Issues where inherently safer approaches can be successfully applied are fairly low, maybe 2%. Inherent safety framework suffers few major drawbacks - (a) not accounting for risk-benefit and (b) not providing acceptable risk criteria and a decision system to go along with it.

Eliminating hazards is may not always be practical as we know there is risk involved in every action. Even eating a burger.

Therefore as a matter of practicality, I recommend thinking of inherently safer alternative as lower risk option. 

Within the framework of risk management, one can include evaluations of safer alternatives and be able to reach a decision.  

What OSHA PSM lacks is quality metric.

Let me explain further.

For example, one of the elements of the OSHA PSM is emergency planning. As a part of emergency planning, a facility is required to develop an emergency action plan.

Now, an emergency plan can be 2-pages, 4-pages, 200-pages. What aspects should an emergency plan address? How can one be sure that the plan would work in case of an emergency? There is nothing in the PSM requirement to ensure a working emergency plan for a facility.

The difficulty is if one tries to make PSM too specific it may be more of a burden without additional benefits. This is because every facility, every unit is in a way unique and has its own subtleties. Thus solutions that are great for a facility may not always be applicable to another one. For example, an emergency plan for a facility close to a neighborhood has a different yardstick  than that of a facility located in an industrial complex. Geography may also influence emergency plan - e.g. a facility located in Texas has to think about hurricane preparedness.

So within the realms of PSM if one tries to impose more prescriptive requirements, it may overburden facilities and not necessarily reduce risks. Current PSM framework provides flexibility to attain safety goals without constraining to a solution.

I believe the key is for safety systems and programs meet intent of the PSM elements. During implementation of the PSM elements one needs to critically think about efficacy of the elements for the particular facility. Therefore, when I use the word quality in PSM elements, I mean it in a broader sense - quality of thinking in developing safety programs. Within quality element, I also include the systems you would have in place to ensure quality implementation of the well thought safety programs.

In my opinion the difference in safety performance of facilities is the quality of thinking that has gone into developing and implementing safety and risk management programs.

You will say that most M&A in oil and gas/chemical processing industries are asset-driven. You look at what the pots and pans can do for you in the future and base your M&A decision.

Remember as a part of M&A you are also acquiring the liabilities. I’m sure you are aware of aftermath of the Bhopal tragedy  on Union Carbide. Union Carbide was acquired by Dow Chemicals and so Dow inherited the liabilities but may have been saved by the Indian judiciary system.

Past liabilities may be easier to identify; however, you may incur significant costs from a safety incident in the future that may affect your sustainability and profitability. For example, the BP Texas city refinery, site of fatal explosion in 2005, was owned by Amoco till the merger in 1998. 

It is therefore only prudent to evaluate risk exposure prior to M&A, particularly if,

1. Your organization has never been involved in chemical processing / oil and gas operations and you are looking to acquire a chemical processing operation
2. You are looking to acquire pots and pans that utilize manufacturing processes and technologies significantly different than your current operations

In future posts, I will discuss what to look for as a part of safety due diligence prior to M&A.

To be precise, there have been an average of 50 serious gas pipeline incidents every year in the U.S. between 1990-2009 (Source: http://primis.phmsa.dot.gov/comm/reports/safety/SerPSI.html?nocache=4823) resulting in more than 300 fatalities. Majority of the reported gas incidents have occurred on the gas distribution lines - i.e.  gas pipeline systems that are found in thousands of communities from coast to coast and distribute natural gas to our homes and businesses.

It is almost a guarantee that you will hear about gas pipeline incidents in 2010.

Earlier, I have addressed the major causes of pipeline failures. Here I want to raise a different questions which no one appears to be discussing - is there a safer alternative to gas pipelines?

The most common uses of gas coming into homes are cooking and heating. When I lived in New Hampshire my place was heated by gas.  Granted heating homes via gas is cheaper but the electric heating poses lower risks.

I can envision one option as having gas cylinders instead of gas pipeline at least for cooking.

