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Flood Risk

Protecting Dam Breach Inundation Zones

Dam failures are a low probability but high consequence event, best addressed by preparation and maintenance.
By: | June 1, 2017 • 7 min read

After a five-year drought, the rains finally returned to California this winter. Lake Oroville, which was formed in 1967 at the foot of the Sierra Mountains by the nation’s tallest dam, began to refill.

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An atmospheric river, colloquially known as a “Pineapple Express,” continued dropping water at such a pace that it replenished the reservoir and then some. The swollen lake forced the excess water onto an emergency spillway alongside the Oroville Dam for the first time in half a century.

The spillway cement crumbled and sent a cascade of water down the mountainside. Engineers feared the erosion compromised not only the spillway but also the 770-foot-tall earthen dam.

An emergency evacuation was hastily ordered and nearly 190,000 residents were forced to flee their homes. Traffic clogged roads. Fortunately, no life was lost and water levels eventually receded.

For many, this crisis is a wake-up call for renewed assessment of the aging infrastructure of the U.S. dam system and the emergency response plans drawn to prevent loss of life in the event of a failure.

Dams Exceeding Effective Dates

Nearly all of the 700 dams managed by the U.S. Army Corps of Engineers are more than 30 years old. More than half have reached or exceeded the 50-year service lives for which they were designed. Oroville Dam turns 50 next year.

Tim McCarty is a risk control manager at Trident Public Risk Solutions, which insures a wide range of municipalities including those in close proximity to a dam. His statistics on the aging dam system in the U.S. are alarming.

“The average age of our dams nationwide is 56 years,” he said. “And the average age of a failed dam is 62 years. “So we’re kind of reaching that point where we’re starting to have some very old infrastructure and if it’s not properly maintained we may see repeats of this type of an incidence,” McCarty said.

Tim McCarty, risk control manager, Trident Public Risk Solutions

The Federal Emergency Management Agency says dam failures are a “low probability but high consequence” event. Due to the rarity, many people who live downstream in “dam breach inundation zones” are completely unaware of the potential hazard. But they are, in fact, at the mercy of the dam’s ongoing health.

“The only time the concept is front and center is when water is rushing over the dam,” said John Dickson, president of NFS Edge Insurance Agency.

“I worry constantly that that’s a total disservice to the American people. We need to have the conversation when the sun is shining.”

Dams are a vital part of the U.S. infrastructure. They provide flood protection, water supply, hydropower, irrigation and recreation. But all it takes is one busy muskrat to compromise a dam’s integrity and cause a breach.

The operators of the Oroville Dam were advised in 2005 to shore up the spillway with concrete. For a dozen years, the expensive recommendation was tabled. The reasoning was the emergency spillway was never used because the lake water never rose high enough.

When it finally did, the emergency response — mass evacuations and helicopters dropping dirt and boulders to fortify the dam — averted a catastrophe. But it was an expense way beyond the cost of maintenance. And some never received notice of the evacution, according to the Associated Press.

Dams Fail Quickly

Every four years, the American Society of Civil Engineers issues a “Report Card for America’s Infrastructure.” Bridges, roads, and tunnel systems are evaluated on capacity, condition, funding, future need, operation and maintenance, public safety, resilience and innovation.

Dams received a “D” grade in the 2017 report released in March. The Army Corps of Engineers estimated it would take $45 billion to fix aging, yet critical, high-hazard potential dams.

It’s not only dams that are in need of repairs. The U.S. received a “D+” overall on 16 areas of infrastructure. To raise the overall infrastructure grade and maintain our global competitiveness, Congress and the states must invest an additional $206 billion, according to the report.

“The average age of our dams nationwide is 56 years. And the average age of a failed dam is 62 years.” —Tim McCarty, risk control manager, Trident Public Risk Solutions

State agencies regulate most of the nation’s 90,000 dams. Unlike bridges and roads, the U.S. government may inspect the dams but it doesn’t maintain most of them. More than 65 percent are privately owned and those owners may lack the money needed for adequate maintenance.

Experts say dam owners need to know how their structures are aging and prepare for the repairs that need to be done. They also need to develop a time line for replacement and know how to respond if the dam fails.

It is most important to conduct regular inspections and deal with what seem to be minor issues immediately.

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“Many people just think you build a dam and it’s just there and fades into the background,” McCarty said.

“But it really is an active system that has to be maintained — just like a road or a bridge.”

Gritzo speaks with clients about opportunities to retrofit facilities and fill in the weak spots. More often than not, an engineer looks at an aging structure and weighs when it is best for a new build. The cost of that is often too challenging, Gritzo said.

Unlike a river flooding over its banks, a dam breach may occur with little to no warning.

An emergency response plan is needed to lay out the time required to get mitigation efforts in place and who is responsible for completing each task.

Conduct Hazard Assessments

“With a dam breach, when it fails, it fails quickly, the water comes out quickly and there’s a limited amount of time,” said Gritzo.

Risk managers need to conduct solid hazard assessments in the event one of these dams has a catastrophic failure. FM Global uses tools such as complex computer models to calculate different breach scenarios and determine where the water might go and how much flooding might occur when it gets there.

The insurer works with clients to decide if that amount of water is something they can protect a facility against, or if it’s too large.

“If it’s a meter of water or less, you can protect against it,” Gritzo said. “That’s an easy cut-off point.”

More than a meter and there are fewer protection measures available.

There were nearly 15,500 dams designated as “high-hazard” in 2016. Of those, about 2,170 dams are deemed “deficient high-hazard” due to the lack of investment.

