Space Weather Blackout Could Cost U.S. $40 Billion Per Day

Artist illustration of events on the sun changing the conditions in Near-Earth space. A new study finds daily U.S. economic cost from solar storm-induced electricity blackouts could be in the tens of billions of dollars. (Credit: NASA)
Artist illustration of events on the sun changing the conditions in Near-Earth space. A new study finds daily U.S. economic cost from solar storm-induced electricity blackouts could be in the tens of billions of dollars. (Credit: NASA)

WASHINGTON, DC (AGU PR) — The daily U.S. economic cost from solar storm-induced electricity blackouts could be in the tens of billions of dollars, with more than half the loss from indirect costs outside the blackout zone, according to a new study.

Previous studies have focused on direct economic costs within the blackout zone, failing to take into account indirect domestic and international supply chain loss from extreme space weather.

“On average the direct economic cost incurred from disruption to electricity represents only 49 percent of the total potential macroeconomic cost,” says the paper published in Space Weather, a journal of the American Geophysical Union. The paper was co-authored by researchers from the Cambridge Centre for Risk Studies at University of Cambridge Judge Business School; British Antarctic Survey; British Geological Survey and University of Cape Town.

Under the study’s most extreme blackout scenario, affecting 66 percent of the U.S. population, the daily domestic economic loss could total $41.5 billion plus an additional $7 billion loss through the international supply chain.

Electrical engineering experts are divided on the possible severity of blackouts caused by “Coronal Mass Ejections,” or magnetic solar fields ejected during solar flares and other eruptions. Some believe that outages would last only hours or a few days because electrical collapse of the transmission system would protect electricity generating facilities, while others fear blackouts could last weeks or months because those transmission networks could in fact be knocked out and need replacement.

Extreme space weather events occur often, but only sometimes affecting Earth. The best-known geomagnetic storm affected Quebec in 1989, sparking the electrical collapse of the Hydro-Quebec power grid and causing a widespread blackout for about nine hours.

There was a very severe solar storm in 1859 known as the “Carrington event” (after the name of a British astronomer). A widely cited 2012 paper by Pete Riley of Predictive Sciences Inc. said that the probability of another Carrington event occurring within the next decade is around 12 percent; a 2013 report by insurer Lloyd’s, produced in collaboration with Atmospheric and Environmental Research, said that while the probability of an extreme solar storm is “relatively low at any given time, it is almost inevitable that one will occur eventually.”

This figure shows the blackout zone, daily customer disruptions and daily lost GDP according to different scenarios. The S1 scenario occurs at 55±2.75 degrees geomagnetic latitude affected 8 percent of the US population and caused a direct economic loss to the US economy of $3.2 billion per day (8 percent of daily US GDP). In the S2 scenario (50±2.75 degrees geomagnetic latitude) a considerable proportion of industrial production was affected, along with 44 percent of the population. The S3 scenario (45±2.75 degrees geomagnetic latitude) affected 23 percent of the US population leading to an economic loss of $16.5 billion per day (41 percent of daily US GDP). In the much larger S4 scenario (50±7.75 degrees geomagnetic latitude), 66 percent of the population were affected. This leads to an estimated potential economic loss of $41.5 billion per day to the US economy (100 percent of daily US GDP), combined with a daily loss to the global economy of $7 billion. (Credit: American Geophysical Union)
This figure shows the blackout zone, daily customer disruptions and daily lost GDP according to different scenarios. The S1 scenario occurs at 55±2.75 degrees geomagnetic latitude affected 8 percent of the US population and caused a direct economic loss to the US economy of $3.2 billion per day (8 percent of daily US GDP). In the S2 scenario (50±2.75 degrees geomagnetic latitude) a considerable proportion of industrial production was affected, along with 44 percent of the population. The S3 scenario (45±2.75 degrees geomagnetic latitude) affected 23 percent of the US population leading to an economic loss of $16.5 billion per day (41 percent of daily US GDP). In the much larger S4 scenario (50±7.75 degrees geomagnetic latitude), 66 percent of the population were affected. This leads to an estimated potential economic loss of $41.5 billion per day to the US economy (100 percent of daily US GDP), combined with a daily loss to the global economy of $7 billion. (Credit: American Geophysical Union)

“We felt it was important to look at how extreme space weather may affect domestic U.S. production in various economic sectors, including manufacturing, government and finance, as well as the potential economic loss in other nations owing to supply chain linkages,” says study co-author Edward Oughton of the Cambridge Centre for Risk Studies at Cambridge Judge Business School. “It was surprising that there had been a lack of transparent research into these direct and indirect costs, given the uncertainty surrounding the vulnerability of electrical infrastructure to solar incidents.”

