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Process Safety Management in the Oil and Gas Industry

| January 13, 2017

Abstract

This paper provides a discussion of process safety management applied to the global oil and gas industry. The importance of maintaining regular risk assessments and environmental impact assessments has been indicated upon the completion of this research. The focus of the study is on integrating different management tools, such as EIA and HSE-MS, to evaluate the potential risks pertaining to development projects in the oil and gas industry. In addition, the report explores specific lessons learned from the defence industry, indicating that HSE management systems may be effectively applied to the oil and gas industry as well.

Introduction

The occurrence of various incidents and hazards occurring in the oil and gas industry is quite frequent, thereby necessitating the adoption of effective and reliable measures to mitigate such risks (Ovind and Sneve, 2004). It has been argued that Health, Safety and Environment Management Systems (HSE-MS) have a positive impact on the functioning of global oil and gas companies considering the high level of accuracy of assessments provided by this management tool (Bergh et al., 2014). The objective of the present report is to explore the feasibility of process safety management in the oil and gas industry.

Process Safety Management in the Oil and Gas Industry

Significant aspects can be learned in improving human factors in the oil and gas industry from industries, such as aviation, nuclear power and defence. However, the oil and gas industry demonstrates specific challenges that can make it difficult to apply design process and standards that have led to positive results in other industries (Ramirez et al., 2013). The development of various processes and standards has adhered to meet the needs emerging in the global oil and gas industry. Scientific research extensively focuses on the psychology of how irrationality and cognitive biases may lead to inadequate risk assessment and improper decision-making processes. Thus, the necessity to create practical and simple solutions is urgent than ever (Bergh et al., 2014).

The introduction of Health, Safety and Environment Management Systems (HSE-MS) is important part of this process. Basic elements of HSE-MS include commitment to appropriate leadership practices, setting of clear goals and objectives, and undertaking strict risk evaluation and control procedures  (Ash, 2010). When organisations in the oil and gas industry adhere to these aspects of their overall management, positive results can be expected in the long term. Communication among all divisions of organisations should be ensured in order to meet the expectations of all stakeholders in the industry. Management should provide commitment and personal involvement in health, safety and the environment as a whole (Zimolong and Elke, 2006). A proper expectation that could be indicated relates to setting a personal example of following major HSE rules. The decisions that could be made should consider aspects of quality, cost, morale, and production.

In the process of introducing HSE principles in the oil and gas industry, it should be pointed out that allocation of resources should be done effectively in an attempt to carry out some of the most important functions of HSE. The development of local HSE policies should be in line with corporate objectives and standard as relating to the oil and gas industry (Ramirez et al., 2013). Setting objectives for continuous improvement should be the focal point of introducing such policies. All levels of management should be involved in similar processes to achieve optimal efficiency and productivity. In addition, certain objectives should be developed to mitigate risk within organisations operating in the oil and gas industry. The stage of risk evaluation and management should be consistently introduced in oil and gas companies in order to adhere to major HSE management guidelines that may contribute to decreasing the risk of incidents in this industry (Zimolong and Elke, 2006). This step is associated with the establishment of a proper methodology that outlines acute and chronic hazards including their perceived effects. Moreover, it is important to conduct flexible hazard assessments at the design, development and operating stages. The application of risk management tools may significantly facilitate the process of achieving of the set policy objectives.

It has been identified that an effective legislative programme requires three essential dimensions: powerful and well-resources regulations, setting accountability parameters to drive appropriate behaviours in the industry, and ensuring solid industry support (Berg et al., 2014). The globalisation of HSE issues for the oil and gas industry should be explored in order to demonstrate a process of setting high standards of performance in the field. In 2011, the European Commission released a series of legislative proposals to guarantee offshore safety (Ramirez et al., 2013). The focus on preserving the natural environment has been properly maintained. HSE policies are expected to cover oil spill and emergency response preparedness, quality assurance and management systems. The utmost goal of similar initiatives is to ensure a healthy and safe environment for employees in oil and gas companies as well as for residents of different countries (Ash, 2010).

