Learning's from Major Process Safety Incidents
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1 Learning's from Major Process Safety Incidents Brian D. Rains Global PSM Practice Leader DuPont Sustainable Solutions 23 February 2012 Copyright 2010 DuPont. All rights reserved. The DuPont Oval Logo, DuPont, and The miracles of science are registered trademarks or trademarks of DuPont or its affiliates.
2 2 Objective To share Learning s from Major Process Safety Incidents and how the application of a Operations Risk Management Model can significantly reduce the probability of and consequence from such an incident Copyright 2010 DuPont. All rights reserved.
3 My background 3 I am a Chemical Engineer by training and an experienced operations leader I am currently the Global PSM Practice Leader for DuPont Sustainable Solutions I am committed to helping organizations and facilities achieve zero process safety incidents while improving viability and sustainability We preach what we practice Copyright 2009 DuPont. All rights reserved. The DuPont Oval Logo, DuPont, and The miracles of science are registered trademarks or trademarks of DuPont or its affiliates.
4 4 Safety is a DuPont Core Value Core values: Safety, ethics and respect for people and the environment $32 Billion revenue, 13 business units from electronics to plastics, paints and agricultural chemicals. Sustainable Solutions is the services oriented business unit Over 175 facilities around the world Worldwide reputation for safety DuPont applies a single Operational Risk Management system worldwide Copyright 2010 DuPont. All rights reserved.
5 5 Major Industrial Incidents 1988: Piper Alpha (Occidental) 167 killed Cost: US$1.2 billion 1998: Longford Gas Explosion (Esso) 8 killed, 69 injured Cost: US$1 billion 2005: Texas City Refinery (BP) 15 killed, 170 injured Cost: US$3.5 billion+ 1984: Union Carbide, Bhopal Reported 3000 killed Cost: Disappearance of Union Carbide Enchova Central Platform (Petrobras) 1984: Explosion, 37 killed 1988: Gas Blowout Cost: US$461 million 1991: Sleipner A Platform Collapse (Statoil) Cost: US$1.2 billion 1996: Gas Pipeline Explosion (Enron) 33 killed, 69 injured 1995: Nigerian Oil Rig Explosion (Mobil) 13 killed, 25 injured 2001: P36 Sinking Platform (Petrobras) 10 killed Cost: US$515 million 2010: Oil Rig Explosion, Gulf of Mexico (BP) Cost: >US$12.5 billion 2005: Bombay High North Platform (ONGC) 22 killed Cost :US$195 million 2006: Pipeline Explosion (Nigerian National Petroleum Corp) 200 killed Copyright 2010 DuPont. All rights reserved.
6 6 Defining Risk Risk is the potential for loss, calculated by combining possible or foreseeable consequences with realistic probability (or frequency) of occurrence. Operational risk is a portion of a business s total risk profile, specifically the operations or process related aspects potential losses resulting directly from the business s operations. Copyright 2010 DuPont. All rights reserved.
7 7 Typical Operational Risks Employee / Public Health and Safety Environmental Damage Physical Assets Business Interruption Regulatory Compliance Reputation, Public Support and Right to Operate Employee Retention / Morale Product Liability Business Value / Market Capitalization Community Economic Impact Copyright 2010 DuPont. All rights reserved.
8 8 Top Operational Risk Factors Inadequate identification / evaluation of operational risks Integrity of facilities Competing priorities, i.e., production, quality, costs Insufficient resources, both quantity and capabilities Inadequate management of change Weak compliance-to-procedures culture Failure to manage process safety risks differently from workplace safety Weak audit function Ineffective leadership Copyright 2010 DuPont. All rights reserved.
9 9 What Is Operational Risk Management? An integrated management system that identifies, evaluates, and controls a manufacturing process operational risks in a way that catastrophic incidents are prevented that could impact: People the public, employees and contractors The Environment local community / work sites Business lost assets, business opportunities, loss of customers, loss of shareholders Copyright 2010 DuPont. All rights reserved.
10 DuPont Operational Risk Management Model 10 Copyright 2010 DuPont. All rights reserved.
11 11 Why the Model Works for Successful Companies Management leadership and commitment is in the center of the wheel. Core Value A robust Managing System that identifies, evaluates and mitigates process risks at all stages of a facility's life cycle Operational Discipline encircles all the technical elements A single governance process Integrated into all business processes Flexible and adaptable to many industries Copyright 2010 DuPont. All rights reserved.
12 12 Learning s from Major PSI s 1. Every element of the Operational Risk Management Model is important Copyright 2010 DuPont. All rights reserved.
13 A Typical Incident RCFA 13 PSM Elements Analysis Performance (vs. system) System deficient Management Leadership and Commitment Technology Process Technology Process Hazards Analysis Operating Procedures and Safe Work Practices Management of Change Technology Facilities Quality Assurance Pre-Startup Safety Reviews (PSSRs) Mechanical Integrity Management of Change Facilities Personnel Training and Performance Contractor Safety and Performance Incident Investigation and Communication Management of Change Personnel Emergency Planning and Response Auditing Copyright 2009 DuPont. All rights reserved. The DuPont Oval Logo, DuPont, and The miracles of science are registered trademarks or trademarks of DuPont or its affiliates.
14 DuPont 1H2011 PSM Trends PSM Elements 14 PSM Technical Elements Mechanical Integrity 30% Operating Procedures/SWP s 18% Training and Performance 17% Process Technology 13% Quality Assurance 5% MOC- Technology 4% Top 4 for past 5+ years 1/12/2012
15 Most Frequent NEP PSM Citations (x)(x) (f)(1) Operating procedures.49 (d)(3) PSI pertaining to equipment 47 (e)(3) PHA specific criteria...40 (j)(4) MI Inspection & Testing.32 (e)(5) PHA recommendation F/U..16 (j)(5) Deficient Equipment 16 (l)(1) MOC implementation.15
16 16 Learning s from Major PSI s 1. Every element of the Operational Risk Management Model is important 2. Every element requires a managing system Ownership and accountability (who) Standard of expectations / subject matter expertise (what, when, where) Metrics, Audits and Continuous Improvement (how and why) Data management (how) Copyright 2010 DuPont. All rights reserved.