There are many places in the world that utilize LPG cylinders as opposed to gas pipelines. If you think about it going to gas cylinders from a pipeline, you have applied inherently safer strategies:

If I extend the logic further, one can argue local storage hubs for supplying gas to heat homes and it will still fall in the realm of inherently safer philosophy.  

Gas cylinders have two additional benefits  (a) distributed energy system and therefore lower vulnerability (b) reduced risks of intentional attack

So…what are the arguments in favor of gas pipelines? Does the benefit of low-cost gas heating justify the risks from gas pipelines?

Is the fact that the gas pipeline infrastructure has been developed and already exists, a sufficient reason for Office of Pipeline Safety to keep collecting incident data?

Concluding Thoughts

In the last couple of years, there has been considerable interest in introducing inherently safer alternatives in chemical facilities. There has been debate about mandating inherent safety. As you think through inherent safety issues and take them to a logical conclusion, you will see how a given non-inherently safer approach  also brings benefits. In applying inherent safety principles may not be a trivial exercise for existing facilities and infrastructure.

But what about new facilities and infrastructure - is there an inherently safer alternative for new gas pipelines? Any thoughts?

Our perception of risks is mainly affected by two factors:

(a) whether we are voluntarily accepting the risk. 

A good example is a refinery worker considers the risks at workplace lower than his cousin who has only read about chemical plants; and

(b) potential consequences of event or act or decision.

For a layman, judging a risk is often a function of catastrophic potential. For example, working in a nuclear plant is considered riskier than driving on the road, whereas statistics show that more people are killed every year in automobile crash than in accidents in nuclear plants.

The higher the perceived risk by the people the more is the demand to reduce such a risk, and consequently more people want to see stricter regulations to reduce risk.

As a result it piques interest from government, regulatory bodies, and policy makers and there is an increased incentive to have a regulatory oversight.

You can see the above phenomenon in action with the US Chemical Plant Security.

When a layman thinks of a terror threat to a refinery, he commonly considers the blowing up of a refinery with a Bazooka and the consequences are dramatic. Therefore, there is more interest amongst the public with respect to reducing such risks and the regulators responded with Chemical Facility Anti Terrorism Standard (CFATS).

What will (has) CFATS achieve? - More guns, gates and guards!!!

How many terrorist attacks on chemical plants have you heard about?

Has CFATS addressed the Bazooka scenario? - Can guns, gates or guards prevent a Bazooka?

Has it addressed the concern amongst people about terror threat to chemical facilities? YES!

There are many other attractive targets such as gas pipelines, water infrastructure that have a threat from a deliberate act; however, they do not paint grave enough consequences to mandate an immediate regulatory action. Pound-for-pound an attack on water infrastructure poses significantly higher risks than a chemical facility…it just does not conjure up gory images.

Perception of future risks affects regulations and these perceived risks get magnified due to uncertainties and misinformation.

Will there be a fire/explosion/dust explosion in a chemical facility this year? Will there be a gas pipeline incident this year?  

The answer to the above questions is yes.

Yet, where do you see new regulations…chemical security.

As a reader you may comment that I am stating the obvious that regulations are prioritized based on their potential impact and stakeholder interests.  Even if this is obvious, I believe it is worth reinforcing because a society’s progress is often determined by the risks it is willing to accept.

If public feels vulnerable to certain risks they will become risk averse to newer technologies or changes. Granted there may be risks involved but there are benefits associated with the risks. Without a clear idea of risk acceptance-benefit-cost, regulators are bound to be torn between unsatisfied fearful public and frustrated technologists.

The manner in which this conflict gets resolved will affect fate of societies and future generation; and yet the outcome of proposed regulations is probably governed by short-term political interests.

Without a risk acceptance criteria and a prudent risk analysis framework, any future safety regulation will be a biased one.

A safety standard has to take into account risks/benefits/uncertainty. 

Such physical explosions are also observed when water contacts molten metal or hot lava (steam explosions).

