Thanks to emergency preparedness and quick action by local and state officials, it appears that the Oroville Dam crisis has been averted, but communities across the country should consider this incident a wake-up call.

The Sacramento Bee reports that the flood-control manual for the Oroville Dam hadn’t been updated in nearly half a century and applied obsolete weather models. Experts say that structural failures were responsible for the crisis; however, this outdated document indicates that maintaining the dam likely wasn’t the biggest priority for local officials in Oroville. And they’re not alone.

Failing grade for dams in the U.S.

The 2017 Report Card for America’s Infrastructure issued by the American Society of Civil Engineers (ASCE) gives the 90,580 dams in the U.S. a failing letter grade of a D. The report found that the average age of dams in the country is 56 years old. By 2025, 70 percent of dams will be at least 50 years old.

Although many dams were built to protect areas of undeveloped agricultural land, increases in population and development have caused dams to age exponentially. According to the ASCE, nearly a third of all dams in the U.S. pose serious risks to their communities. In 2016, the number of high-hazard dams — those with the potential for the loss of human life — had grown to 15,500. Another 11,882 dams are classified as a “significant hazard,” meaning their failure would cause economic losses but not necessarily loss of life. At least 2,170 dams qualify as both high-hazard and deficient.

Part of the country’s aging infrastructure

Dams are active systems that, like a road or a bridge, need to be maintained, or they’ll fall into a dangerous state of disrepair. Given that the average age of a dam that fails is 62 years, many of our nation’s dams have an increasing likelihood of failing within the next decade if immediate preventative measures are not taken. Furthermore, the engineering and construction standards available when many of these dams were built don’t stand up to the increased prevalence of floods and earthquakes.

Communities should review reports from experts who routinely inspect dams and provide a list of recommendations to ensure they meet today’s design and safety protocols. Each state uses slightly different criteria, but broadly speaking, dams are classified in three buckets: acceptable, minimally acceptable or not acceptable. Communities that are near a dam also need to have an emergency action plan in place in case they find themselves in a worst-case scenario, as Oroville did.

According to the ASCE, repairing high-hazard dams will require an investment of nearly $45 billion. In the long run, however, restoring dams proactively will be less expensive for taxpayers than having to go into emergency mode.

Learning from the Oroville Dam crisis

On Aug. 1, 2007, the I-35W Mississippi River bridge in Minneapolis collapsed, killing 13 people. This tragic incident caused a spike in interest around bridge safety that trailed off as more time passed. Fortunately, the Oroville Dam crisis did not result in loss of life, but communities that are in close contact with a dam should take it just as seriously.

For years, there were signs that the Oroville Dam presented a potential hazard. Again, they’re not alone. Tens of thousands of dams in the U.S. could currently cause economic catastrophe or worse. Now that the Oroville incident has heightened awareness, local officials should adopt a long-term approach to ensure that dams — and their entire infrastructure — are safe.

For brokers who specialize in property and casualty insurance, now is the time to sit down with clients and evaluate the potential risks of dams and other aging infrastructure. The Oroville Dam crisis received widespread, national media attention, and it’s easier for brokers to convey the exposures a dam breach causes local businesses and communities when the news footage is fresh in their minds.

Clients need to understand the impact a similar disaster could have on their operations and revenue streams — not only first hand, but second hand as well. For instance, if local businesses were unable to operate due to damaged infrastructure, this disruption would cause economic losses not only for the businesses themselves, but also the local municipality that relies on their tax revenue. Municipalities can be directly affected as well — for example, if a facility or park becomes unusable due to a disaster, this could translate directly into lost revenue.

Dams provide countless benefits — including drinking water, irrigation and flood control — but they could also devastate the same communities that rely on them without proper maintenance. As more time passes and headlines move away from the Oroville Dam crisis, it is essential that local officials don’t fall into the trap of complacency. Otherwise, we will undoubtedly see similar incidents as more dams are challenged by unsatisfied maintenance and weather events.

Timothy McCarty is Associate Vice President, Risk Control Manager at Trident Public Risk Solutions, a member of Argo Group International Holdings, Ltd. You can reach Tim at tmccarty@tridentpublicrisk.com or at (413) 773 6345. Opinions expressed in this article are the author's own.

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What local officials and insurers can learn from the Oroville Dam crisis

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