The conduct of particular operations from the oil and gas industry should be done with the consideration of strict professional standards for safety. In fact, the safety of employees should be taken into consideration as well as the environment and economic values. In general, oil and gas companies are committed to developing of proper systems for monitoring of their technical facilities and plants. The occurrence of various incidents in the industry, such as the Macondo incident, the US Department of the Interior undertook drastic measures in 2011 to mitigate risks in this sector (Haight, 2013). Two new agencies were created to monitor a series of operations and activities in the Gulf of Mexico, as these are the Bureau of Safety and Environmental Enforcement (BSEE) and the Bureau of Offshore Energy Management (BOEM). In addition, the Department was responsible for issuing new and more effective regulations to address the specific roles and functioning of these two agencies (Bergh et al., 2014). Product specifications along with emission controls and climate change programmes have contributed to the development of proper and highly effective HSE systems. It can be suggested that these aspects can have a significant impact on the production and profitability of different products introduced by oil and gas companies.

Moreover, there are certain environmental laws that require organisations that operate in this industry to restore all areas in which particular incidents or unauthorised release of various hazardous materials have taken place. It can be anticipated that HSE laws and regulations can have a rather positive impact on the operations of oil and gas companies (Zimolong and Elke, 2006). However, it may be challenging to indicate what would be the potential future effects of certain legislations adopted in the context of the global oil and gas industry. There may be risks associated with HSE costs and liabilities, which may be evident in the activities of global oil and gas companies. Thus, such organisations recognise the importance of implementing solid HSE standards and management tools to facilitate the accomplishment of certain outcomes (Ash, 2010).

One of the legislative frameworks that provide substantial information on applying HSE standards in the oil and gas industry is the IADC HSE Case Guidelines. These guidelines “provide a framework for developing an integrate health, safety and environmental management system for use in reducing the risks associated with offshore and onshore drilling activities” (International Association of Drilling Contractors, 2014). The significant of the guidelines reflects in the adoption of high standards that can help in increasing global health, safety and environmental awareness in relation to the oil and gas industry. The worldwide acceptance of the guidelines in countries such as Australia, Canada, South Africa and Cuba implies their universal applicability to solve emerging challenges in the respective industry (Ash, 2010). The need to assist regulatory authorities around the world may contribute to the delivery of standards and principles that are closely tailored to correspond to the needs of oil and gas companies. Emphasis is put on reassuring that the most proper industry practices have been implemented in terms of health, safety and environmental concerns.

Lessons from the Nuclear Power of the Defence Industry

Thus, the focus can be shifted to learning important lessons from the nuclear power of the defence industry. One of the crucial lessons learned so far is that of interaction considering that different legislations throughout the world may demonstrate the adoption of similar approaches to mitigate risks in the oil and gas industry (Bergh et al., 2014). Interaction emerging at all stages of the assessments is important to make sure that all needs of the stakeholders in the industry are met. Another lesson that can be learned from the defence industry and applied to the oil and gas industry relates to access to information. It is essential to understand that particular parts of the development projects may contain classified information (Zimolong and Elke, 2006). Such details may be significant in the process of carrying out the intended assessment procedures. Timing also is a valuable lesson that can be drawn from the defence industry in terms of focussing on all points during the project planning stage. It should be initially noted that assessments involving EIA and HSE-MS tools serve as an adequate decision support system that should be available in a timely manner.

Analysis of Human Failure Contribution to Process Risk

In order to gain understanding of human reliability and accident causation, it is important to focus on various HSE management tools including HAZID, HEMP and HAZOP. One of the most powerful tools for the identification of major hazards and risks, which can be implemented in the global oil and gas industry, is HAZID (Ovind and Sneve, 2004). Its use is recommended to be done early to demonstrate greater precision and accuracy of results. The key benefits of HAZID include fast identification and correction of potential deviations, providing records of hazards to avoid and mitigate further risks in the global oil and gas industry (Rausand, 2013). The method actually represents a design-enabling tool used to enhance the HSE parameters in particular projects.

Furthermore, the Hazards and Effects Management Process (HEMP) was designed to present a highly structured approach to analysing various hazards in the life cycle pertaining to installation processes in the industry. This method refers to a three-day session in which participants are provided with significant information on risk management and essential HEMP principles, including HEMP’s role in the HSE management systems (Bergh et al., 2014). The management tool identified as HAZOP has been also found useful in identifying and mitigating risks pertaining to the global oil and gas industry. The initial use of this instrument has been considered for the proper identification of hazards through flowsheets and diagrams. It also implements safety audit after several months of operation (Rausand, 2013). Specific procedures considered by oil and gas companies refer to determining the precise degree of hazard and expected change as well as a consideration of the worst case accident that may occur as a result of the modification. In addition, the management tool requires the appointment of a competent, qualified person to comply with the strict requirements for HAZOP (Ramirez et al., 2013).

