Impacts to the chemical manufacturing sector can come from changes in regulatory policy or from physical threats like natural disasters. A natural disaster, accident, or intentional attack can damage chemical plants, ports, pipelines, and rail and road transportation routes, impacting the ability of chemical facilities to produce and deliver chemicals.

The chemical industry and supporting government agencies need to understand chemical supply chain relationships, dynamics, and cascading effects to improve the sector’s resilience to these disruptive events. This includes the sector’s ability to prepare for, respond to, and recover from disruptions.

The U.S. Chemical Sector converts raw materials into countless products used throughout all aspects of life. Consequently, events that change the functional dynamics of the chemical manufacturing industry can have significant impacts on the economy and national security. NISAC’s chemical supply chain analysis capability includes the following tools, each providing complimentary degrees of detail depending on the depth of analysis required and time allotted:

NISAC has developed N-ABLE™ to assist federal decision makers in improving the security and resilience of the U.S. economy.  N-ABLE™ is a large-scale microeconomic simulation tool that models the complex supply-chain, spatial market dynamics, and critical-infrastructure interdependencies of businesses in the U.S. economy. N-ABLE has been designed in particular to model how U.S. businesses can adapt to and recover from disruptive events; N-ABLE-based insights have been used to evaluate private-industry and if necessary public policies that can mitigate if not prevent significant economic impact.

N-ABLE models the economy at the level of individual firms: each N-ABLE firm has buyers, production supervisors, sellers, and strategic planners who manage their own supply chain through normal conditions, disruption conditions, and recovery. Firms interact with each other in regional markets and in their collective use of the critical infrastructure systems (road, rail, and water transportation; pipelines; electric power; telecommunications).

A “Laboratory” for Policy Analysis

N-ABLE has been used to answer economic policy-related questions such as:

• Which economic sectors and regions of the country are affected most by infrastructure disruptions?
• How long is it before regional economic impacts affect other regions of the country? Are these cascades caused primarily by regional market effects or critical infrastructure effects?
• How do the nation’s critical infrastructure systems impact the level of economic impact and time to recovery?
• Are small firms more vulnerable to disruptive events than large firms? If so, what business continuity and other business strategies can ensure their resilience to these events?
• What types of firms are most influential toward national economic resilience to these disruptive events?
• What are the most effective private industry and public policy tactics for economic loss prevention, mitigation, and overall resilience?

Over the past 10 years, N-ABLE has been used in NISAC FAST analyses and in more detailed, longer-term NISAC analyses to analyze the impacts of:

• electric-power and rail-transportation disruptions on the U.S. chlorine supply chain,
• hurricanes on large-scale domestic and global chemical supply chains,
• terrorist acts on commodity futures markets,
• changes in U.S. border security technologies on U.S. firms that import and export commodities in global supply chains,
• a pandemic influenza on the U.S. agriculture and food supply chains,
• pandemic-related household stress on wholesale-to-retail food supply chains, and
• cost-optimized military-parts global supply chains on war-time equipment uptime.

As one example, NISAC used N-ABLE to estimate the potential impacts to the U.S. chlorine supply of a rail-transport disruption;the N-ABLE supply chain model was composed of 3,000 chlorine producers, packagers, and end users and the supporting rail and road critical infrastructure. Collaborating with chlorine-industry and NISAC subject-matter experts, NISAC conducted hundreds of simulations of disruptions to the transportation infrastructure; results included detailed assessments of which industries and regions of the country would be impacted the most. Furthermore, analytical results indicated that if shippers could optionally expedite their chlorine orders at a cost to themselves, they would create significant benefits to homeland security including:

• significant reductions in the number chlorine rail cars required for normal operations, thereby significantly reducing the potential of chlorine rail cars being used as a WMD;
• significant reductions in the time to recovery from a given transport disruption;
• significant reductions in the “bullwhip” effect created by post-disruption surges in chlorine demand, and
• lower average on-site inventory levels.

A Flexible, Data-Driven, Collaborative Simulation Architecture

To serve the rapidly changing homeland security scenario arena, N-ABLE uses an extensible data-driven software architecture that allows for rapid development of new models of economic firms, households, critical infrastructure supply chains, and the supporting physical infrastructure systems. And N-ABLE’s client-server architecture allow many subject-matter experts, economic analysts, modelers, and stakeholders to participate in N-ABLE-based scenario analysis.

NISAC designed advanced modeling and simulation capabilities to analyze critical infrastructure vulnerabilities, interdependencies, and complexities. These analyses are used to aid our nation’s decisionmakers in policy-making,

assessments, mitigation planning, education, training, and real-time assistance to crisis response organizations.

The domains in which we work are large, complex, dynamic, adaptive, nonlinear, and behavioral; they are too complex for mental models to be effective decision tools. Our capabilities can identify when/where things break, and any cascading effects. We can quantify consequences of disruptions in very complex systems, such as a loss of a single asset or node within a particular system due to a directed attack, or regional disruptions due to a natural disaster or large-scale attack. The rational choice is to experiment with models, not the system, thereby gaining expert operational insight through modeling.

Models used for any given analysis range from realistic to abstract, depending on the questions being posed.

Analysts study the details of individual infrastructures, from the asset to the system level, interactions between infrastructure, and how critical infrastructure respond.

Natural disasters or imposed threats require NISAC analysts to employ their knowledge of different infrastructures along with a variety of capabilities, including modeling and simulation, to provide real-time assistance to decision makers.