By F. Michael Maloof
WASHINGTON – Just what would be the economic cost to the U.S. in the event of a deliberate electromagnetic pulse attack, an attack that could result from a nuclear explosion from a device launched off-shore with virtually no warning?
Try up to $3 trillion, nearly equivalent to the federal government's entire 2013 budget, and that's just for an attack that would impact the eastern seaboard.
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The Sage Policy Group of Baltimore and Instant Access Networks examined what it would cost should there be a high-altitude EMP attack.
The study was meant to give a conservative determination of the economic impact from the effects of an electromagnetic attack on the Washington, D.C., region, stretching from Baltimore, Md., to Richmond, Va.
The effort was to "put a financial face to the problem and suggest quick steps that can be taken to mitigate" the economic impact of an EMP attack, according to the study.
The study looked at the economic effects of such an attack from a nuclear device detonated between 30 and 80 miles above the ground, affecting an area at least 500 miles in radius.
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"A larger nuclear device detonated at 300-400 miles above ground would impact the entire continent and may also produce a substantial slower pulse (known as E3) that can cause additional damage," the study said. "In these instances of high-altitude EMP, no one would feel the heat or blast but merely experience the effects of the disruption or damage to the electronic and power infrastructure."
An electromagnetic pulse is a high-intensity burst of electromagnetic energy caused by the rapid acceleration of charged particles.
These particles can be so powerful and supercharged that they can knock out or completely fry any unprotected electronics or electrical systems, depending on intensity.
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Electromagnetic energy comes in many forms, including gamma rays, X-rays, microwaves, radio waves and infrared radiation, among others.
The Sage study estimated that the effects of a detonation over the area at the stated altitude would extend out hundreds of miles beyond the region that was considered in the study, "significantly complicating the recovery process and the restoration of economic activity while producing economic consequences roughly 10 times greater than those impacting" only the Washington region.
The report presented a range of low, medium and high impact scenarios and the resulting estimates of the economic damage. The methodology took into account assumptions on the disruption and damage to regional electrical power systems, communications, system control and data acquisition, or SCADA, devices and other critical infrastructure from the EMP attack.
Destroying and damaging these infrastructures also would have an impact on larger power systems that similarly would be disrupted or damaged, causing management and safety measures to be defeated.
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"This can result in larger system failures and damage," the study said.
The study also looked at the time that would be required to repair the damage and fully restore economic activity.
"Because the economy is so interconnected and so dependent on electricity to power that interconnectedness, very little of the electrical, communications or electronic infrastructure would escape unaffected," the report said.
However, only equipment that is shielded from both radiated and conducted pulses that meet military specifications such as the series 188-125 could be counted upon to survive without disruption or damage, it said.
"Civilian critical infrastructure is largely unprotected at this time," the study said.
Under this high, or worst-case scenario, the study said that the damage from an EMP attack would be widespread and the duration of disrepair would last for years. It went on to say that the quantity of equipment needed to replace that which was destroyed and damaged would quickly exhaust readily available supplies and could exceed existing manufacturing capacity.
With that, the available skilled labor to replace and restore key infrastructure probably wouldn't exist for some time. And the time to undertake the replacement and repair would occur slowly and only gather speed as the basic infrastructure gradually was brought back on line.
In taking a conservative approach in the study, it meant that the damage could be considerably worse than what the study revealed.
"More extensive damage is also likely to be associated with high-altitude EMP that would affect areas much larger than the Baltimore-Washington-Richmond region, further complicating recovery efforts," the report said.
The study pointed out that the Washington to Richmond regional economy is "large and complex. It constitutes approximately 4 percent of the nation's output and is characterized by a substantial presence of information technology/security, biotechnology/medical research, finance and insurance, government/government contracting, health care and professional/business services."
In reviewing the prominent sectors in this regional economy, the report said it also demonstrates the region's vulnerability to economic damage from an EMP.
"While electricity, communications and electronics are vital to every aspect of the American economy, it is particularly easy to see the effects of disruptions to this infrastructure on government, professional and technical services and real estate," the report said.
"These sectors are highly reliant on computers and telecommunications on a continual basis," it said. "Alternatively, relatively little economic activity may be available after an EMP.
"Aside from a few subsistence farmers, some fishing and hunting activities, the economic impacts of disruption to the electrical power system and the electrical and electronic infrastructure could be pervasive and potentially profound," the report added.
"The three-city metro area between Richmond, Va., Washington, D.C., and Baltimore, Md., could save $25 billion to $125 billion in losses if they were to take steps to protect their most critical communications and power infrastructure. The East Coast as a whole would save 10 times as much," Charles L. Manto, CEO of Instant Access Networks said.
