A Word Cass Approach to Process Safety Management (PSM) after the Texas City Disaster Dr E. Pape DNV Energy, UK There are many major faciities, such as Texas City which are aging with many egacy issues (e.g. atmospheric venting bowdown drums). These were buit to conform to the industry practices of their day. Such faciities can be run safey provided more attention is focused on process safety than woud be necessary in more modern faciities. Such sites need some guidance as to what operationa safety programs they need to impement and monitor through ife for their specific designs and safety chaenges. Operationa exceence benchmarking can be dangerous if this eads to under management of safety issues because peers operate safey with ess. The Baker and the Chemica Safety Board Reports foowing the Texas City Disaster have aready had ramifications across the word. The major oi companies have each taken the report seriousy and in their severa ways are taking appropriate action. Many operators are creating a arge program around Contro of Operations and why many are so keen on the barrier approach. DNV have compared the different industry approaches to Process Safety Management and have drawn some key essons on the vita components to an effective system. These form a baance between the management of risk and the maintenance of effective barriers with the optimisation of performance. A robust systems have a component of measured improvement and DNV is providing just such a service to main payers across the word with its isrs7 PSM assessments. This paper wi concude with some trends that are starting to emerge in the area of PSM which wi dictate the Operators activities over the next decade. Content The three areas of focus, investment, process optimisation and process safety management Refining Investment pattern-growth Optimising Performance The diemma between decining frequency of occupationa heath events and reguar osses through process events The Baker and CSB reports Trends from the main operators comparing the approach between refining and offshore approaches What can we do to create a robust Process Safety Management approach Measured Improvement one approach by DNV
1. Introduction The refinery industry is making good margins today and we are seeing performance enhancement projects, expansion of existing refineries and new buids across the word. Loss statistics show an expensive diemma over the ast decade for the industry. Whie the frequency of occupationa injuries and i heath have decined from around 2.5 to 1 per 200000 hours per year the trend of incident costs have risen from $200 to $300 miion over the same period. Such events often mean a financia disaster as we as a physica event, that significanty affect the Profit & Loss Account and in extreme cases they can herad ruin. The industry is feeing significant infuences, the high oi prices, perceived shortage of capacity, increased demand for ow suphur fues and the events at Texas City a of which have coincided to produce a decade of change. The continuing high oi price, currenty $76 per barre for Light Sweet Crude, combined with an increasing demand for environmentay friendy fues has created some new refining trends. Three areas emerge 1. Investments, new buids and mergers 2. Production Optimisation getting more from what you have 3. Minimising osses by preventing major accidents, currenty drawing on the earning s from Texas City and others 2. Current Investment Deveopments For the ast ten years we have seen mergers of the majors with the assets of Aramco, Ef, Fina, Mobi and others a being integrated into arger owners. This trend has continued and three typica deveopments iustrate the investment eves that are in pay in the ast few years: OMV s purchase of the Romania s oi industry Petrom (some 40,000 empoyees) to create the argest centra European refining group Kuwait Nationa Petroeum Company s panned construction of a 615k bpd refinery at A Zour and consequent reaignment of their existing 3 refineries Saudi Aramco s pans for severa word scae refining and petrochemicas faciities DNV beieves that simiar patterns of investment wi continue for the next decade. This wi accommodate the changing demand pattern for fossi fues to optimise our carbon footprint. However this is the subject for a different paper. 3. Optimising Performance Some Difficut Questions In parae with investment pattern, asset owners want more margin from their current faciities. In times of high refining margins, maximising throughput and minimising downtime is critica. They are doing this by attempting to optimising performance. The operators are however faced with some difficut questions: Wi we achieve target performance of 96% on-stream factor/avaiabiity? What is the optimum intermediate storage to protect against feed unit unavaiabiity? Do we have too much? 2
Do I have enough suphur recovery capacity and redundancy? Do I have a reiabe hydrogen suppy? What is the impact of 1% increase in hydrotreater unit avaiabiity? What is the impact from crude import ogistics issues (berthing, demurrage, storage)?; wi there be feed shortfas? The chaenge is how to reduce the production osses: Design Capacity 100% 150,000 bbs/day Pant Utiization 85% 127,500 bbs/day Scope for improvement Production osses Unique understanding of interaction of: Reiabiity Overcapacity Storage Operationa fexibiity We at DNV are heping a range of Refineries address these issues through the active use of our TARO Pant Simuation modes. TARO modes such areas as process fows, current design enveopes, the equipment, units and their inter dependabiity, the storage voumes (for Feed, intermediate and product storage), the operations, maintenance and storage history, the refinery sate and materia baance, the market forecast and demand profie. TARO runs a series of simuations to estabish the sensitivity of pant utiisation to a range of operationa changes or investment strategies. The TARO mode then provides Production Efficiency for the panned product streams Unit Criticaity anaysis and Unit Utiisation Storage Utiisation Production Improvement Opportunities Detaied forecasts for project and pant economics In summary where to focus to achieve the cients objectives 3
