A RISK ANALYSIS ON THE CONTINUITY OF THE PETROLEUM SUPPLY CHAIN USING GIS AND SYSTEMS SIMULATION Open Access
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One of the lessons learned from Hurricanes Katrina and Rita is that natural disasters have the potential to cause disruptions in the U.S. energy infrastructure. This is especially true for the petroleum industry, which has a significant portion of its physical infrastructure in and around the southeastern coast and the Gulf of Mexico, which are areas primarily vulnerable to hurricanes. As energy is one of the main driving forces of economic activity, those disruptions may have macro-economic effects. Furthermore, due to the tightly coupled interdependencies of globalizing economies and the international nature of the petroleum supply chain, consequences of major incidents can have adverse economic impacts in geographies far away from the United States.Understanding, quantifying, and dealing with this risk necessitate the amalgamation of knowledge and techniques from several disciplines and research domains. Some of those domains are critical infrastructure analysis, risk analysis, systems simulation, geographic information systems, and petroleum supply chain management.The objective of this study is to develop a framework to explore and quantify risk of disruptions in the U.S. petroleum supply chain caused by hurricanes. The analysis is based on numerical and empirical data collected during Hurricanes Katrina and Rita. A semi-continuous supply chain simulation model of the petroleum supply chain is designed and implemented. Failure and recovery of critical petroleum supply chain components is modeled with input distributions dictated by real data. A Geographic Information System (GIS) is employed for better management of spatial data, face-validation of supply chain elements, estimation of distances between modeled infrastructures, and improved overall visualization of the system. The Monte Carlo simulation at its steady state is run with the inclusion of the failure/recovery models. Output statistics representing key system performance measures and status of infrastructure components are collected for three scenarios. Scenario outputs are compared and interpreted for their overall significance. This research contributes to the body of knowledge in risk modeling of the petroleum supply chain during disasters. It demonstrates the amalgamation of multiple methodologies from different streams of research, and thus makes a direct contribution to the domain of interdisciplinary applied science. It makes a first attempt to quantify the uncertainty associated with the possibility of petroleum product shortages during and after hurricanes. The research establishes a descriptive framework that fosters a more factual discussion of inherent petroleum supply chain risks. By defining standardized performance metrics and relying on an extensible and flexible simulation model it ensures an objective comparison of multiple disaster scenarios. The findings of this research support the idea that strong hurricanes in the Gulf of Mexico carry the potential of causing interruptions in the petroleum supply chain. As the comparison of the impacts of Hurricanes Katrina and Rita reveals, keeping refining capacity operational appears to be a key success factor in preventing gasoline shortages. While the Gulf of Mexico region is most susceptible to petroleum shortages and outages in the aftermath of hurricanes, despite smaller, the risk of gasoline shortages also exists for the East Coast due to interdependencies. In the simulation model, gasoline shortages were observed in the Gulf of Mexico and for shorter timeframes in the East Coast. In the absence of external supplies, recovery of East Coast gasoline supply depends on recovery of the Gulf of Mexico.