(31c) Benefits of Planning for Black Swan Events for Process Safety Management

Companies should include consideration of very low probability and high consequence events (“Black Swan Events”) to improve readiness and performance of the process safety management system. Black Swan Events are characterized by their extreme rarity, and potentially their challenging severe impacts. The term is based on an ancient saying that presumed black swans did not exist – but when discovered this surprise destroyed the long-standing norm that it was impossible. A Black Swan Event is an event that is beyond what is normally believed likely to occur because it involves a highly unusual or near impossible set of events or is against known assumptions.

During activities for PSM these sorts of events are often discounted as not credible, which may lead the company to a false sense of safety. Are they really so rare that they should have been dismissed? Considering these events may lead to knowledge of gaps that support that a larger event than was believed possible was, in fact, credible.

Such events, considered extreme outliers, collectively play vastly larger roles than regular occurrences and so have many benefits regardless of their expected likelihood over the life of the operation. These scenarios potentially have more severe consequences than was considered in the design and operating plans of the operation. Prior to the event there is often little effort to understand or plan for such events and afterwards there is an opinion it was an obvious gap that should have been considered. Examples include compound incidents and other highly disruptive and sudden events. Others may include cascading events, domino effects, or larger releases than were considered in the typical process hazards analysis studies.

PSM has a known responsibility for Emergency Management as a management system element. It is Element 9 of the CCPS Risk Based Process Safety model management system. Too often the focus of this effort has been on ‘manageable’ catastrophic accidental events rather than more large-scale, highly challenging events caused by multiple barrier failures and then outside the control of the company. They may be seen as improbable or outside the scope of the process safety management system design basis or simply in the purview of crisis management, which may be the responsibility of different individuals in the corporation. Emergency planning efforts for PSM rarely considers such substantial events, and normally focuses on more common events that are manageable.

Impacts from Black Swan events may include process safety considerations and operational impacts such as:

• -damage or injury well beyond the expected outcome of a sequence of events where barriers were assumed to be adequate.
• -unusual operational conditions or upsets leading to loss of primary containment.
• -logistics and interdependency complications, including supply chain impacts.
• -mass casualties and multiple simultaneous challenges.
• -lack of preparedness to properly manage high-level emergencies due to inattention to the needs of managing complexities of a large-scale event.
• -overconfidence that the public fire responders or government assistance will be highly effective.
• -failure to consider internal resources required for business continuity.

Facing the worst impacts of low probability, high consequence events is a healthy exercise in that it tests the readiness of the emergency management and supply chain systems more thoroughly than is normally the case. Overconfidence in the integrity and reliability of barriers or emergency management capabilities may be a source of this line of thinking. A sense of vulnerability is needed to promote the right culture of PSM readiness.

All of these possible impacts must be considered in advance as well as during the developing situation. The emergency and crisis management planning cycle offers a valid model for understanding this situation and risk assessment focused on such events is critical to understand and appreciate the consequences and likely impacts.

In the Planning phase, a risk assessment examining the potential for such Black Swan events should be considered. The immediate and possible long-term impacts should be examined, and gaps identified in preparedness.

The Organize and Equip phase should focus primarily on technical and management systems that must be implemented that are essential to maintain a safe workplace and effective process safety management performance during the event and following. A clearly defined process for focusing on the underlying PSM issues is necessary to facilitate the management system to be effective and to have successful performance.

Training is essential to ensure readiness for the event. Exercises are ways to provide real time feedback on the degree of readiness and tabletop drills and field exercises for Black Swan events are recommended. The final step in the planning cycle is to Evaluate and Improve based on experience, additional knowledge, benchmarking, audits, drills and exercises, and further learnings.

AcuTech believes a focus on certain Black Swan Events will prove to be an invaluable means of achieving excellence in PSM. Overconfidence in the ability to manage the worst credible outcomes from the process may be detrimental to the health of the organization.