Simuation of Rea Word Improved Strategies Rea Word Refinery Asset TARO Pant Simuation Mode Current Performance Future Performance Probabiity Poor Mean Poor Consistency Improved Performance Safey & Responsiby Probabiity Improved Mean Good Consistency Production (%) Production (%) Refineries across the word are addressing these issues and benefiting accordingy. Here is a typica resut: Scenario Proposed Design Optimised Design Gasoine Production Efficiency 88.30% 89.20% 6.0% 5.0% 5.9% 5.1% Gasoine Inefficiencies Comparison Current Configuration Proposed Configuration 4.0% 4.1% 3.5% 3.0% 2.0% 1.0% 0.0% Losses caused by schedued events Losses caused by process unit faiures 0.9% 0.7% Losses caused by impact of Suphur units 0.5% 0.5% Losses caused by Utiities Faiures 0.2% 1.0% Losses caused by Hydrogen shortfas 4
This is how She Canada described the benefits reaized from the refinery performance anaysis: Having the abiity to anayze and study the affect that pant capacity, reiabiity, and refinery tankage have on overa refinery production. We are abe to anayze the tradeoffs between intermediate tankage and pant reiabiity for exampe. Heping us to quantify, vaidate, and rank and/or add to the initia focus areas. Up to now, the focus areas were identified and prioritized based on our coective knowedge and intuition, but we have no abiity to anayticay rank them other than by intuition and knowedge of historic gaps. Having the abiity to distinguish critica equipment Worst Actors by unit, system, or asset type versus their contribution towards gap cosure as worst actors are corrected. Having insight into the reationship between production and Soomon Utiization, what features contribute significanty to both and through what mechanism. This subject deserves a more thorough coverage than can be achieved here and I refer interested readers to the referenced papers. 4. Improving Process Safety Performance The third area that refiners are focussing on is to minimise the unpanned events. These range from production upsets, through minor osses of containment to the significant event that can destroy the annua finances and damage your corporate reputation. Pants buit in the 1970 s or earier wi be faced with aging aspects and egacy hardware no onger used in the industry especiay items which are prone to oss of containment such as any system that vents to the atmosphere in a process area. Aging assets require more Process Safety care than current designs to provide a comparabe safety performance. Athough the media focuses on the major events, the financia damage of a series of minor events shoud not be ignored these have been known to mount up to economic significance, severa hundred miion Euros over a three year period was compied by one major refiner. Headine grabbing events occur with depressing reguarity indicating that a east some of the essons from previous events have been ignored. There are four reasons why the industry shoud suffer such repeated events: The recommendations from a previous event has not addressed the fundamenta issue The recommendation has not been transposed into engineering barriers, rues or sound operating procedures by the operating company concerned The rues have been ignored, the procedures have been set aside or the physica barriers have been aowed to decay by the site. This may have been precipitated by restriction on investment or inappropriate financia aocation controed from above. Leadership attention to process safety is acking 5
This brings us to the current diemma in the process industry. Since the ate 1980 s the industry has focussed on HSE Management Systems and major advances have been made. Many companies have achieved a three times improvement, over 10 years even starting from a good initia performance, e.g. Conoco: Incidents per 200,000 work hours 6 5 4 3 2 1 API BP (pre '99 scaed recordabes) Dow Conoco DuPont (consistent dataset) Tota Recordabe Injuries and Inesses ExxonMobi Phiips Bayer She ChevronTexaco 0 1991 1993 1995 1997 1999 2001 2003 Most majors have depoyed three approaches to achieve this resut: Improving forma safety management systems Depoying risk assessment programs Most recenty depoying safe behaviour programs 6
However, by contrast the trends in refinery materia damage costs have not shown a decine curve, they have actuay grown during this period. Considering the incident costs $ per 1000 bbs refinery capacity corrected to 2000 prices we see a progressive increase: Damage $/1000 bb refinery production at 2000 prices 30.00 25.00 20.00 15.00 10.00 5.00 Raw data 5-year average Linear (5-year average) 0.00 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 Most companies recognise the Bird triange of osses and have been working on the HSE areas to reduce osses. However there is a parae triange reated to outstanding work orders refecting the PSM issues and aways in the background stands the spectre of a major event. 7
