RMS - Risk Management Solutions Inc.
05/02/2024 | News release | Distributed by Public on 05/02/2024 05:00
Understanding the Multi-Faceted Impact of Texas ...
Understanding the Multi-Faceted Impact of Texas Wildfires and the Role of Moody's RMS Superior Catastrophe Wildfire Models
Firas SalehMay 02, 2024
As we pass the end of April, already in 2024 we have seen a record-breaking U.S. wildfire; the Smokehouse Creek fire that started on February 26 near the town of Stinnett, some 45 miles northeast of Amarillo in the northeastern Texas panhandle.
In response to the Smokehouse Creek fire, Texas Governor Greg Abbott issued a disaster declaration for sixty counties across the state.
By March 16, the fire had burned nearly 1.1 million acres of land, breaking a previous record in 2006 to make this wildfire the largest in Texas history, and the largest in the U.S. in 2024. So far this year, as of April 30, the Texas A&M service reported a total of 1.25 million acres burned, from 175 fires.
In the town of Stinnett, Hutchinson County (pop: ~1,600) two people were killed in the late February Smokehouse Creek fire with many structures destroyed. The town of Fritch (pop. ~2,100) also saw many structures destroyed and a firefighter killed in another wildfire, the Windy Deuce fire.
Spreading east, the Smokehouse Creek fires swept through cattle ranches with one rancher based near Skellystown, some ten miles from Stinnett, stating that around a quarter, some 200 cattle had been killed, and Texas Agriculture Commissioner Sid Miller reported an estimate of the cattle deaths would have been in the thousands.
Overall, reports state that 500-plus structures had been destroyed in the Smokehouse Creek and Windy Deuce Fires, and Governor Greg Abbott confirmed to reporters how shocked he was as a result of the destruction compared to the aftermath of other natural disasters.
"When you look at the damages that have occurred here, it's just gone, completely gone, nothing left but ashes on the ground, so those who are affected by this have gone through utter devastation. They are going through challenges that others cannot comprehend."
Utility company Xcel Energy has acknowledged involvement in the Smokehouse Creek and the Windy Deuce fires, with reports of a splintered utility pole, and confirmed by the Texas A&M service.
Texas Wildfire History
The previous record Texas wildfire was set in early March 2006; drought conditions early in 2006 had already caused smaller wildfires, leading to the East Amarillo Complex Fire burning a total of 907,000 acres.
Similar to the Smokehouse Creek fire, the East Amarillo Complex fire impacted the Texas Panhandle, across Hutchinson County and the South Plains. The fires killed 13, with numerous structures destroyed.
The Big Country Fire in 1998, again in early March, burned 366,000 acres, but this time it was more in the heart of Texas, in Callahan County some 100 miles west of Fort Worth.
For Texas overall, 2011 ranked as the worst year, with more than 40,000 fires reported and nearly 4 million acres burned. In September and October 2011, the Bastrop County Complex fire burned some 34,000 acres and produced a conflagration that engulfed parts to the east of the city of Bastrop (pop. ~9,700) some 30 miles southeast of Austin.
The fires destroyed 1,696 structures, two people were killed by the fires, causing an estimated US$350 million in insured property damage, a record-breaking fire for the state in terms of costs and structures destroyed.
These wildfires, resulting from critical fire weather conditions, driven by a combination of high temperatures, dry conditions, strong winds, and sufficient fuels can cause extensive damage within a short period, with the potential to move at 1-3 miles per hour and burn as fast as 900-1,500 acres per hour.
The destruction of grazing lands, loss of livestock, and damage to farming infrastructure pose significant challenges to the agricultural sector, and beyond agriculture, local communities also grapple with the aftermath of wildfires, with towns like Fritch and Stinnett in the Texas Panhandle facing severe damage, displacement of residents, and a crisis of temporary housing and support services.
Figure 1: Largest Texas wildfires on record in order of acres burned. Source: Texas A&M Forest ServiceAs the figure shows, Texas has had many devastating wildfires, but smaller in comparison compared to the West Coast/Rocky Mountains. Between 2018 and 2022, California was averaging 1.8 million acres burned per year. In 2023, fires in Texas burned roughly 205,000 acres.
These recent wildfires in Texas have been exceptional, have left a broad impact on the state, and also present significant environmental consequences.
