Meyer’s piece is a little wonky but basically what I think he’s saying is that the cost-benefit analysis approach to projects like, say, repairing a coal ash retention pond is flawed, because it fails to take into consideration all of the possible costs and outcomes, as so many of them are unknowable to begin with. Instead, they just look at the likely costs and outcomes. And in today’s world of advanced technology, likely is not sufficient. Accidents--devastating ones--are the new “normal.” They are not exceptional events.
In other words: shit happens.
I sorta touched on this here, when I mentioned TVA going the low-budget spit-and-a-prayer route to fix the leaky Kingston ash pond, instead of opting for the $25 million “global fix.” As a result of this judgment error, they are at least $100 million in the hole, people have lost their homes, the environment is destroyed, etc, etc.
Meyer writes of TVA’s decision:
So, that tells us the TVA figured the probability of a spill multiplied by the likely cost to clean up was less than $25 million in current dollars in 2003.
They were badly wrong. Why?
The expected value calculation appears to have assigned a zero probability to a spill as massive as the one that occurred. That's as if you carried an umbrella in the rain even though you might melt if you got wet, and assigned a zero probability to the possibility of high winds or hail. That's not rational.
Assigning that zero likelihood also meant that there was no serious effort to calculate the cost of such a massive failure.
With all due respect to Peter Meyer, I think he is being awfully charitable here. I find it difficult to believe that engineers never considered the possibility that the Kingston dam would completely fail, especially after it was already leaking. I also find it hard to believe that someone, somewhere, never put pencil to paper and figured out what cost that kind of devastation would rack up.
I think something else was happening. I think a bunch of bureaucrats--probably in Knoxville HQ or Chattanooga, and probably a few folks in Washington D.C., too--thought it would be better to keep their fingers crossed and whisper the magic incantation they hoped would keep chaos at bay. They knew better, alright. They just hoped they wouldn’t be left in the hot seat when the shit hit the fan.
Isn’t that the way it’s been across virtually every sector of American life for the past ten to fifteen years? Just cross your fingers and hope the piper doesn’t come calling. Keep borrowing money and hope the creditors don’t catch up to you. Keep giving loans to people you know are bad risks, and hope that doesn’t blow up in your face.
Keep putting off repairing levees in New Orleans and hope “the big one” doesn’t come. Keep ignoring PDB’s warning of a domestic terrorist attack. Keep making gas-guzzling highway hogs and hope rising gas prices never come. Keep building bigger McMansions and hope people still have the cheap credit to buy them.
That’s worked so well for us, hasn’t it? “No one could have anticipated” has become our national punchline.
I don’t see why TVA should be any different from the rest of us. And if TVA has been living this way, then you’d better believe your local power utility has been doing the same.