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The Reality of Risk

05th December 2017

Four experts give their views on processing safety risks. Mike Neill, president, Pyrotechnics USA, Jeff Thomas Sr process safety and reliability engineer, Process Improvement Institute, Kelly Keim, a retired chief process safety engineer, and Greg Cline, principal market analyst, Aberdeen Group

Unavoidably, process safety risks are often managed in different parts of an organisation. Bringing them all together in a consolidated way, to view their impact on the operational reality of hydrocarbon asset or plant is a real challenge. Oil and Gas Technology spoke to four experts - Mike Neill, president, Pyrotechnics USA, Jeff Thomas Sr process safety and reliability engineer, Process Improvement Institute, Kelly Keim, a retired chief process safety engineer, and Greg Cline, principal market analyst, Aberdeen Group – to get their views on the subject.

What the industry needs is to make sure everyone assesses risk using the same criteria – and has a practical understanding of how their decisions directly or indirectly influence the risk picture, and ultimately, process safety performance. By making process safety more operational, that is ensuring front line personnel are aware of their roles and responsibilities, and are effectively and consistently implementing processes and procedures, we can reduce incidents and improve sustainable production.

What is today’s reality of risk in the hydrocarbon sector? In this roundtable, senior industry executives discuss what happens when process safety intent meets the reality of operations. This includes how we think we manage risk, how we actually manage it, and how we can improve it practically and tangibly.


Industry regulation is at an all-time high. Every operator is committed to safety and risk avoidance. So why do you think incidents and accidents still happen?

Jeff Thomas Sr (JT): There are a number of reasons why accidents still happen. First, not all countries have process safety regulations. Second, even where good, detailed regulations exist, it’s hard to implement all the processes and procedures they require 100 per cent correctly, all the time. There are often conflicting priorities, particularly in the field, between safety, production, and cost. In addition, there are often not thorough operating and maintenance procedures that cover all modes of operations, such as start-up, shutdown and other infrequent tasks. In some cases, companies in countries without regulations have implemented excellent PSM programmes - so adding regulations may not always be the answer.

Greg Cline (GC): Incidents and accidents depend on many things, including the regulatory environment and the overall level of safety awareness. And often it’s just human nature. People try to prepare and create a culture of safety, but slip-ups happen.

Mike Neill (MN): I’d say most people in the industry think, ‘I could almost guarantee we will have an accident,’ rather than, ‘I can guarantee that we won’t.’ But they don’t know when, and they don’t know how big. And the chances are if you’re a big organisation with a lot of operations, you pretty much know eventually something will happen.

Kelly Keim (KK): The good news is the American Petroleum Institute (API), American Fuel and Petrochemical Manufacturers (AFPM) and the American Chemistry Council (ACC) collect information on causes and causal factors on a consistent basis. They’re beginning to get a much clearer picture of process safety related issues. Traditionally, the industry looked at facility causes – equipment failure, corrosion, etc. and those are still big factors. But the greatest proportion of incidents, based on industry evidence, is related to human performance, which is people failing to execute a procedure properly, or missing an operating step.


Is there a gap between what process safety KPIs and operational management systems are telling us and the feeling on the front line?

MN: I think there are. I’ve heard anecdotally from operators the KPIs say one thing and the reality on the plant is another.

JT: A lot of people are still trying to figure out the process safety indicators they should focus on. We’ve only had API standards in place for less than ten years. There’s also probably a communication gap between field and office personnel, engineers, and management who set up process safety indicators and processes. Generally, these indicators are not clearly communicated at an operator level in terms of what they are and their importance. I’m not sure actions are taken as a result of the process safety related data and the KPIs produced. One important KPI mentioned in the Centre of Chemical Process safety (CCPS) book on incident investigation is near miss data. It is critical to report both incidents and near misses, and periodically analyse them to determine causal factors and root causes in order to prevent future incidents.

KK: I don’t think we do a great job on KPIs. I know very few sites that make a big deal of reporting their process safety performance to operations. They also don’t publicise their safety-critical equipment performance and inspections. And so, if operations aren’t aware, performance starts to slip.

GC: There’s always a gap, and there shouldn’t be. We need to put capabilities in place to minimise gaps and ensure metrics are available enterprise-wide. Also, it’s important that peoples’ perception of certain metrics match the reality of operations.

MN: Major accidents are by definition low frequency but high consequence. If something happens, you can’t really make a judgement on whether there is a trend, or whether you’re particularly vulnerable. Some people try and extrapolate near misses and look at other performance indicators, but a lot of KPIs are based on how well an organisation implements safety processes.

KK: Evaluating risk is always somewhat subjective. And for the most part, companies have not been terribly transparent in the information they use for monitoring process safety risk. Most people can point to their numbers for personnel injuries and behavioural safety observations – but catastrophic events are rare, so they aren’t front of mind, even if the risk is always there.