Wildfires can lead to the loss of wildlife habitats, soil erosion, and increased air pollution due to the release of smoke and particulates. The impact on local ecosystems can be long-lasting, affecting biodiversity and potentially altering landscapes.
For the U.S. and Canada, the increase in wildfire occurrences and area burned in recent years, even away from the more typical West Coast region, continues to highlight vulnerabilities of current systems and the need for more robust risk management strategies.
Advancing Wildfire Management with Moody's RMS Superior Catastrophe Models
The Texas wildfires have underscored the pressing need for robust risk management strategies across critical sectors, including insurance, utility companies, and community-level mitigation efforts.
These events highlight the urgency of adopting comprehensive risk management approaches, leveraging superior wildfire modeling, such as Moody's RMS U.S. Wildfire HD Models, and innovating within the insurance industry to address the escalating challenges posed by wildfires, particularly as communities continue to grow into the wildland-urban interface (WUI).
With a significant portion of wildfires igniting in proximity to communities - 84 percent within two miles of a community, as reported by the Texas A&M Service from 2017 to 2022 - the expansion into the WUI has increased the vulnerability of these areas to wildfires.
This reality, compounded by the exacerbating effects of climate change on the frequency and intensity of such events, necessitates a multifaceted approach to ensure both the resilience of the insurance sector and the financial security of the communities it serves.
The enhanced modeling capabilities offered by the Moody's RMS U.S. Wildfire Model are crucial for refining risk assessments, fine-tuning premium calculations, and informing the creation of innovative insurance products.
Among these innovations, parametric insurance policies stand out for their ability to provide payouts based on specific triggers related to wildfire occurrences, such as intensity or geographic impact.
Our forthcoming Moody's RMS U.S. Wildfire HD Model version 2.0 builds on the superior modeling of fire, smoke, ember, and urban conflagration modeling to offer more features to assess sensitivities to wildfire management and risk mitigation. The model is also expanding coverage to include Hawaii.
Utility companies, too, can greatly benefit from the integration of our new U.S. Wildfire models into their risk management frameworks with specific attribution of events to utility failure to inform the most robust risk management strategies.
Our models afford utility companies a clearer understanding of how wildfires might affect their infrastructure and operations, guiding them in pinpointing critical areas that require fortification.
The insights garnered from our new models can direct utility companies to enhance the resilience of essential infrastructure, including power lines and transmission towers, against the ravages of wildfires.
In conclusion, Moody's RMS offers the most rigorous modeling of wildfire risk that leads to innovative insurance solutions and strategic mitigation efforts spearheaded by insurers and utility companies and plays a pivotal role in fortifying communities against the increasing threat of wildfires.
Firas Saleh
Director of Product Management, Moody's RMSDr. Firas Saleh joined Moody's RMS as Director of Model Product Management in 2020. He oversees the Moody's RMS U.S. Inland Flood HD Model and works closely with clients and across Moody's RMS functional teams on defining and executing the vision, strategy, and roadmap for Moody's RMS flood products.
Firas holds a Ph.D. in Geosciences and Natural Resources from the University of Pierre et Marie Curie - Paris VI (Sorbonne Universités), France. He has a strong professional track record in the U.S. Federal Government, industry, and academia.
During his academic tenure at different institutes around the world, including the Paris School of Mines (Mines Paris-Tech), New Jersey Institute of Technology, and Stevens Institute of Technology, his research was focused on implementing quantitative forward-looking analytics to assess climate and weather-related physical risk and impacts on critical infrastructure resilience.
At Stevens, he was part of the team that pioneered and productized the coastal-inland operational flood forecast systems for Port Authority of NY-NJ critical facilities (JFK, LaGuardia, Newark, and Teterboro Airports) and NJ Transit. He has co-authored more than 30 publications in peer-reviewed articles, conference proceedings, and book chapters.
He also served as a Senior Commercial Specialist at the U.S. Embassy in Baghdad and Amman, the U.S. Commercial Service, and the U.S. Department of State. He is the recipient of the U.S. Department of Commerce Gold Medal Award for his distinguished federal service in fostering collaboration between government and Industry in relation to water and construction. The Gold Medal is the highest honorary award granted by the U.S. Secretary of Commerce.