Case Study of Operating Events at Commercial Nuclear Power Plants

However, it is important to focus on the aspects of human failure contribution to process risk as applicable to various events that take place at power plants. The main tools that have been implemented to identify safety events, in which human failure contribution to process risk was investigated, refer to the Nuclear Regulatory Commission (NRC) Accident Sequence Precursor (ASP) Program and the Human Performance Events Database (HPED). Events in this case were selected on the basis of SPAR analyses that contributed to a proper estimation of human errors that eventually increased risks to the completion of these events (Rausand, 2013). In addition, different human error categories and subcategories have been identified to demonstrate greater accuracy of findings. The formation of categories took place in line with their frequency of occurrence (Gertman et al., 2001). Major categories included command, control, resource allocation, operator actions, communications, design deficiencies, design change testing, configuration management, as well as procedures of maintenance and monitoring of various work processes (Zimolong and Elke, 2006).

It has been argued that human failure substantially contributed to process risk in relation to operating events. For instance, seven human errors have been identified to contribute to the emergence of numerous event failures in the identified power plants. Another challenge that has been observed in this case study referred to the lack of attention to recurrent problems (Ash, 2010). In fact, the lack of attention and care to recurrent problems was estimated in approximately 41% of the operating events (Gertman et al., 2001). Such inattention mostly related to improper NRC inspection findings, industry notices, and vendor notices. Operating with known design deficiencies also created certain problems at the commercial nuclear power plants. Human failure was evident in the inability or error to follow plant and industry trends as well as provide timely responses to industry notices (Ramirez et al., 2013).

Active human errors were identified as quite problematic pertaining to command and control and resource allocation failures, amounting to almost 28%. For instance, it has been indicated that command and control between Oconee Unit 2 1992 and Keowee hydroelectric station turned out to compromise or challenge the response from the plant (Gertman et al., 2001). The tasks performed by Keowee staff seemed to have affected emergency power at Oconee without receiving proper notifications from control room management. This is a clear example of how human failure contributed to increased risks of operating events. In this relation, it is essential to separate human actions in pre-initiator categories and post-initiator categories (Rausand, 2013). Pre-initiator actions are recognised as actions that may affect the availability of systems and elements associated with the response to incidents. Such actions mostly include errors in restoring particular systems after maintenance procedures at the plants (Zimolong and Elke, 2006). Post-initiator human actions represent a type of responses to incidents occurring in the power plants, as they may be also recovery actions in terms of restoring certain failed systems.

It can be suggested that latent human errors mostly suppose a direct relation with pre-initiator human actions, as they are further related to numerous failures in the system. Therefore, it can be concluded that the results obtained from this case study indicated that human performance contributed essentially to increasing risks in analysed operating events (Bergh et al., 2014). Human failures to correct known problems have been frequently identified along with errors made during design and maintenance activities at commercial nuclear power plants. Thus, the results of this case study demonstrate that multiple errors occurring in operating events contribute to the so-called probabilistic risk assessment (PRA) basic events which are evident in SPAR models (Gertman et al., 2001).

Importance of EIA and HSE-MS

In order to improve practice of the oil and gas industry, the introduction of HSE management systems should take place in line with the integration of Environmental Impact Assessment (EIA). It is essential to clarify that EIA is defined as a process by which a project’s impact on the environment is measured (Department of the Environment, Community and Local Government, 2013). In case the likely effects are identified as unacceptable, professionals in the field are responsible for developing effective mitigation strategies to reduce such a perceived negative impact. Thus, EIA is a crucial tool used in managing the complex interrelations between development and the environment (Rausand, 2013). The examination of the environmental consequences of development actions is done in a structured manner based on multidisciplinary approaches applicable to the global oil and gas industry. The integration of EIA and HSE-MS tools may adequately facilitate the functioning of oil and gas companies. The primary goal of these management tools is to ensure strict compliance with relevant legislations and standards in the field of operation (Bergh et al., 2014). It is of crucial importance that all HSE hazards are identified and handled in a timely manner. Their systemic assessment is a proper step towards ensuring that all criteria for adequate performance have been met.

The integration of these assessments allows for accurate procedures implemented in the context of risk management for oil and gas companies worldwide. For instance, it may be indicated that various development projects that involve the use of radioactive material and nuclear fuel represent serious risks and hazards, which should be extensively assessed through the frameworks of EIA and HSE-MS (Abaza et al., 2004). Global oil and gas companies are held responsible for ensuring that  all dimensions pertaining to human health, environment and security are thoroughly considered prior to the accomplishment of particular projects. Thus, importance is placed on risk assessment and environmental impact assessment of planned activities in the oil and gas industry (Rausand, 2013). As a result, such organisations are committed to improve their internal procedures that play a key role in conducting risk assessment and environmental impact assessment. In this context, a viable measure would be to screen all nuclear safety project proposals to ensure that such assessment procedures are done appropriately. Additional requirements for compliance may be specified by the authorities in particular countries in which oil and gas companies operate (Ash, 2010).

