A wake-up call from Kilauea: dormancy isn't an option when it comes to volcanic risk
Red lava, blue flames, thick mists of toxic 'laze'… Dramatic images of the eruption from the Kilauea volcano in Hawaii have been shared across the globe since the latest bout of eruptive activity commenced on the 3rd of May. The eruption has been accompanied by a series of earthquakes, including a magnitude 6.9 earthquake on the 4th of May. Luckily, the affected area is relatively remote, lava flows are relatively slow, and most residents have been evacuated. As a result, there have not been any human fatalities caused by the current activity, preventing a larger human tragedy. Yet whilst so far the damages have been relatively confined, the eruption is an important reminder of volcanic risk. A risk that is tragically manifesting itself in Guatemala as I finish writing this.
Beyond lava flows: volcanic eruptions as a multi-hazard peril
Most of the damage resulting from the recent Kilauea eruptive activity has been linked to lava flows, but there are other hazards associated with volcanoes. A reminder of this came as recently as Sunday, when a magnitude 5.5 earthquake was detected and ash was shot up to 8,000 ft in the air. Whereas lava and pyroclastic flows tend to have a more local nature, ash falls can have more extensive impacts, including crop damage, aviation visibility problems, structural damage to buildings, and blockage of wastewater systems. Such ash falls are the focus of the probabilistic volcano model recently developed by Swiss Re.
Not only homes: damage to critical infrastructure and business interruption
Though much of the Kilauea media attention has focused on the dozens homes damaged by lava flows, critical infrastructure has also been affected by the volcanic activity. Lava has blocked roads, whilst earthquakes have cracked highways. The Kilauea eruption has also disrupted Hawaii's energy infrastructure. Lava flows have forced the shutdown of the Puna Geothermal Venture (PGV) plant, which supplies approximately 25% of Big Island's electric power. Wells were capped to reduce the risk of a potential blowout, and flammable pentane has been removed from the site. Ormat, which owns a 63.25% interest in PGV, has indicated that it expects to submit a business interruption insurance claim. This is not the first time that geothermal plants have been affected by a volcanic eruption; in 1977, magma erupted through a geothermal borehole located on the flank of Krafla Caldera (Iceland), and in 2010 the eruption of the Pascaya volcano resulted in a temporary shutdown of the Amatitlan power plant in Guatemala. Perhaps this isn't surprising given the spatial association between active volcanoes and geothermal development.
Kilauea not alone: hundreds of active volcanoes
Kilauea is not the only volcano that has experienced activity over the past few weeks. Last month, reports of eruptive activity at Mount Merapi (Indonesia) triggered evacuations. There have also been reports from the Global Volcanism Program of explosions from Sabancaya (Peru), ash plumes from both Langila (Papua New Guinea) and Turrialba (Costa Rica), and a lahar from Fuego (Guatemala). Indeed, there are approximately 1500 volcanoes with Holocene activity. Swiss Re's probabilistic volcano model, the first of its kind in the insurance industry, assesses the risks of 508 of these active volcanoes. Model output indicates the potential for substantial losses, particularly where volcanoes and cities are located in close proximity. Although the population density in the area affected by Kilauea's current eruption is relatively low, imagine the potential losses from a major volcanic eruption in San José, Costa Rica's capital. The estimated return period of a loss exceeding 0.5% of country GDP caused by volcanic ash fall is approximately 100 years for this city, which is surrounded by five volcanoes (including the aforementioned Turrialba volcano).
Swiss Re innovations helping to close the protection gap
With the exception of Iceland (where volcanic eruption insurance is compulsory), there is a large protection gap against volcanic hazards in most countries with cities exposed to volcanic risk. Swiss Re's probabilistic volcano model is enabling the (re)insurance industry to quantify volcanic risk, a crucial step to improving insurability. Swiss Re has also been developing innovative volcanic risk insurance products, such as a trigger-based business interruption insurance product for Japan.
Kilauea's recent eruptive activity presents a reminder about the ever-present volcanic risk, and the need for innovation to help improve global resilience to volcanic hazards.
Category: Climate/natural disasters
Location: Hawaii, USA