The Risk Management Tool Box Blog

Managing Risk in Older Facilities

Graham Marshall - Tuesday, July 03, 2012

In older and ageing facilities, the performance capacity of safety-critical equipment will degrade over time as a result of many time-related and usage factors. These factors could include:

•  Simple degradation by corrosion, erosion, impact, vibration, and metal fatigue;

•  One-off damage-causing events such as incompatible mixing of chemicals within a process system;

•  Changes to design-intent or operating parameters - for example, changes to operating pressures, operating temperatures or changes in chemical composition; and

•  Physical changes in configuration of the design, such as addition or removal of modules or wells.

Operators’ of process facilities need a constant focus on their systems and processes in order to assess effectiveness in managing the risk imposed by the types of issues outlined above.

The focus of effort in aging facilities should include:

•  The application of new knowledge (e.g., new codes of practice and new standards);

•  The inspection and maintenance regime;

•  The risk assessment program of HazIDs, HazOps and other applicable tools; and

•  The involvement of senior management in critical decision-making.

While older facilities may not be able to to meet fully all current codes and standards, Operators of such facilities should know and understand emerging safety-related improvements and, where reasonably practicable, adopt new codes and standards.

The key issue for aging facilities continues to be the need to take practical steps to ensure that risk is reduced to a level that is as low as reasonably practicable (ALARP).

ALARP and Risk Management Planning

Graham Marshall - Sunday, May 20, 2012

In developing any HSE Risk Management Plan (RMP), the organization must show that there are reasonable grounds for believing that the RMP demonstrates that the  risk associated with the business venture is being reduced to "as low as reasonably practicable" (ALARP).

So ALARP is a very powerful concept because it allows - and demands - outcomes that are reasonable under the given circumstances.

For that reason, the principle of ALARP has long been applied in the oil patch.  So what does ALARP mean?

The legal definition for ALARP was defined in an English courtroom in 1949.

In a legal case heard by Lord Justice Asquith (Edwards v National Coal Board, 1949), Asquith said:

Reasonably practicable is a narrower term than ‘physically possible’ and seems to me to imply that a computation must be made by the owner, in which the quantum of risk is placed on one scale and the sacrifice involved in the measures necessary for averting the risk (whether in money, time or trouble) is placed in the other; and that if it be shown that there is a gross disproportion between them — the risk being insignificant in relation to the sacrifice — the defendants discharge the onus on them.” 

Using that definition, any Risk Management Plan must demonstrate that any additional "costs" (time, money, resources, etc) that are required to reduce the risk of the business venture further would be grossly disproportionate to the risk reduction being made.

So the ALARP test is for organizations to demonstrate in their RMPs that the options chosen to reduce risks are those which are reasonably practicable.

Conversely, they may need to demonstrate that other options - which may be "physically possible" - but which have not been selected are not reasonably practicable.

When planning any oil field activity, organizations should ask themselves:

“Can we reasonably be expected to implement a better risk management option than the one we've chosen?”

If the answer to that question is "yes"; then your business is almost certainly NOT at the ALARP level. 


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