About one-third of the U.S.'s $18 trillion gross national productis generated by industries vulnerable to changes in the weather.There were 14 weather events that caused at least $1 billion indamages in the U.S. last year, according to the National Centersfor Environmental Information. (Photo: Shutterstock)

(Bloomberg) –Every uptick in wind speed along the Gulf of Mexicoshoreline is of enormous interest to Mike Eilts.

Eilts, senior vice president for weather at DTN, aMinnesota-based analytics firm, knows that an unexpected cold frontin Louisiana, nudged southward by a jet stream unsettled by globalwarming, can push rising winds into the Gulf, putting dozens offloating oil rigs at risk.

The rigs can withstand hurricane-force winds of 80 miles perhour if they have time to turn to face the tempest. But if they'rehit from the side, their pipes can be severed with just a bit morethan a 35-mile per hour breeze. DTN is paid to make sure thatdoesn't happen.

“If they get blow-off, it's a huge problem that can cost themabout $15 million each per event,'' Eilts said in a telephoneinterview. “We run special models to watch those fronts, and wecall out the captains of each ship within three hours of a coldfront coming.''

From IBM and AccuWeather Inc. to outfits like Riskpulse, Jupiterand DTN, companies that track weather have created an intenselycompetitive new industry in just the last five years. Theirclient lists have grown to include insurers, banks and commoditytraders, engineers and architects, shippers, retailers and thetravel industry. And little is done without their input.

As global warming makes extreme weather more common,meteorologists have become the high priests of finance, mitigating uncertainty and boostingrisk-related profits. “There's kind of a wave building,” said ToryGrieves, membership manager at The Collider, a North Carolinanonprofit that helps climate entrepreneurs train and network.

Billion-dollar weather disasters onthe rise. (Chart: Bloomberg)

Will the Polar Vortex leave a beer or mayonnaise-filled freightcar stranded in Chicago? Losing just one car load to frozenswitches on the line can cost a shipper $30,000, according toStephen Bennett, founder and chief operating office for Riskpulse,a San Francisco-based weather analytics firm. The average shipmentinvolves 50 cars per train, Bennett said, and high volume shipperscan use five trains a week.

The bottom line: Just a one-week delay affecting a major shippercan cost companies involved as much as $7.5 million.

Bennett knows exactly where every rail car and truck carrying aclient's goods is located, he said in an interview. Their locationsare constantly monitored for weather risks using proprietarycomputer models built by Bennett and others. The computer thenspits out the best way to get around hurricane force winds, soakingrain, blinding snow or extreme cold, like the -23 degree Fahrenheit(-30.5 Celsius) deep freeze that hit Chicago in January.

Mary Glackin, vice president for weather business solutions andhead of public-Private Partnerships at International BusinessMachines Corp., says companies can no longer depend on anyindividual's past experience to predict when and where extremeweather will hit, and its consequences.

Instead, she said, forecast teams at IBM use complex algorithmsand supercomputers to give businesses “a most-likely scenario, anda number two too.”

IBM bought the Weather Company's product and technology assetsin January 2016, and now works with cities and big utilities tohelp them deploy resources before a big weather event hits. Forinstance, Glackin said, they help utilities determine when andwhere they should shut off power lines, or when cities or utilitiesneed to send out an early call for added workers to get power linesrepaired and help quicken the cleanup.

Early on, IBM surveyed 1,000 c-suite executives on what theyneeded from their weather services. They don't care “what theforecast is,” said Glackin, who is also president-elect of theAmerican Meteorological Association. All they really wanted wasvery specific insight “on what to do to decrease their risk.”

The teams that do this are often extraordinarily broad-based.Along with meteorologists, they can include hydrologists who studythe flow of water, atmospheric scientists, civil engineers andarchitects, computer experts and, in some specific cases, formerfarmers and railway workers.

No one company “will be the silver bullet for all the differentindustries and types of climate risks,” said Grieves, themembership manager at The Collider in Asheville.

About one-third of the U.S.'s $18 trillion gross nationalproduct is generated by industries vulnerable to changes in theweather. There were 14 weather events that caused at least $1billion in damages in the U.S. last year, according to the NationalCenters for Environmental Information. That's more than the 6.2 peryear average from 1980 to 2018.

And the U.S. is just one part of the picture. Globally, 39weather events caused at least $1 billion in damage, according toMunich Re, a German reinsurance firm. The average worldwide since2000: 28 a year. Extreme weather hit 62 million people last yearalone and forced 2 million to relocate, according to the UnitedNations weather agency.

“What you can be sure about is that these things will occur morefrequently, and be more intense,” said Anders Levermann, professorof dynamics at the Potsdam Institute for Climate Impact Research inGermany, in a telephone interview. “In the longer term, the globaleconomy will be shaped around the weather.''

Rich Sorkin, chief executive officer for the analytics firmJupiter Intelligence saw the writing on the wall 10 years ago.That's when he founded a company he named Zeus to do 30-dayforecasts for the power sector and commodity traders, using thethen-nascent trend in enterprise computing.

“For a variety of reasons we were a bit too early,” Sorkin said.But the effort served as a “warm-up” for what's now Jupiter, bornin 2017. Since then, Sorkin has assembled a roster of climatescience all-stars including Josh Hacker from the National Centerfor Atmospheric Research, Elizabeth Weatherhead, a specialist inarctic climate, and Alan Blumberg, a researcher in how coastalcities and their oceans get along.

The goal: Provide clients with local weather projections on timescales ranging from hours to decades.

In March, Jupiter announced it completed a $23 million Series Bfunding round to expand, and that it was partnering with Australianinsurer QBE Insurance Group Ltd. and the Bermuda-basedinsurance-linked securities firm Nephila Capital Ltd.

“With each passing year, it becomes clearer that the insuranceindustry must factor climate change into its underwriting andpricing practices,” David McMillan, group chief operations officerat QBE, said in a statement. “Climate change affects everything wedo as a company.”

There was a time when forecasters were largely hired by themedia and the government, and most weren't highly paid. Now, manyare paid at similar levels to top engineers graduating from thebest technical schools in the nation, and their skills are widebased.

South Pennsylvania State University, for instance, offers a riskmanagement option on how weather — from extreme events to thetiniest of changes — can move financial markets, as well as fourclasses that aim to improve student programming and data-analysisskills.

“We've found that students who follow that track are oftencoveted by employers,'' said Jon Nese, a professor in themeteorology and atmospheric science department.

ZipRecruiter Inc., an online employment marketplace, says jobpostings for atmospheric scientists, including meteorologists, rose16.5 percent between 2016 and 2017, and 25.8 percent between 2017and 2018.

In recent months, ZipRecruiter has seen growing job openings inthe field for companies that support air travel, space travel,marine cargo, shipping companies, disaster response andagriculture, according to its labor economist, Julia Pollak.

When IBM's Glackin speaks at colleges, she says she likes to askmeteorology students “what it is you want to combine this degreewith? Is it business? Is it some kind of social science? Economics?Because you will be much more valuable if you can bring multiplekind of perspectives together,'' she said.

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