RPT is a result of near spontaneous generation of vapor as the cold LNG is vaporized from heat gained from the underlying spill surface. Take a look at this LNG RPT video.

www.youtube.com/watch?v=h-EY82cVKuA

In Houston, most highways have a speed limit of 65-70 miles per hour…although most drivers appear to assume it implies “90-mph is okay”.

Let us say the city of Houston were to remove the speed restrictions.

Instead they put forward the mandate “drive safely”.

Now, speed is no longer a criterion for receiving a ticket. You can drive faster or slower as long as you are “safe”, pedestrians are safe, public properties are safe and other drivers are safe. (where have you heard this before?General Duty Clause?)

Meet Fred. Fred bought a brand new Corvette two years ago and is pleased with the new mandate since now he can enjoy the full power of the V8 engine in the “Indi pace car”. Fast and Furious!

This is not to imply Fred is a reckless driver. In fact, Fred is a responsible individual. He is a single dad of two kids, never smokes or drinks, and is risk averse for the most part.

One day Fred is driving along the highway and is stopped by a police officer.

Fred asks the cop why he is being stopped. The cop replies, “Your tail-light isn’t working”.

Fred explains that his car is due for servicing in two months time and he plans to replace the tail light then. He further explains that knowing the tail light isn’t working, he is being extra careful while driving.

The cop replies, “While that may be true, without a working tail light you increase your chance of having an accident”.

Now, the question I have for you is should the cop ticket Fred?

Please fill in your answer in the form below.

http://risksafety.wufoo.com/forms/performance-based-vs-prescriptive-regulations/

I will share the results of the survey with you in a few days.

The characteristics of mega disasters is that 5-6 events with fairly low probabilities of occurrence line up. 

Such rare incidents are referred to by many names within the risk management community - black swans, perfect storms, aligning of stars.

Why are these rare events difficult to identify? I would love to hear your comments.

Here is Jon Stewart on frequency of the perfect storms:

http://www.thedailyshow.com/watch/mon-may-10-2010/a-nightmare-on-wall-street

It is expected that the rule will be promulgated sometime this year.

Based on the proposed SEMS rule docket, SEMS would consist of four elements:

1. Hazard Analysis
2. Management of Change (MOC)
3. Operating Procedures
4. Mechanical Integrity

Why the above elements?

The MMS analyzed incident reports and conculded that the contributing causes for majority of these incidents (80%) is one or more of the proposed four elements.

Between 2001-2007, there were 1,443 incidents in the US Outer Continental Shelf waters that resulted in

• 41 fatalities
• 302 injuries
• 10 losses of well control
• 11 collisions
• 476 fires
• 356 pollution events
• 224 events from heavy lifting (crane, hoists, winches, etc.)

Below is a distribution of contributing causes for 85% of the 1,443 US offshore events  between 2001-2007.

What surprised me further is that the Immediately Dangerous to Life or Health (IDLH) value for SO2 is 100-ppm…same as H2S!

Intuitively, I did not think SO2 was as toxic as H2S (for comparable exposure time). Definitely, not for acute exposure.

Extended exposure to SO2 can lead to pulmonary edema which can be fatal. So I can understand the ERPG-3 (60-minute exposure) value for SO2 (15-ppm) being lower than that for H2S (100-ppm).

Let us see what the LC50 values are are telling us - LC50 is the concentration of a chemical or substance which would produce death in 50% of the test subjects by inhalation route of exposure.

Here are LC50 values adjusted to 0.5-hour exposure:

• H2S : 350 ppm
• SO2 : 670 ppm

LC50 for SO2 is almost two times higher than H2S i.e. H2S is more potent than SO2.

So why is H2S IDLH same as SO2? Why SO2 monitoring levels are as low as 2-ppm?

The only explanation I can think of is that the toxic threshold vales are recommended by an expert committee. Knowing SO2 can have an irritating effect within the respiratory tract at lower concentrations they must have recommended a much lower value that LC50.