When a dam is designated a “high hazard,” it means there’s a potential for loss of life if it fails. All high hazard dams require an emergency action plan (EAP). Dams with a “low hazard” or “significant hazard” may have a low expectation for loss of life but still carry potential for damage to surrounding terrain, roads or buildings.

As of 2015, a quarter of dams designated “high hazard” lack an EAP. Sometimes, dam owners don’t even know they are labeled high hazard, McCarty said.

“The only time the concept is front and center is when water is rushing over the dam.” — John Dickson, president, NFS Edge Insurance Agency

Risk managers should contact the authority or municipality that creates the EAP to start ongoing communication and organize emergency drills.

“The time to be swapping business cards and introducing yourself is not when there’s an emergency,” Gritzo said.

McCarty periodically reviews the state assessments of dams in his clients’ communities to ascertain the condition of the dams and what ongoing maintenance has been done. He also checks that each community has an EAP in place should something occur.

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“Our clients are doing a great job with it, but we know that there are a lot of dams that aren’t getting the attention they need,” McCarty said.

“There has to be a more robust conversation around flood,” said Dickson of NFS Edge.

“The way we do that is not responding in the face of imminent disaster, but having the conversation when the levee is not about to be breached or the spillway is not being activated because the dam is at historic highs.”

Municipal leaders should address any ongoing maintenance needed, the EAP they have in place and the responsibilities that go along with having a dam, McCarty said.

“We’ve had an incident here that has heightened our awareness. Those things tend to tail off as time passes,” McCarty said. “We really need to keep this in our collective memories otherwise we’ll see more and more of these incidents occur.” &

Juliann Walsh is a staff writer at Risk & Insurance. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

As a professor of business, Jack Hampton knows firsthand the positive impact education has on risk managers as they tackle growing risks.
By: | April 9, 2018 • 4 min read

R&I: Who is your mentor and why?

Ellen Thrower, president (retired), The College of Insurance, introduced me to the importance of insurance as a component of risk management. Further, she encouraged me to explore strategic and operational risk as foundation topics shaping the role of the modern risk manager.

Chris Mandel, former president of RIMS and Risk Manager of the Year, introduced me to the emerging area of enterprise risk management. He helped me recognize the need to align hazard, strategic, operational and financial risk into a single framework. He gave me the perspective of ERM in a high-tech environment, using USAA as a model program that later won an excellence award for innovation.

Bob Morrell, founder and former CEO of Riskonnect, showed me how technology could be applied to solving serious risk management and governance problems. He created a platform that made some of my ideas practical and extended them into a highly-successful enterprise that served risk and governance management needs of major corporations.

R&I: How did you come to work in this industry?

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From a background in corporate finance and commercial banking, I accepted the position of provost of The College of Insurance. Recognizing my limited prior knowledge in the field, I became a student of insurance and risk management leading to authorship of books on hazard and financial risk. This led to industry consulting, as well as to the development of graduate-level courses and concentrations in MBA programs.

R&I: What was your first job?

The provost position was the first job I had in the industry, after serving as dean of the Seton Hall University School of Business and founding The Princeton Consulting Group. Earlier positions were in business development with Marine Transport Lines, consulting in commercial banking and college professorships.

R&I: What have you accomplished that you are proudest of?

Creating a risk management concentration in the MBA program at Saint Peter’s, co-founding the Russian Risk Management Society (RUSRISK), and writing “Fundamentals of Enterprise Risk Management” and the “AMA Handbook of Financial Risk Management.”

A few years ago, I expanded into risk management in higher education. From 2017 into 2018, Rowman and Littlefield published my four books that address risks facing colleges and universities, professors, students and parents.

Jack Hampton, Professor of Business, St. Peter’s University

R&I: What is your favorite book or movie?

The Godfather. I see it as a story of managing risk, even as the behavior of its leading characters create risk for others.

R&I: What is your favorite drink?

Jameson’s Irish whiskey. Mixed with a little ice, it is a serious rival for Johnny Walker Gold scotch and Jack Daniel’s Tennessee whiskey.

R&I: What is the most unusual/interesting place you have ever visited?

Mount Etna, Taormina, and Agrigento, Sicily. I actually supervised an MBA program in Siracusa and learned about risk from a new perspective.

R&I: What is the riskiest activity you ever engaged in?

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Army Airborne training and jumping out of an airplane. Fortunately, I never had to do it in combat even though I served in Vietnam.

R&I: If the world has a modern hero, who is it and why?

George C. Marshall, one of the most decorated military leaders in American history, architect of the economic recovery program for Europe after World War II, and recipient of the 1953 Nobel Peace Prize. For Marshall, it was not just about winning the war. It was also about winning the peace.

R&I: What about this work do you find the most fulfilling or rewarding?

Sharing lessons with colleagues and students by writing, publishing and teaching. A professor with a knowledge of risk management does not only share lessons. The professor is also a student when MBA candidates talk about the risks they manage every day.

R&I: What is the risk management community doing right?

Sensitizing for-profit, nonprofit and governmental agencies to the exposures and complexities facing their organizations. Sometimes we focus too much on strategies that sound good but do not withstand closer examination. Risk managers help organizations make better decisions.

R&I: What could the risk management community be doing a better job of?

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Developing executive training programs to help risk managers assume C-suite positions in organizations. Insurance may be a good place to start but so is an MBA degree. The Risk and Insurance Management Society recognizes the importance of a wide range of risk knowledge. Colleges and universities need to catch up with RIMS.

R&I: What emerging commercial risk most concerns you?

Cyber risk and its impact on hazard, operational and financial strategies. A terrorist can take down a building. A cyber-criminal can take down much more.

R&I: What does your family think you do?

My family members think I’m a professor. They do not seem to be too interested in my views on risk management.




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]