Case Study: Risk Mitigation for Hurricanes near Texas Coast Oil Refineries

Case Study: Risk Mitigation for Hurricanes near Texas Coast Oil Refineries

Kenneth David Strang (State University of New York, USA and APPC Research, Australia)
Copyright: © 2012 |Pages: 11
DOI: 10.4018/ijrcm.2012040104
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Abstract

This paper is a case study about the devastation of Hurricane Ike striking Galveston and Sabine Pass on the Texas Gulf Coast. Authentic field research, historical analysis, informant accounts, and basic statistical analysis of simulated data were used as a methodology. Citations are given to news stories, maps, photographs, and videos showing the damage still remaining four years after the last hurricane. Professors can use this information to create student assignments in any of the following disciplines: business, environment/natural sciences, operations management, and computer science, engineering, as well as in insurance or emergency services training programs. The first section provides background for students (including numerous research questions), while the latter part contains suggested answers to selected problems. The learning objectives are: apply project management theory to create a risk management plan and a schedule for the mitigation steps when a hurricane is forecasted, and then perform sensitivity analysis of the probabilities using statistical techniques.
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Introduction

Camping on the Texas Gulf coast beach at Sea Rim State Park (http://www.tpwd.state.tx.us) is a great way to observe the devastation remaining almost four years since Hurricane Ike struck (Figure 1). It is a privilege for city-dwelling professors to drive a car onto the beach and pitch a tent under the stars, a safe distance from the ocean but close enough so the sound of lapping waves drown out the helicopter noise (as workers are flown to and from off-shore oil rigs at regular intervals throughout the day and night).

Figure 1.

Researchers beach-camping at Sea Rim State Park, TX post-hurricane site (January 12, 2012)

Actually the beach was the only place left to camp at the immense 4141-acre Sea Rim State Park since hurricanes destroyed buildings, roads, wildlife, and land along the north east Texas coast, generating the highest tide surge ever recorded in Sabine Pass at 25 feet (NWS, 2008). Not surprisingly, a modest daily fee of $13 furnishes only a beach-camping site and access to a state-maintained portable outhouse facility.

The learning objective of this case study is to apply statistics and project management theories to plan a risk mitigation strategy, once a hurricane is approaching, then analyze the probabilities. The scope of this plan will depend on whether the focus is on the individual (as is the case here) or on a municipality.

Literature Review

Sabine Pass TX is a risky place to live or operate a business, as evidenced by hurricanes in 1886, 1900, 1915, followed by increasingly devastating hurricanes Audrey (1957), Rita (2005), and Ike (2008). More so, this area is a risky place to live or operate a business because of the numerous oil and gas refineries at nearby Port Arthur only 8 miles upriver (Gonzalez & Bustillo, 2010).

Gulf Coast environmentalist Wendi Hinson (2008) posted a YouTube video right after hurricane Ike struck to illustrate the wind and flood damage at Sea Rim State Park. Aerial photographs taken by USGS (2008) show Hurricane Ike’s impact on September 9 and after September 15 (Figure 5 reprinted with permission of USGS, in the Appendix).

Figure 5.

Gantt schedule and critical path of hurricane risk mitigation using two resources

The USGS photos reveal that the Sea Rim State Park building was wiped out by Ike, the land was flooded miles inshore, and the beach was eroded – damage was estimated at “$3.4B” by FEMA (2008, p. 17).

The evidence of hurricane devastation in nearby Port Arthur, TX (at the time of writing) includes destroyed and condemned houses, garbage strewn about fields and beaches, along with an exposed section of in-use 4 inch pipeline going from a field collection station just off highway I-87 near Sabine Pass TX heading out to a production oil rig in the gulf (which looked to be approximately 1 mile off the coast).

Readers may recall that after hurricane Rita struck in 2005 the television show “Extreme Makeover: Home Edition” filmed a special episode in Sabine Pass TX where they rebuilt the local fire station and donated a new $400,000 fire truck to the municipality (ABC, 2006).

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