5. Texas City 2005 This was the argest accident to have occurred in the US in 20 years. It represented a wakeup ca to the refining industry, suggesting that major assets are not competey protected by current safety methods and investment strategies. The Baker Pane has done an exceent job assessing safety management system and cuture issues in BP s US refining operations. The CSB investigation has aso now been reeased. So what can the industry earn? Michae Broadribb, BP s Lead Investigator, pointed out that at Texas City there were tweve ayers of protection that coud have prevented the event, each one faied. The pre-event faied contros incuded: Management Contro Reated Effective Supervision and Leadership Work Contro Learning from Previous Events Communications Training and Competence Adherence to approved operationa procedures Audits and Sef Reguation Asset Integrity Inherent ayout/design of the fare system Reief and Bow down System Process Contro, aarms and Shutdown System Maintenance and Inspection Management of Engineering Change 8
However there were post event faiures too. These incuded the Fire Protection Systems (Passive and Active), Escape and Access Routes and the Rescue and Recovery Arrangements. These facts were aso refected by Baker who can be summarised as having concerns about: Corporate Safety Cuture Process safety eadership and management decisions for process safety Resources and positioning of process safety capabiities Empoyee empowerment and process safety cutures at BP s U.S. refineries Process Safety Management Systems Process risk assessment and anaysis Compiance with interna process safety standards and externa good engineering practices Process safety knowedge and competence Effectiveness of BP s corporate process safety management system Performance Evauation, Corrective Action, and Corporate Oversight Measuring process safety performance Process incident and near miss investigation Process safety audits Timey correction of identified process safety deficiencies Corporate oversight 6. The Process Industry foowing Texas City Many companies are refecting on the Texas City event and considering whether these faiures coud equay describe some of their own operations: DNV are seeing the Majors reinforcing the depoyment of sizeabe asset review teams to each of their downstream operations in turn. In a number of cases, we are supporting these review activities. These teams test the robustness of their PSM phiosophy, provide a structured verification of barriers and actions and deveop suitabe improvement programmes. These teams are spending between 12 and 45 man weeks on each site and so represent a significant investment in situation anaysis. Most are using a Maturity Mode Approach. She, BG, BP, C-P and parts of Tota a undertake forma bi annua Asset Integrity reviews, reporting corporatey. This focus on anaysis is ikey to uncover significant requirements for additiona investment. 9
Severa Majors are investing in enhancing PSM knowedge. They are running a series of Process Safety Management Workshops to ensure that the fundamentas of PSM are understood by sufficient of the operationa staff to effectivey ead their peers. Some companies are now forming/reinforcing PSM knowedge circes/experience exchange cinics to ensure best practise is shared across their group. DNV knows of two majors who are re-examining their performance metrics to create a better refection of inherent risk, overa pant condition (through a coection of agging PSM indicators) and the status of critica contros (through a seective coection of eading PSM indicators). 7. What has worked for Major Accidents DNV beieve that major hazards are as amenabe to reduction as occupationa heath provided companies do the necessary work. As described above occupationa heath has had a major improvement in the past 20 years (see Dow Chemica statistics showing a factor of 10 improvement). We know in the North Sea that HSE eak statistics show a 4 fod reduction since 1995 and major accidents amost aways start with a oss of containment. Perhaps this is why many major upstream operators have exported the North Sea soutions across the word with good reason. The North Sea approach has been dramaticay effective with the ast headine grabbing event in the North Sea being Piper Apha in 1988. In UK the safety case approach estabishes performance standards for safety critica eements which are supported by an independent verification regime. In Norway there is a risk based process to demonstrate integrity. For Upstream assets there is more emphasis on Major Accident Contro. They depoy: fu safety management and mechanica integrity system driven by best practice risk assessment detaied hoistic risk assessment, with a consoidated Hazard and Risk Register identification of the most important safety barriers/contros hardware and systems (safety critica eements) and estabishing performance standards for these contros vauing of every contro, and independenty verifying sufficient contros are in pace for the eve of risk and performance standards are achieved deveopment of tracking metrics using recent data and rea-time toos inking incident investigations back to the Hazard and Risk Register and the identified contros that faied We are seeing that Numerica Techniques (QRA) being ony seectivey depoyed with simper Bowtie approaches growing in use and the demand for effective HAZOP/ HAZID growing. 8. What can be done for Refining PSM? DNV is in the centre of much of this activity; we have drawn some fundamentas from our work and produced toos to assist companies evove and demonstrate robust PSM. 10
We beieve that an integrated approach to risk management is essentia to ensure a robust system. The Refinery shoud: Design a sound ayout and estabish a robust operating enveope Understand the hazards at enterprise, site and unit eve Work within the operating enveope and maintain its integrity Understand their critica contros State what they expect them to do Make sure they do it through effective inspection and maintenance Provide effective eadership in PSM, simiar to the successfu focus aready appied to occupationa safety issues Adequatey resource the key functions Measure performance year on year ask and how they can make the situation better 1. Leadership Pant Processes Peope 2. Panning 3. Risk Evauation 4. Human Resources 5. Compiance assurance 6. Project Management 7. Training and Competence 8. Communication and Promotion 9. Risk Contro 10. Asset Management 11. Contractor management and purchasing 12. Emergency Preparedness 13. Learning from events 14. Risk Monitoring 15. Resuts and Review 11
