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Value at Induced Risk: Injection‐Induced Seismic Risk From Low‐Probability, High‐Impact Events
Author(s) -
Langenbruch Cornelius,
Ellsworth William L.,
Woo JeongUng,
Wald David J.
Publication year - 2020
Publication title -
geophysical research letters
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.007
H-Index - 273
eISSN - 1944-8007
pISSN - 0094-8276
DOI - 10.1029/2019gl085878
Subject(s) - seismic risk , risk management , value (mathematics) , geothermal gradient , seismology , risk analysis (engineering) , environmental science , geology , actuarial science , business , statistics , geophysics , mathematics , finance
The increasing number of damaging earthquakes, induced by underground injection of fluids, demonstrates the need of a structured methodology for critical thinking about and clear communication of induced seismic risk. Using the Pohang, South Korea, geothermal project and the damaging (US$75M) local magnitude M L 5.35 induced earthquake in 2017, we present a straightforward methodology that summarizes induced seismic risk in a single time‐dependent number, the Value at Induced Risk (VaIR). VaIR quantifies the amount of economic losses that will not be exceeded at a given confidence level. Our method reveals that the Pohang project was exposed to a 2% chance of causing economic losses of US$140M or more (1% of US$3.2B or more). The high risk could have been identified during the sequence of reservoir stimulation, lasting almost 2 years. VaIR opens new ways to assess and communicate risk to all stakeholders for informed risk management decision making.