In not undertaking preventative measures, however, the study said that the impact to financial output over a 33-month period ranged from $34 billion in the low case to $771 billion on the high case, although a more conservative range would be between $100 billion and $300 billion, Manto said.
"Extrapolating to the East Coast area as a whole," Manto said, "would mean a 10 times larger loss of $1 trillion to $3 trillion."
The study pointed out that when Hurricane Katrina struck, the population in the affected area and much of the economic activity was dispersed to other regions of the country.
"(A) high-altitude EMP at a 30-80 mile altitude would result in a regional impact, but one around 300 miles above ground would impact the entire continental U.S. and most of the industrial sections of Canada and Mexico.
"In the event of a continental-wide EMP, escaping the economic damage of the Baltimore-Washington-Richmond region by moving to Philadelphia, Atlanta or Chicago simply may not be possible," the study said. "In that event, there could be an entire collapse of the economy as we know it for a period of years."
In projecting the economic recovery necessary on a nationwide basis, the study made the following ominous observation:
"There are likely to be many constraints on the ability of the region's economy to restore itself. For example, between 1,100 and 1,200 medium to large power transformers are sold in the United States each year. The largest transformers in the region take one to two years to build and additional time for deployment. The best financed utilities strive to keep as many as 10 percent of their transformers in stock since their schedules assume as long as five years to put one into use. If an EMP resulted in an instantaneous demand for 10-70 percent of replaced medium to large power transformers, it would require using all of the spares (assuming the spares were not damaged) at a minimum and 600 percent more in the worst case. It is unclear how quickly replacement transformers could be delivered to the region. Once what little stock available is used, customers would have to wait in line for their turn to receive their orders. Additional build-out of factory facilities would likely need to be made to fulfill large back logs of orders. At that point, we would hope that in the scenario presenting the least damage, there would not be a second EMP hit six months later when no spares are left.
"Skilled labor would also be an essential part of a restoration effort. The mobilization of utility workers in response to natural disasters is a familiar story. An EMP, however, would likely require similar mobilizations of skilled personnel to restore the electrical and electronic infrastructure. It is unclear whether the industries and businesses required for infrastructure restoration have the organizational experience or capacity to quickly mobilize in response to an EMP disaster or to sustain the effort needed for recovery.
"The financial investment necessary to restore economic capacity on a regional basis is substantial. Presumably the insurance industry would be a critical player in amassing the capital necessary for this investment. The experience of Hurricane Katrina, however, suggests that the insurance industry may at times be a barrier to recovery. Were an EMP considered an act of war, insurance claims might be legitimately rejected. For a variety of reasons, the lack of capital could substantially delay the restoration of economic capacity and increase the economic costs associated with an EMP."
The Sage study, however, offered some glimmer of hope in the face of the consequences of a catastrophic event. It said that if a community can protect the vital 10 percent of its critical infrastructure such as energy and communication, it will stand to gain more than a 10 percent reduction of loss.
"Because partial shielding will reduce damage to critical infrastructure, it will tend to reduce the time required to recover full economic vitality, though initial recovery would be significantly enhanced or ensured," the study said.
So if the Baltimore/Annapolis area had protected roughly 10 percent of its strategic infrastructure, such as power through the use of EMP-protected micro-grids and related systems and emergency communications through the use of shielded systems and related SCADA devices, the study said it could ensure its water supply, the functioning of its emergency communication centers and hospitals.
SCADAs referred to in the report stands for Supervisory Control and Data Acquisition Systems, commonly referred to as automated control systems.
"If those essential services were not available and local government had no situational awareness or ability to respond to fires and other emergencies, then the situation would get worse instead of better and far less immediate help could be brought to bear," the study said.
The report warned, however, that the number of major factors influencing total recovery time "will be substantial."
The report pointed out that if a large number of electric transformers and much of the telecommunications system are damaged, "maintaining situational awareness" may help facilitate the initial deployment of available transformers to the most strategic locations.
"However, the backlog back at the factory producing transformers might not be meaningfully improved if that backlog takes years to fulfill," the report said. "Additional factory capacity would similarly take time to become available. Accordingly, the estimated long-term recovery time is left largely unchanged."
All of which is to say that in recovery times if only some of the strategic equipment, particularly transformers, is shielded, the high-impact case suggests it could take almost three years to recover. Partially shielded telecommunications could similarly take more than two years to be fully functioning again.
In making its assessment that a high impact EMP event – whether natural or man-made – just to the Washington regional area could be some $771 billion and take up to almost three years to recover, the study said that amount would not include the replacement cost of damaged infrastructure and equipment or secondary effects due to the loss of infrastructure.
In that case, the amount for recovery over at least a three-year period could exceed $1 trillion.
"Policymakers could proactively limit damage and expedite recovery times through shielding activities that protect key communications and energy-related infrastructures, water supply, and key emergency response functions," the study concluded.