We beieve that a structured approach to managing the various ayers of protection is essentia: DNV have incorporated word best PSM practise into a reference, measurement and deveopment too caed isrs 7 PSM. This has emphasis on: Design Integrity Process Safety Information Management of Change Asset Management Process Hazard Anaysis Operating Procedures Pre-start-up Safety Reviews Managing Proprietary Knowedge Technoogy Deveopment This PSM too has incorporated OSHA 1910, MES, SEVESO, Baker Report and CSB Report from Texas City into the existing isrs 7 Omega too. It uses the same quaity contro criteria, reviews the systems in pace and the resuts they produce. It is supported by assessment guidance to ensure consistency in appication. It can be used in a fexibe way by supporting an integrated business management approach, by deveoping the PSM System or to deveop the HS, E, or Q systems as required. It can focus on one specific area of PSM, Asset Integrity for instance or can deve into particuar issues and deveop the approach. 12
Word majors are aready using isrs 7 in a range of ways. Three are using it as a reference too to deveop their corporate PSM system. Two are using it as a Seective Improvement Too. Three are using it as an Assurance Protoco mapped against the company s MS and two are using it as a fu System Improvement Too and Assurance Protoco. However the PSM performance cannot be assured or evoved through good PSM systems aone. This must be baanced by focussed assessment of the Physica Conditions or barriers. DNV has deveoped a compimentary Physica Conditions Assessment (pant wakdown) that ensures that PSM systems are impemented through actua good management of physica assets. The PCA ooks at typica areas of weakness known to DNV through its work with the industry. Many majors are using the barrier approach to PSM and isrs7 wi ink to this through the fied inspections. Isrs7 s PCA wi be ooking at the status of critica safety barriers, safety defeat ogs, etc and is integrated into scoring of overa assessment specificay focusing on: Bypasses and isoations Contro system overrides Locked Cose/Locked Open/Normay Cose/Normay Open Vaves Pipe, Fanges and Binds MOV/ROV/Excess Fow (Depressurizing) Vave Sma Bore Fittings (<2 ) & Conduit Contro Vaves & Check Vaves Reief Vaves and Rupture Discs Cuverts & Drainage Fied Instrumentation Tankage and Bunds Fired Vesse (Furnace, Incinerator, Main Combustion Chamber, Package Boier, Gas Turbines, etc.) Unfired Pressure Vesse (Coumn, Vesse, Reactor, Heat Exchangers, etc) Rotary Equipment Chemica Storage & Usage Emergency Equipment Eectrica contros DNV beieves in Measured Improvement, and this structured too wi aow cear comparison of the heath of the PSM system through benchmarking. Here is an exampe of a site being compared with a group of peers. The system wi aow comparison with: Past performance Sister companies Market competitors Word cass performers Companies who use the cassic isrs find that it provides a basis for setting short and medium term objectives, caibrates interna measurement activities and sets a cear standard set so performance eves can be easiy recognised and next steps understood. 13
It can be seen from the previous iustration that the approach makes the probem identification activity much cearer. Across a group the variations in performance indicate robustness of PSM impementation which wi aow depoyment of resources and avoid PSM events. Resuts and Review Risk Monitoring Learning from Events Emergency Preparedness Leadership 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Panning Risk Evauation Human Resources Compiance Assurance Contractor Management and Purchasing Project Management Asset Management Training and Competence Risk Contro Communications and Promotion Nucear Power stations are considered by many to have a high societa and instaation risk profie, the consequence of a oss of containment are higher than a refinery. Many UK instaations have used ISRS for the ast decade to identify and manage their risk profie. This is what the Operations Director responsibe for 14 UK stations said about the vaue of this approach: ISRS has given us the chaenge and the recognition to continuay and consistenty improve in a aspects of efficient, safe and environmentay responsibe operation of our sites. It has achieved strong staff participation and enthusiasm by measurabe goas to drive overa site improvement pans. Magnox Eectric Chris Marchese Chief Operations Officer 2006 9. Concusion The industry is going through a period of significant change with tremendous opportunities for performance improvement. High oi prices and a shift in demand pattern are a 14
driving investment whie the spectre of a Texas City in my company is ensuring that companies take their PSM responsibiities seriousy. DNV is working with many major payers to assist in the optimisation of performance in the refinery through its TARO toos. However the work DNV is doing with isrs7 PSM is assisting companies to: Set standards, both corporate and on a site Impement change Assess performance Deveop improvement pans in a transparent way. This wi assist the industry meet the increasing expectations of mutipe stakehoders. Stakehoders wi need Refiners to continuay measure, improve and most of a demonstrate the PSM heath of their business. In short, to ensure that companies maximise the performance of their assets in a safe and sustainabe manner. 15