Sandia is a multiprogram laboratory operated by Sandia Corporation, a Lockheed Martin Company for th

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ECONOMIC AND INFRASTRUCTURE INTERDEPENDENCIES
Mark A. Ehlen Andrew J. Scholand

maehlen_at_sandia.gov
ajschol_at_sandia.gov
Computational Economics Group National
Infrastructure Simulation Analysis Center
Sandia National Laboratories
IA / IP
Economic and Infrastructure Interdependencies
Estimating the Microeconomic Impacts of
Infrastructure Disruptions using the NISAC
Agent-Based Laboratory for Economics (N-ABLE)
National network of production, distribution, and
end-use markets
The U.S. manufacturing sector is a complex system
of large to small firms that compete in regional,
national, and international markets. This system
is to a large extent completely reliant on
continuity of its supporting critical
infrastructure, predominantly transportation,
electric power, and telecommunications. When
these infrastructures are disrupted for even
short periods of time, there can be permanent
losses in high-productivity, high-wage sectors of
the economy. To investigate the
interdependencies between infrastructure
disruptions and national manufacturing sectors, a
study was conducted of the effects of electric
power and transportation disruptions on a
national hazardous-chemical supply chain. Results
of large-scale agent-based simulations indicate
that supply/demand and market conditions and
regulatory constraints create conditions where
the supply chain takes upwards of five months to
recover from even a two-week disruption, that
large firms are more vulnerable than small firms
to these disruptions, and that even a three-day
transport disruption can create permanent
economic losses in some sectors. To assess
potential loss prevention and mitigation
policies, simulations were conducted of a
potential management-based policy of expediting
orders. This policy would not only significantly
reduce the time to recover from a disruption but
reduce the baseline in-system and on-site
inventories of the chemical.
Simulations were conducted of the intra-and
inter-firm economic impacts to 3,300
chemical-related firms of disruptions to rail
transport.
Best response firm works hard for two months to
get input inventories back to stable levels
Adequate response firm has difficulty
maintaining 50 of desired production after
disruption
Worst response firm has hard time pre-disruption
and very difficult time post-disruption
disruption
After a disruption, larger firms are often
impacted more than small and regional market
power for sellers is large, creating strong
competition between buyers.
Detailed models of how individual firms use
critical infrastructure are developed using
publicly available and industry-expert
data. These firms are combined to create regional
economies that are reliant on regional and
national infrastructures. Stochastic simulations
of the intra- and inter-firm economic dynamics
support highly detailed national economic
security analysis and other types of
public/private policy analysis.
A potential management-based policy of optionally
expediting rail cars would decrease in-transit
inventories of the hazardous chemical by 40,
significantly reducing the risk of accidental
release of and public exposure to the chemical.
3D representation of supply chain
National railroad system (yellow), interstate
highways (dark blue), and agent-based
microeconomic firms (light blue)
2D representation of supply chain
Sandia is a multiprogram laboratory operated by
Sandia Corporation, a Lockheed Martin Company for
the United States Department of Energys National
Nuclear Security Administration under contract
DE-AC04-94AL85000.