I was recently writing an article for the Hazar Strateji Enstitüsü / Caspian Strategy Institute (HASEN) on the subject of physical security of critical electric infrastructure. During my research I came across a very interesting -- and I believe timely -- Congressional Research Service (CRS) Report entitled Vulnerability of Concentrated Critical Infrastructure: Background and Policy Options. The report was prepared by Paul W. Parfomak and updated on September 12, 2008.
(Hat tip to the Federation of American Scientists for posting this document in their publically available CRS library!)
I found this report to be an exceptional analysis of the vulnerabilities posed to the US with critical infrastructure concentrated in geographic areas. Such concentration increases the vulnerability to events like natural disasters, epidemics, certain kinds of terrorist attacks, etc.
The report defines "Geographic Concentration" of critical infrastructure as:
In addition to the sobering numbers above, if you look at the combined geographical area of New York City and Northern New Jersey the US port capacity is 12% and airport capacity is 8%.
(Hat tip to the Federation of American Scientists for posting this document in their publically available CRS library!)
I found this report to be an exceptional analysis of the vulnerabilities posed to the US with critical infrastructure concentrated in geographic areas. Such concentration increases the vulnerability to events like natural disasters, epidemics, certain kinds of terrorist attacks, etc.
The report defines "Geographic Concentration" of critical infrastructure as:
"...the physical location of critical assets in sufficient proximity to each other that they are vulnerable to disruption by the same, or successive, regional events."
To give the reader a sense of the degree of geographic concentration (in 2008) here is an interesting list:
- Energy (Refining) -- Approximately 43% of total US oil refining capacity is clustered along the Texas and Louisiana coasts
- Banking and Finance (Securities Market) -- Almost 39% of US securities and options are traded on the floors of the NY and American Stock Exchanges in lower Manhattan
- Chemicals (Chlorine) -- Over 38% of US chlorine production is located in coastal Louisiana
- Transportation (Rail) -- Over 37% of US freight railcars pass through Illinois, primarily around Chicago. Over 27% of freight railcars pass primarily through St. Louis
- Transportation (Marine Cargo) -- Over 33% of US waterborne container shipments pass through the ports of Long Beach and Los Angeles in Southern California (Note: a major tsunami in Southern California could close the Ports of Long Beach/Los Angeles for two months and cost $60B in economic losses)
- Defense Industrial Base (Shipyards) -- Over 31% of US naval shipbuilding and repair capacity is in and around Norfolk, Virginia
- Agriculture and Food (Livestock) -- Approximately 29% of US hog inventories are in Iowa; 15% in eastern North Carolina
- Public Health and Healthcare (Pharmaceuticals) -- Approximately 25% of US pharmaceuticals are manufactured in Puerto Rico/San Juan metro area
In addition to the sobering numbers above, if you look at the combined geographical area of New York City and Northern New Jersey the US port capacity is 12% and airport capacity is 8%.
MARKET INFLUENCES ON GEOGRAPHIC CONCENTRATION
To the casual observer, geographic concentration of US critical infrastructure is nothing new. For example, Chicago and Atlanta evolved from railroad hubs; Louisiana and the Coast of Texas are major players in oil and natural gas because that is where the natural resources are, etc. However, there are some added influences cited by the CRS report. They include:
- Resource Location
- Agglomeration Economies (i.e., spatial concentration itself creates favorable economic environment that supports further or continued concentration
- Scale Economies (e.g., refineries, ports, etc. are growing larger and larger due to the driver of "economy of scale")
- Community Preferences (this is more like the concentration of infrastructure in places where the local citizens are not opposed to such facilities)
- Capital Efficiency (critical infrastructure is located where capital can be efficiently deployed)
FEDERAL POLICIES AND INFRASTRUCTURE CONCENTRATION
Finally, for those who are planners or students of infrastructure planning and management here are some selected Federal policies to discourage geographic concentration:
- Prescriptive Siting (e.g., In the early 1940s, the US Government financed a major steel plant in Utah as a precaution against shortages in the Western US in case of a Pacific Coast invasion by the Japanese or closure of the Panama Canal)
- Economic Incentives
- Environmental Regulation (e.g., Coastal Zone Management Act, Clean Air Act, etc.)
- Economic Regulation
Finally the report highlights policy options to reduce infrastructure vulnerability that can include:
- Eliminating Policies Encouraging Concentration
- Encouraging Geographic Dispersion
- Ensuring Infrastructure Survivability
- Ensuring Infrastructure Recovery Capabilities
CONCLUSIONS
Overall this is an excellent and thought-provoking report on the strengths and vulnerabilities posed by the concentration of infrastructure in the US economy. This document is a useful discussion for students focused on urban planning, critical infrastructure planning and management, and those interested in reducing infrastructure vulnerabilities.
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