Jan-2010

Achieving excellence in process safety management

The management of major accident hazards in refineries must recognise that all areas of the business have vital roles to play to ensure process safety management

Graham Bennett
DNV Energy

Article Summary

While tremendous progress has been made with occupational safety and environmental emissions, the hydrocarbon processing industry has not yet managed to reduce the occurrence of major accidents. Solving this requires a clearer understanding of the potential root causes and identification of the most effective route to managing the risks of major incidents.

Today, perhaps more than ever, the industry finds itself the subject of a wide range of legislative requirements and under increasing scrutiny from society at large. Much of the legislative burden and adverse publicity have come about as a result of a series of well-publicised accidents that have occurred in both the refining and chemicals sector, and the recent high-profile investigations into the culture of this industry that have followed.3 This article examines some of the underlying trends relating to those accidents, identifies lessons to be learnt, challenges some existing paradigms and, through case studies, identifies opportunities for the future.

Persistent challenge of major accidents
Over the past 10 to 15 years, the downstream process industries around the world have made tremendous improvements in the areas of occupational (personal) safety and environmental emissions. Standard industry measures such as Lost Time Injury (LTI) or Recordable Accident Rate (RAR) all show dramatic reductions in incident rates, with industry leaders in the US and Europe showing reductions of 50–75% in reported rates. Figure 1 shows how the industry has improved its performance in Total Recordable Injuries over the past 15 years. The low levels of recordable LTIs and the need for a more significant measure to monitor trends have led many companies to start using Medical Treatment Case (MTC) as an indicator of how well they are performing in managing occupational risks. The industry quite rightly deserves to be congratulated for its achievements in this respect.

When examining major accident events over the same period, however, a very different picture emerges. Unfortunately, the industry has continued to experience large-scale, process-related accidents, resulting in fires, explosions or releases of toxic or ecotoxic materials. An analysis of refinery losses conducted by DNV1 reviewed more than 400 refinery accidents over a 40-year period and showed a trend of rising losses over the period (with all values normalised to year 2000 values and to refining capacity in terms of number of barrels processed).
Figure 2 is derived from this work and shows how the refining industry has performed in terms of its annual losses arising from major accidents. Note that the data used for the graph do not yet include the final costs of incidents such as Texas City or Buncefield. The graph takes into account the frequency of events, their associated costs and the change in refinery capacity over the same period. Losses are expressed in terms of dollars per thousand barrels of distillation capacity. Some very costly single accidents tend to obscure the picture, so a five-year moving average plot has been added to the graph to indicate the trend. A linear fit to the annual cost data on the graph also shows a rise over the period. The data analysed in the report also indicate that for every major release event resulting in asset damage, there are several events that resulted in lost production opportunities or significant plant downtime that are not included in the insured loss figures of the 
graph. In the past three years alone, total losses from refinery and petrochemical incidents around the world have exceeded $2 billion. Many of these incidents did not involve fatalities or even serious injuries, but did result in significant production losses and asset damage. A review by the UK Health and Safety Executive (HSE) of accidents in the UK2 gives examples of cases where the costs of business interruption are more than twice the costs associated with asset damage. This review also found that 17 of the 20 highest financial loss cases in the UK resulted in no fatalities. This does not, of course, suggest that we should be complacent about fatality risks. It just serves to remind us how the use of injury/fatality statistics alone can disguise underlying trends in incident rates and costs.

Understanding cause-and-effect relationships
Much effort has been expended in identifying, recording and investi-gating “smaller” events such as those that result in damage to property only or are sometimes called “near miss” events that cause no loss, but only through providence. The theory is that these smaller events are the precursors to the major accident hazards that industry is aiming to eliminate. While this theory is accurate for occupational events, the level of understanding of the cause-and-effect relationships in major hazard events has largely been insufficient to change the number or scale of major accident events in recent times. In fact, despite the intense focus on safety in the process industry over many years, the number of major 
accidents continues to be significant. In 2005, DNV set up a database to track and record accidents and incidents in the process industry. Since its inception, more than 1800 incidents have been recorded and these are summarised in Table 1.

Considering that there are around 600 operational oil refineries worldwide, these data suggest a major loss of containment occurring on average once every three years, and a major fire occurring once every five years at each facility. The hypothesis driving efforts for improvement over many years has been the concept of a predictable ratio of incident outcome severities often referred to as an “accident pyramid”. Figure 3 shows a standard accident pyramid. Conventional wisdom has suggested that, by acting to shrink the base of the pyramid, the values at the apex will also decrease in proportion, as illustrated in Figure 4. Unfortu-nately, a lack of understanding of the different mechanisms that contribute to both low consequence and major accident events has resulted in a reality more closely represented by Figure 5. Focus on occupational safety has reduced the incidence of smaller events, but major accidents, driven by short-comings in process safety, remain.

Managing process safety requires a different approach
The Centre for Chemical Process Safety (CCPS)4 defines Process Safety Management (PSM) as: “The application of management principles and systems to the identification, understanding and control of process hazards in order to prevent process related injuries and incidents.” A more concise definition could be: “Keeping the process fluids inside the piping and equipment.” Managing process safety is significantly different from, and more difficult than, managing occupational safety. The relationship between likelihood and consequence is very different, as illustrated in Figure 6. PSM is more problematic than managing occupational safety for a number of reasons: