California Faces Average Annual Loss of Billions Due to Earthquake Damage, DOC Study Shows; On the Average, Earthquakes Will Cost Residents $130 Each Per Year.

Business and News Editors

SACRAMENTO, Calif.--(BUSINESS WIRE)--Sept. 19, 2000

Major earthquakes will occur in urban areas of California sometime in the next few decades. While it's unknown where or when the temblors will strike, they will be costly, according to a new report issued by the California Department of Conservation.

The report, entitled "An Evaluation of Future Earthquake Losses in California," can be viewed on the DOC Web site, www.consrv.ca.gov.

The estimated average annual loss from earthquake damage to buildings only for that time frame is $3.9 billion in today's dollars; that's $130 per resident per year. When associated losses to contents, inventory and income are added, the expected annual loss in California increases to about $4.7 billion. That total does not reflect the cost associated with injuries to occupants or other economic losses.

"This report is being issued to provide a background for the consideration of policy issues," Department of Conservation Director Darryl Young said. "There is no denying the fact that major earthquakes will occur in California. By confronting that reality, by estimating some of the potential costs, we hope to be better prepared to deal with the needs of Californians, to minimize the damage and expedite recovery."

Among the policy issues raised by this report:

-- What amount of expected damage could be mitigated in a cost-effective
manner?

-- What kinds of structures contribute most to the losses?

-- How can structural mitigation be a cost-effective approach in reducing
damage?

-- What roles do local, regional and state governments have in identifying
hazards and in encouraging or requiring actions that reduce building damage?

During the past 30 years there has been as much as $56 billion of property damage in California. The 1994 Northridge earthquake caused the largest loss.

"Our goal is to promote cost-effective mitigation strategies before, rather than after, the next major earthquake," DOC Director Young said. The Department of Conservation's Division of Mines and Geology -- which monitors seismic activity and provides maps and other tools used by engineers and emergency personnel -- conducted the damage loss estimate study.

The evaluation uses an earthquake model developed by DOC/DMG and the USGS in collaboration with other scientists familiar with California's seismic hazards. The building damage estimate uses HAZUS, a program developed by the National Institute of Building Standards for the Federal Emergency Management Agency.

HAZUS evaluates the damage potential of several standard building types using the experience of structure damage from previous earthquakes and the judgement of structural engineers about how those structures will endure earthquake shaking.

The DOC report was issued concurrently with a FEMA report, the first national study of earthquake risk across the United States. According to that report, 75 percent of the nation's annual losses are expected to occur in California. The full FEMA report can be seen at www.fema.gov.

Aside from studying and mapping earthquakes, landslides and mineral resources, the California Department of Conservation ensures reclamation of land used for mining; administers the state's beverage container recycling program; and regulates oil, gas and geothermal wells in the state.