Integrated Approach to Model Liquid Fuels Supply Chain Interactions Due to Disasters and Accidents

Abstract

Abstract Objectives/Scope Historically, facility outages, cyber-attacks, natural disasters, supply interruptions and other disruptions have caused significant impacts to the flow of crude oil and petroleum products. The impacts on assets, primary and secondary markets, and economic indices need to be quantified to address the effects of disruptions efficiently and effectively. Methods, Procedures, Process This paper details the design process that was used to develop an analytical tool to predict the impacts from disruptions, determine the cascading impacts on downstream markets and dependent assets and provide estimates for recovery potential. The entire petroleum supply chain, upstream, midstream, and downstream facilities, were included in the development of the modeling capability. To best capture the supply chain network and geographic dependencies, the area of interest was divided into finite regional markets based on supply and demand market dynamics and connectivity. Extensive review was conducted of historical disruptions to understand the impacts on infrastructure and the petroleum supply chain network interdependencies to support a holistic approach to disruption simulation. Algorithms were developed to determine the probability and severity of damage of disruptions at varying intensities. The modeling capability was designed to utilize a comprehensive up-to-date database and geospatial system. The database was designed considering public, private and proprietary data, the frequency of updates, validity of source, and value added. Results, Observations, Conclusions The petroleum disruption analytical modeling tool that was developed assesses disruptions to the supply chain network and predicts the duration and severity of impacts on facilities and the cascading effect on primary and secondary markets. The tool provides disruption results in tabular, graphical, and geospatial forms for individual assets, regions, and the nation as a whole. For the United States, the tool models 26 geographical regions delineated by refining sectors, mainly along the coastlines, and dependent demand markets. The crude oil and petroleum product supply and demand is balanced for each region using local supply, net imports, interregional connectivity, and the multi-modal transportation network. This paper demonstrates how the analysis tool provides business intelligence insights for the days of stocks available throughout the disruption duration and the total loss in products to the markets. An economic submodule was integrated with the tool that determines the impacts on the crude oil and gasoline price and the resulting impact on Gross Domestic Product (GDP). The model was benchmarked during Hurricane Laura 2020 and the predicted reduction in refining production was 85% of realized losses. Novel/Additive Information The innovative analytical tool simulates disruptions and provides predicted forecast of facility, market, and economic impacts for an extended period of time after the event occurs supporting response, recovery, and planning efforts. The model can be assimilated for any geographical or geopolitical region with consideration given to region specific disruptions. This paper provides case studies exemplifying use cases and model simulated results for petroleum supply disruptions.