utility property damage + utility business interruption + commercial and non-energy industrial business interruption aversion Source: Swiss Re 15

17 Risk and Adaptation Summary Risk Assessment - $14 billion/yr in 2010 Cumulative losses of $350 billion by 2030 Adaptation Supply Curve can help reduce growth in loss Adaptation initiatives Blue Ribbon Resiliency Communities Entergy asset resiliency

18 The U.S. Gulf Coast: Risk and Adaptation Questions Brent Dorsey Entergy The Woodlands, TX (281)