Tue, Jul 20, 2004 - Page 16 News List

Rumblings of disaster in Oz

Most earthquakes in Australia occur in the outback, but if a big temblor hit Sydney the effect would be devastating

REUTERS , Sydney

The Sydney skyline is lit by the setting sun. Despite Australia's 200 annual earthquakes, in remote locations, scientists say there is no reason an earthquake will not hit the country's largest city Sydney, population 4.5 million, where even a moderate quake could cause devastation and death.

PHOTO: REUTERS

Australia is shaken by about 200 tremors each year, but most register only about 3 on the Richter scale and usually occur in the outback, scaring a few birds and kangaroos.

But scientists say a major earthquake could strike Australia's largest city Sydney, population 4.5 million, and even a moderate quake could cause devastation and death.

The strongest quake on record in Australia registered about 6.9 on the Richter scale, matching the strength of Japan's Kobe earthquake in January 1995 that killed more than 6,400 people.

"Large earthquakes have occurred in sparsely populated areas. You can't discount that possibility, that a large earthquake might occur in the Sydney area," said Phil Cummins, head of the earthquake hazard team at government agency Geoscience Australia.

In fact, every five years or so a potentially disastrous earthquake of 6.0 or more on the Richter scale rocks Australia and a quake as high as 7 is expected to occur every 100 years.

And scientists say the larger quakes are more likely to hit the edges of the Australian continent where the vast majority of the population lives.

Australia's most damaging earthquake, a moderate 5.6 on the Richter scale, occurred in December 1989. The quake struck the coastal coal-mining city of Newcastle, killing 13 people, injuring 130.

Total estimated losses were US$4 billion, including uninsured losses, damage to infrastructure and community disruption, according to Emergency Management Australia, a government disaster management body.

Newcastle, with a population of more than 300,000, is about 140km north of Sydney.

CATASTROPHE GAME

Earthquakes, bushfires, cyclones and floods have the potential to cause havoc in Australia and the largest exposure to most of these risks is Sydney, given its status as the country's center of commerce and large population.

In the world of earthquakes, risk analysts play what they call "the catastrophe game" to figure out the odds of a quake hitting a city like Sydney.

There is only a small chance of a major earthquake striking Australia's eastern seaboard. But, as the Newcastle quake showed, they can happen and can cause extensive damage.

Regulators, particularly after the massive losses caused by the Sept. 11 attacks on the US, require Australia's insurers to buy a high level of cover.

"[Germany's] Munich Reinsurance were here almost a year ago. They cover the major disasters in the region. That was one of their major scenarios, a large earthquake in Sydney. That was one of their major concerns," Cummins said.

Insurance Australia Group Ltd, the country's largest insurer, has cover for earthquake losses of up to A$3 billion (US$2 billion) for this year. That figure includes coverage for quakes in nearby New Zealand, where the much greater likelihood of earthquake damage is also covered by a state-funded disaster insurer.

"Insurers have to buy cover to a level that means there is no more than a 1-in-250 chance of it being insufficient. You can assume that the risk is believed to be no more than this (US$2 billion)," an IAG company spokesperson said.

GUESSING GAME

The frequency of earthquakes is lower in Australia than in its Asia-Pacific neighbors because the continent sits on the Indo-Australian tectonic plate, rather than on a volatile edge.

Earthquakes are most common where different tectonic plates meet, for example in earthquake-prone New Zealand to the southeast, which straddles the Indo-Australian and Pacific Plates.

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