Plant Safety and Optimism Bias

Today, for the second time in the past several months, the New York Times published an editorial calling for a "tough chemical plant safety bill." The paper correctly points out that chemical plants are uniquely vulnerable to terrorism and could be on the receiving end of a catastrophic attack. In spite of this, industry has lobbied against some of the tougher proposed rules, the paper notes.

Should this be the case, industry's opposition to the toughest safety measures is perplexing. Employees of chemical companies are, obviously, especially vulnerable to such an attack. Millions of dollars in production and capital investment would go to waste in the event of an attack on a plant. The public response to a catastrophic attack on a chemical plant would have far-reaching consequences, probably changing the face of the U.S. chemical industry forever.

Perhaps this is a case of optimism bias – the industry is considering the up-front cost of compliance with tough rules, and not exponentially higher cost of dealing with the aftermath of a deadly attack. One thing the industry would do well to remember in this debate is that no one is more vulnerable to an attack on a chemical plant than chemical companies themselves.