The consequences from climate change can greatly affect oil rigs and the offshore industry in general. Namely, increased wind speeds are able to put dozens of floating oil rigs in danger. What is more, a potential disruption in the operation of a rig can cost companies millions.
As Bloomberg reports, citing Mike Eilts, senior vice president for weather at DTN, increasing wind speeds can put oil rigs at risk. These rigs can withstand winds of up 80 miles per hour if they manage to turn to face the tempest. However, if the wind hits them from the side, then their pipes can be damaged with only a 35-mile per hour wind.
This is important as only a week of delay, could affect major shippers and cost companies as much as $7.5 million.
For this reason, companies that monitor weather have established a competitive new industry in the last five years. Their client lists include insurers, banks and commodity traders, engineers and architects, shippers, retailers and the travel industry.
What is more, meteorologists have now become a kind of high priests for finance, addressing uncertainty and advancing risk-related profits.
In addition, in order to be better prepared for difficult situations, Mary Glackin, vice president for weather business solutions and head of public-Private Partnerships at International Business Machines Corp., notes that companies should not depend on past experiences to predict when and where extreme weather will take place. She explained that the best practice would be to use algorithms and supercomputers to get a most-likely scenario, and a number two as well.
Now, IBM cooperates with cities and big utilities to assist them use resources before a big weather event occurs. Specifically it helps utilities determine when and where they should shut off power lines, or when cities or utilities must send out an early call for more workers to repair the power lines and help in the cleanup.