The study’s scope was guided by a July 2015 conference held at Cambridge Judge.

The study looks at three geographical scenarios for blackouts caused by extreme space weather, depending on the latitudes affected by different types of incidents.

If only extreme northern states are affected, with 8 percent of the U.S. population, the economic loss per day could reach $6.2 billion supplemented by an international supply chain loss of $0.8 billion. A scenario affecting 23 percent of the population could have a daily cost of $16.5 billion plus $2.2 billion internationally, while a scenario affecting 44 percent of the population could have a daily cost of $37.7 billion in the US plus $4.8 billion globally. (The study is calculated using 2011 U.S. dollars.)

Manufacturing is the U.S. economic sector most affected by those solar-induced blackouts, followed by government, finance and insurance, and property. Outside of the U.S., China would be most affected by the indirect cost of such U.S. blackouts, followed by Canada and Mexico – as “these countries provide a greater proportion of raw materials, and intermediate goods and services, used in production by U.S. firms.”

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  • MzUnGu

    Y2K Ver. 2.0?

    Worst thing that happens, people get an extra weekend out of the whole thing. I am for it. 😀

  • OldCodger

    If a Carrington event hits in winter and the worst case scenario for the collapse of the transmission network occurs then the death toll would be quite high.

  • JamesG

    Yeah. But that doesn’t “sell” research grants and consultancy contracts…

  • Ask the people of Quebec how that all worked out for them.

    Then extrapolate that to the entire US or worldwide.

  • Kapitalist

    Newt Gingrich on Fox News calls the decision of the Energy Commission made today, to protect against Solar flares is “very very dangerous” and he recommends Trump to cancel it with an executive order already on inauguration day.

    Why does he feel that way, and so strongly about it? Gingrich is one of very few politicians who are interested in space. He suggested a permanent Lunar base when he ran for president 4 years ago and he has advocated space Solar power too.

    I suppose a protection system against Solar induced power outages would consist of an early warning system (systematic Solar observations and maybe a probe in SEL1), and a way to quickly physically disconnect hard-to-replace transformers et cetera from the grid where power peaks could be induced in very long cables. Sounds like pretty modest investments. What am I missing here?

    3:10 into this clip:
    http://video.foxnews.com/v/5288828804001/?#sp=show-clips

  • JamesG

    He pretty much stated it in the piece, a huge regulatory burden that doesn’t address the more probable threat, an intentional EMP attack.

  • Kapitalist

    But it is not a huge burden. And there no contradiction between a Solar defense and an EMP defense. And politically it is madness. As if Trump hasn’t got anything on his agenda so that something has to be made up for him. I’m glad Newt didn’t get any cabinet position, and I think Trump never even considered it. Newt is weird.

    Newt actually has a PhD in European history, but he said early in the same short interview that the US is the only country that has had only peaceful (democratic) transitions of power since 1772. Forgetting about the UK!

  • JamesG

    There is a difference in the level of hardening and in what you have to protect. What will protect power grids and telecom lines in a solar storm won’t do any good during an EMP because an EMP will damage/destroy the electronics between the wires too. So the power companies would have to spend millions individually and billions altogether to change out equipment that might prevent grids from going down, but definitely won’t for an intentional attack. Plus, the default Republican response to regulation of any kind is usually negative (unless they write it).

    Did not watch the rest of the bit, perhaps he misspoke?

  • Kapitalist

    Exactly my point! Solar and EMP protections are two very different projects. He’s supposed to be a space advocate, but he makes up a false contradiction between protection against “space weather” and protection against EMP war.

    If anything, he should emphasize the importance of the Sun, for this and for the climate with the hypothesis that lower Solar activity means less protection against cosmic rays which cause cloud formation that cools the planet way more than any CO2 emissions. And the Sun is going blank from spots right now. Could cause another little ice age for the rest of the century.

    It is like he’s simply saying what he happens to think of, very unusual for a politician. No wonder he became speaker of the House, he likes to talk 🙂

  • JamesG

    If a Carrington Event occurs at any time we are done. Our “Just In Time”, razor-thin , “efficient” economy that is balanced (and as fragile) as a Christmas tree, dependent upon electronics and electrical power will fall apart and the cities will be unihabitable within a day. You really can’t put a price tag on total social collapse.

    But, that is not likely to occur before something else (us) bad happens first.