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Sunday, Nov 27, 2022
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The Number

In 2008, the U.S. Geological Survey published a report that calculated the damages from a magnitude 7.8 earthquake on the San Andreas Fault in Southern California. Estimated property losses totaled $200 billion. Estimated Property Damage of a San Andreas Fault Earthquake The good news is that those building retrofits and safety measures by state agencies and private building owners have reduced the potential damages of future earthquakes. “Because of these mitigation measures, the total financial impact of this earthquake is estimated to be ‘only’ about $200 billion with approximately 1,800 fatalities,” the report stated. “However, these are still big numbers.” Why bring up an eight-year-old study now? Because earlier this year at a scientific conference, Thomas Jordan, director of the Southern California Earthquake Center in Los Angeles, said the San Andreas Fault has accumulated energy for the last century and is overdue for a shake. He described the fissure as “locked, loaded and ready to roll.” The San Andreas runs nearly the North-South length of California. In the Valley region, it passes through the southern end of Palmdale and along the mountains near Littlerock, then heads east to San Bernardino. The bad news is that the $200 billion only includes hard losses. Business interruption costs would add another $54 billion, and with the economic multiplier effect, the estimate reaches $96 billion. Businesses can’t change the Valley region’s geology, but they can prepare for an emergency. That involves more than just immediate personnel safety and includes business interruption planning and communication with suppliers. As a disclaimer, the report noted that its estimates should not be used to decide where to live or work, change building codes or evaluate the cost-effectiveness of earthquake preparation measures. – Joel Russell

Joel Russel
Joel Russel
Joel Russell joined the Los Angeles Business Journal in 2006 as a reporter. He transferred to sister publication San Fernando Valley Business Journal in 2012 as managing editor. Since he assumed the position of editor in 2015, the Business Journal has been recognized four times as the best small-circulation tabloid business publication in the country by the Alliance of Area Business Publishers. Previously, he worked as senior editor at Hispanic Business magazine and editor of Business Mexico.
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