Simplified Approach for Making Risk Decisions in a Fast Paced Business Environment

For facilities where hazardous events of high consequences could happen, quantitative risk analysis is needed to determine whether the risk is tolerable against risk criteria of the operating company or that in local regulation, also specific risk reduction measures need to be defined and evaluated based on the QRA results. The analysis needs a lot of time and sufficient information in process, equipment, operation methods, weather, geographic condition, population etc. to evaluate both consequence and frequency, while business management in some cases would expect prompt decision in a fast-paced business environment, which requires the risk analysis be done as quick as possible while still provides sufficient information for business decision, some typical situations as below,

1. For merge & acquisition activities, business team want to know what the significant risk concerns are, i.e. showstoppers and what are the estimated cost of investment on risk reduction measures with sufficient accuracy. Quite often it is challenging to get the process/facility information in detail during Due Diligence activities.

2. Local jurisdiction authority sometimes may propose retrofit requirements for existing plants, e.g. after major incident happened in the industry, delay of responses may impact the permit to operation. Need to promptly show the consequence or risk analysis to authority that clearly supports whether retrofit is necessary or not.

3. To reduce specific risk of a large fleet of existing facilities, risk ranking is required to determine the priority in the company wide retrofit plan and the cost needs to be timely planned in the budget.

Several case studies are presented in the paper to show the simplified analysis approach taken, including how the analysis scope and methods are selected to address the key risk concerns, the risk reduction actions decided per the analysis and verification of the effectiveness of these actions. These cases cover different scales of facilities handling various hazardous materials such as ethylene oxide; liquid oxygen; syngas from coal gasification unit which contains hydrogen, carbon monoxide and hydrogen sulfide.

Some suggestions are derived from these case studies,

1. Focus on consequence analysis when there is uncertainty or insufficient information of inputs for the event frequency, this helps to identify the scenarios have highest impacts to risk. Consequence screening also can determine whether any further risk evaluation is needed.

2. Proper input to consequence analysis is critical to estimate the consequence, especially for those inputs has significant impact on the results.

3. Identify and focus on the actions that can significantly reduce consequence and verify the effectiveness.

4. For benchmarking risk of a large fleet of similar facilities, choose the loss of containment scenario with the balance of consequence and likelihood level, assume the frequency of the scenario is similar or same across the fleet, while some inputs of consequence analysis sensitive to results are set differently based on site condition, thus the consequence levels may approximately represent the risk levels between these facilities.