17 17 Learning s from Major PSI s 1. Every element of the Operational Risk Management Model is important 2. Every element requires a managing system Ownership and accountability (who) Standard of expectations / subject matter expertise (what, when, where) Data management (how) Metrics, Audits and Continuous Improvement (why) 3. Every element is dependent on other elements, creating the need for a holistic, interdependent and integrated complete managing system Copyright 2010 DuPont. All rights reserved.
18 Baker Panel Recommendations 18 The Panel was charged with making recommendations to improve BP s corporate safety culture, corporate oversight of process safety, and process safety management systems. RECOMMENDATION #2 INTEGRATED AND COMPREHENSIVE PROCESS SAFETY MANAGEMENT SYSTEM BP should establish and implement an integrated and comprehensive process safety management system that systematically and continuously identifies, reduces, and manages process safety risks at its U.S. refineries. Copyright 2009 DuPont. All rights reserved. The DuPont Oval Logo, DuPont, and The miracles of science are registered trademarks or trademarks of DuPont or its affiliates.
19 Baker Panel Recommendation #2 19 RECOMMENDATION #2 INTEGRATED AND COMPREHENSIVE PROCESS SAFETY MANAGEMENT SYSTEM From the Commentary on Recommendations: (1) integrated and comprehensive management system In order to be effective, a management system for process safety must be comprehensive; a weak or fragmented system will not address all of the numerous process safety risks that exist in BP s U.S. refineries. Among other things, this comprehensive management system should (b) utilize an integrated set of leading and lagging performance indicators for process safety as described in Recommendation #7 Copyright 2009 DuPont. All rights reserved. The DuPont Oval Logo, DuPont, and The miracles of science are registered trademarks or trademarks of DuPont or its affiliates.
20 Example. A minor incident investigation
21 21 DuPont Process Safety Management Model 1 Copyright 2009 DuPont. All rights reserved. The DuPont Oval Logo, DuPont, and The miracles of science are registered trademarks or trademarks of DuPont or its affiliates.
22 22 DuPont Process Safety Management Model Copyright 2009 DuPont. All rights reserved. The DuPont Oval Logo, DuPont, and The miracles of science are registered trademarks or trademarks of DuPont or its affiliates.
23 23 DuPont Process Safety Management Model Copyright 2009 DuPont. All rights reserved. The DuPont Oval Logo, DuPont, and The miracles of science are registered trademarks or trademarks of DuPont or its affiliates.
24 24 DuPont Process Safety Management Model Copyright 2009 DuPont. All rights reserved. The DuPont Oval Logo, DuPont, and The miracles of science are registered trademarks or trademarks of DuPont or its affiliates.
25 25 DuPont Process Safety Management Model Copyright 2009 DuPont. All rights reserved. The DuPont Oval Logo, DuPont, and The miracles of science are registered trademarks or trademarks of DuPont or its affiliates.
26 26 DuPont Process Safety Management Model Copyright 2009 DuPont. All rights reserved. The DuPont Oval Logo, DuPont, and The miracles of science are registered trademarks or trademarks of DuPont or its affiliates.
27 27 DuPont Process Safety Management Model Copyright 2009 DuPont. All rights reserved. The DuPont Oval Logo, DuPont, and The miracles of science are registered trademarks or trademarks of DuPont or its affiliates.
28 28 DuPont Process Safety Management Model Copyright 2009 DuPont. All rights reserved. The DuPont Oval Logo, DuPont, and The miracles of science are registered trademarks or trademarks of DuPont or its affiliates.
29 29 Learning s from Major PSI s 1. Every element of the Operational Risk Management Model is important 2. Every element requires a managing system Ownership and accountability (who) Standard of expectations / subject matter expertise (what, when, where) Data management (how) Metrics, Audits and Continuous Improvement (why) 3. Every element is dependent on other elements, creating the need for a holistic, interdependent and integrated overall managing system 4. Process Safety Management must be applied from early conceptual design through mothballing/shutdown if all Major PSI s are to be prevented Copyright 2010 DuPont. All rights reserved.
30 Confidential 30 Risk Management from Beginning to End Screening PHA PSI & PSM Critical Equipment PSSR MOC- T & F Revalidation PHA s Contractors Emergency Planning & Response Continuous Improvement / Metrics FEL-1 Shutdown / Mothballed Quality Assurance Procedure s & Training Mechanical Integrity Incident Investigation MOC-Personnel PSM Systems Auditing Final PHA START-UP Copyright 2010 DuPont. All rights reserved.
31 31 Risk Management Program Benefits Avoidance of catastrophic events that injure people, facilities, business and the environment Improved sustainability performance Improved productivity and reduced costs through reduced downtime; fewer incidents Sustained right to operate, as granted by the community, governments and other stakeholders Improved employee morale Improved credibility in the investment community Copyright 2010 DuPont. All rights reserved.
32 32 Conclusion Successful leaders identify, evaluate and mitigate operational risks by: Implementing comprehensive, integrated management systems Fostering a positive, trusting and open culture Pursuing and achieving the goal of zero significant operational incidents It is imperative that leadership set the tone at the top of the organization and establish appropriate expectations regarding process safety performance. Baker Panel Report (January 2007) Copyright 2010 DuPont. All rights reserved.
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