Does the reality of risk management measure up to the intent of risk management?

JT: I’d say most companies probably recognise their process safety performance is not where they want it. But overall, we’re doing a better job today of understanding risk than we did, when I started, say, 30 to 40 years ago.

MN: People are experienced enough to know that hazardous industries mean risky business. I don’t think people would publicly admit that risk is so unpredictable. But other industries, nuclear and airline, have managed to eliminate some sources of unpredictable risk. These sectors put a lot of emphasis on training, stop work authority and redundancies in design so that if a system fails, there’s another that would take over. In the process industries, we’ve become somewhat normalised to risk, and we don’t come anywhere close to investing the same level of risk management resources. But there is a lot to gain from investing in safety. Typically, with safety comes improved operational performance.

KK: Actually, I do think there’s an undue confidence at both the executive and field levels that ‘those things just don’t happen to us’. There isn’t that everyday sense of caution that should be present in people who are one procedure away from a major catastrophic event. Most plant workers and managers have never experienced a major process safety event, so they believe it won’t happen to them. We know that’s not true.

GC: Real safety happens on the ground when people internalise it and don’t view it as a burden on everyday business. That means risk exposure must be made visible, prominent and available so everyone can understand its impact on the operational reality.


Do you think the relationship between PSM and operational risk management is close enough?

GC: No! I think PSM is always aspirational, and the relationship between process safety and its impact on front-line operations can be better understood.

JT: There are gaps in most cases. There’s been a lot of work focused on developing PSM systems, improving risk related practices, and developing PSM tools. But there is often a disconnect between what the practices and processes intend and what actually happens at the grassroots operator level. Lots of companies are working on it – but I don’t know any that have a magic bullet.

KK: Operators don’t get a good picture of how change affects risk management or the aspects of the job where they are the critical factor in managing risk.


Who is responsible for managing risk?

JT: Everyone, from the CEO, all the way to an operator, mechanic, engineer, supervisor – all levels of management and workers. Everyone has a key and different role to play, but risk management should permeate throughout the organisation.

MN: Yes, ultimately it lands at the top of the tree. Executives must make sure the right people are involved in the right processes and they do the right things. But I would say operations are in control of the plan. They are at the sharp end, so they should be satisfied personally that the risk level is acceptable. That said, where there are multiple levels of decision-making, it can be confusing when it comes to who owns risk.

GC: In our most recent Aberdeen Group environmental, health and safety study, about a third of respondents have a formal risk management organisation in place. That’s presumably how they establish a framework for risk management. Does it build a risk awareness culture across the organisation? It can. Whether those companies have also got the necessary collaborative approach across business units to make it happen is another question.


What critical process safety information do people who make the daily decisions about operating a plant need?

KK: Consolidation of information is certainly vital to more rational decision-making. The trouble is we don’t provide consolidated systems for operations to effectively assess if they can take one more step in their procedure.

At Deepwater Horizon, for example, roughly 11 layers of protection needed to be in place to prevent the scenario that happened. One-by-one those layers of protection were whittled away. The response was always, ‘well that’s okay because we’ve got this other ultimate layer of protection’.

It shows even a plant with multiple protection layers can experience a major hazard because of an accumulation of relatively harmless decisions. The current process safety barrier status must be visible to operations, the front line, but also management so appropriate decisions can be made.

GC: I think building a culture with the right tools, right attitudes and right training can enhance the awareness of process safety barriers by making them part of the standard operating procedures of front line leaders and workers.

MN: I think that there is still a lack of information available. And the further down the chain you go, the more abstract some of that information is. I’m not sure people really understand risk and what it means to them. And that can put them in a vulnerable position to be exposed to risk they don’t understand. If they did understand it, I think some of their decisions might be different. I think that’s the industry’s challenge. We need to give the front line the ability to be better informed about the possible consequences of their actions – even when making minor decisions.


What are the current obstacles to access this information in a timely manner and how can they be eliminated?

JT: There are a few. First, we have so much data, particularly with things like digital process control systems (DCS), safety instrumented systems (SIS), maintenance systems, etc. We get information overload, and it’s not always clear what’s most important. Second, there can be a lag in the data. We don’t always get it when we need it - and things can be missed. Third, maintenance management and process control systems don’t always make it easy to extract data. And that’s just the start!

GC: The Industrial Internet of Things (IIoT) is enabling a new era where we have the capability to monitor and improve processes to ensure they’re safe. Safety must be implicit. I think, to the extent that operators can connect operations with the information needed, via IIoT or another framework, they can overcome risk and help prevent incidents.

MN: We need to connect the data we have. We also need ways of assessing the impact of doing something or – equally important – NOT doing something. But individuals also need multiple viewpoints – from maintenance and asset integrity to drilling and subsea. That’s the source of informed decision-making, using technology to put everyone in a much better position.

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