Category Archives: Risk Assessment

Blind Men, Elephants, and Zen – Approaching Basin Evaluation Like a Cup of Tea

This post presents a point of view that I have found tremendously useful when approaching basin evaluation, and evaluating behavior of water resources.  In particular, it applies to approaching relatively complex structural basins.  Within these types of reservoirs – water is often significantly controlled by structural geology.  Geologic structure and its underlying driving tectonics impart a rock “fabric” – or “grain” – that is not a function of sedimentation.  This “fabric” is in the form of faulting, jointing, fracturing, and other phenomena, and can facilitate, re-direct, or impede groundwater.  Small, let alone large, variations in stratigraphy and sedimentary development can have orders of magnitude influences on storage and transmissivity.  As important as these factors are – however it is my experience that they are so often ignored for the sake of modeling and “conservatism” – and/or because of a lack of recognition, appreciation and understanding of these phenomena for whatever reason.  Continue reading

Project Evaluation III: Risk Premium and Risk Assessment

Project evaluation must consider project risk.  Water yields vary with hydrologic and regulatory conditions.  Project construction and operations face potential pitfalls.  Will a 100-year flood or earthquake impair/destroy facilities?  Prices of project outputs and inputs are variable.  Will run-up in energy prices or decline in water demands from a weak economy threaten project viability?  The list of project risks is long.  Continue reading