International measures should be constantly improved in relation to the integration of EIA and HSE-MS measures (Zimolong and Elke, 2006). This aspect may lead to extensive support for initiating a co-ordinated international action to demonstrate high-quality environmental impact assessment and risk assessment pertaining to projects developed in the oil and gas industry. An overall risk assessment is fundamental in order to ensure that all development projects are completed in a cost-efficient and secure manner. These aspects should be considered in the process of setting certain priorities in the operation of oil and gas companies (Ramirez et al., 2013). Such thorough assessments may direct efforts to generate necessary funds for the completion of more urgent tasks in the industry.

Conclusion

In conclusion, this paper provided a relevant exploration of process safety management in the global oil and gas industry. Specific arguments have been introduced in order to emphasise the important role of HSE-MS tools, which combined with EIA, may contribute to greater efficiency and safety of work practices in oil and gas companies around the world (Rausand, 2013). The paper focuses on discussing the effectiveness of HSE management systems. In addition, human failure contribution was analysed as related to process risk evident at operating events in commercial nuclear power plants. Another aspect outlined in the report included the integration of EIA and HSE-MS tools that may lead to better recognition and maintenance of risks identified in the oil and gas industry (Bergh et al., 2014). In conclusion, providing accurate assessments is associated with the delivery of positive outcomes in this industry.

References

Abaza, H., Bisset, R. and Sadler, B. (2004). ‘Environmental Impact Assessment and Strategic Environmental Assessment: Towards an Integrated Approach’. UNEP [online]. Available at: http://www.unep.ch/etu/publications/textONUbr.pdf [Accessed on: 28 Nov. 2014].

Ash, J. (2010). ‘New Nuclear Energy, Risk, and Justice: Regulatory Strategies for an Era of Limited Trust’. Politics & Policy, vol. 38(2): 255-284.

Bergh, L. I., Hinna, S. and Leka, S. (2014). ‘Sustainable Business Practice in a Norwegian Oil and Gas Company’. Contemporary Occupational Health Psychology: Global Perspectives on Research and Practice, vol. 3: 198-217.

Department of the Environment, Community and Local Government (2013). Guidelines for Planning Authorities and An Bord Pleanala on Carrying out Environmental Impact Assessment [online]. Available at: http://www.environ.ie/en/Publications/DevelopmentandHousing/Planning/FileDownLoad,32720,en.pdf [Accessed on: 28 Nov. 2014].

Gertman, D. I., Hallbert, B. P., Parrish, M. W., Sattision, M. B., Brownson, D. and Tortorelli, J. P. (2001). ‘Review of Findings for Human Error Contribution to Risk in Operating Events’. NUREG [online]. Available at: http://www.nrc.gov/reading-rm/doc-collections/nuregs/contract/cr6753/cr6753.pdf [Accessed on: 28 Nov. 2014].

Haight, J. M. (2013). ‘Process Safety Regulations around the World’. Handbook of Loss Prevention Engineering, vol. 1&2: 463-499.

International Association of Drilling Contractors (2014). IADC HSE Case Guidelines [online]. Available at: http://www.iadc.org/iadc-hse-case-guidelines/ [Accessed on: 28 Nov. 2014].

Ovind, A. K. and Sneve, M. (2004). ‘Environmental Impact Assessment and Risk Assessment in Northwestern Russia-from a Norwegian Perspective’. IAEA Organisation [online]. Available at: http://www.iaea.org/OurWork/ST/NE/NEFW/CEG/documents/ws032004_Ovind.pdf [Accessed on: 28 Nov. 2014].

Ramirez, P. A., Utne, I. B. and Haskins, C. (2013). ‘Application of Systems Engineering to Integrate Ageing Management into Maintenance Management of Oil and Gas Facilities’. Systems Engineering, vol. 16(3): 329-345.

Rausand, M. (2013). Risk Assessment: Theory, Methods, and Applications. New York: Wiley.

Zimolong, B. M. and Elke, G. (2006). ‘Occupational Health and Safety Management’. Handbook of Human Factors and Ergonomics: 671-707.

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