Process Safety and Loss Management · Alp&Associates/ea. RAM 1-5 Objectives ¾Provide an overview...
Transcript of Process Safety and Loss Management · Alp&Associates/ea. RAM 1-5 Objectives ¾Provide an overview...
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Process Safety and Loss ManagementSession 6
Hazard and Risk Assessment, Frequency and Consequence Analysis Techniques
51st Chemical Engineering ConferenceOctober, 2001
Halifax, Nova Scotia
Chair: Ertugrul Alp, Ph.D., P.Eng.ALP & ASSOCIATES Incorporated87 Topham Crescent, Richmond Hill, Ontario, L4C 9E9, CanadaTel: 905-508-2595, Fax: 905-508-2679E-mail:[email protected], Web Site: www.Alp-Risk.ca
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Topics coveredTopics coveredAlp Alp –– Risk management system and risk assessment techniquesRisk management system and risk assessment techniques
Yugo IvanovichYugo Ivanovich –– Risk management system focusing on SHERisk management system focusing on SHE
Leo Jansen Leo Jansen –– NEB’s NEB’s index method of risk assessmentindex method of risk assessment
Christian Christian Etowa Etowa –– Dow’s index method of risk assessment Dow’s index method of risk assessment ––inherent safetyinherent safety
Mike Morgan Mike Morgan –– Consequence analysis/ learning loopConsequence analysis/ learning loop
Gerry Phillips Gerry Phillips –– CARAT CARAT –– Improving Stakeholder ParticipationImproving Stakeholder Participation
Mark Riley Mark Riley –– Risk control/ engineering Risk control/ engineering –– MonitoringMonitoring
Faisal Khan Faisal Khan –– SWeHI SWeHI –– Index method of risk assessment, Index method of risk assessment, combining Fire/ Explosion and Toxic/ Corrosive hazardscombining Fire/ Explosion and Toxic/ Corrosive hazards
Suggest: keep the units of measurement in B (consequence) Suggest: keep the units of measurement in B (consequence) and A (1/frequency), rather than burying them into an index and A (1/frequency), rather than burying them into an index
Brian Kelly Brian Kelly –– scare with hazardous events, overview of PSM scare with hazardous events, overview of PSM ––risk management focusing on hazardous materials and systemsrisk management focusing on hazardous materials and systems
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Classical Management Process Steps• Vision: Set Policy and Direction• Assess• Plan• Implement• Review
• Risk Avoidance• Risk Transfer• Risk Financing• Risk Control
Risk Management ProcessRisk Management Process
2. System/ Scope Definition:Define Boundaries, Understand
Needs of Stakeholders
4. Risk Control:Examine New/ Different Control Options• Facility “Safety” Management (OHS. PSM,…)• Land Use / Buffer Zones• Incident Management / Emergency Response
Yes
No
Cannot Decide
Need More Information
3b. Risk Acceptability Evaluation:
Do we need to reduce risk?
Learning Loop Continuous Improvement Loop
3a. Risk Analysis:• Hazard Identification (at-risk behaviour
and physical conditions)• Consequence Analysis• Likelihood Analysis• Risk Estimation/ Ranking
6. Learning:Broaden Scope,
Increase Detail to Reduce
Uncertainty
1. Initiation: Identify the Activity to be Managed,Identify the Stakeholders / Risk Receptors
3. Risk Assessment 7. Stakeholder Participation
• Communicate Risks With Stakeholders
• Consider Stakeholder Needs/ Risks/ Costs/ Benefits in Decisions
5a. Plan Implementation of Activity/ New Controls
5c. Review: Monitor Controlled Risks/ Audit Implementation and Performance
5b. ImplementActivity/ New Controls
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Thank you allThank you all
ParticipantsParticipants
SpeakersSpeakers
ModeratorsModerators
Our volunteerOur volunteer
Risk Assessment Techniques for Process Safety and Risk Management
A Short Overview
Presented by Ertugrul Alp, Ph.D., P.Eng.
51st Chemical Engineering ConferenceOctober, 2001
Halifax, Nova Scotia
ALP & ASSOCIATES Incorporated87 Topham Crescent, Richmond Hill, Ontario, L4C 9E9, CanadaTel: 905-508-2595, Fax: 905-508-2679E-mail:[email protected], Web Site: www.Alp-Risk.ca
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ObjectivesObjectives
Provide an overview ofProvide an overview ofrisk conceptsrisk conceptsthe risk management processthe risk management processrisk assessment techniquesrisk assessment techniquesmeasures for representing different types of riskmeasures for representing different types of risk
so that you will gain an understanding of the usefulness and so that you will gain an understanding of the usefulness and limitations of different risk assessment techniques as applied tlimitations of different risk assessment techniques as applied to o process safety management.process safety management.
Our focus will be industries where different types of hazards arOur focus will be industries where different types of hazards are e inherent in their business processes, in particular those that dinherent in their business processes, in particular those that deal eal with hazardous materials.with hazardous materials.
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employee riskemployee riskpublic riskpublic riskenvironmental riskenvironmental riskproduction riskproduction riskproperty riskproperty riskshareholder riskshareholder risk
facility riskfacility risktransportation risktransportation riskproject riskproject riskmarket riskmarket riskcurrency riskcurrency riskpublic outrage public outrage riskrisk
financial riskfinancial riskintegrated riskintegrated riskenterprise riskenterprise risk
Risk “Source”
Perspective
Risk “Source”
Perspective
Risk “Receptor” Perspective
Risk “Receptor” Perspective
“Bottom line” perspective
“Bottom line” perspective $$$$
We are faced with many different types of risks in dayWe are faced with many different types of risks in day--toto--day operations:day operations:
Risk ConceptsRisk Concepts
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Risk ConceptsRisk Concepts
Situation of Interest for Risk Assessment:Situation of Interest for Risk Assessment:
Risk SourceRisk Source
Areas where the undesirable events can occur:Manufacturing facility, mine, power plant, ...Transportation facility, rail, marine, pipeline, …Areas and markets where the company operates
Risk ReceptorRisk Receptor
EmployeesPublicEnvironmentPlant Units/ EquipmentPropertyCorporationShareholdersSociety
Risk Impact
Questions we are trying to answer in Risk Management:Questions we are trying to answer in Risk Management:What are the undesirable events that can occur at the risk sourcWhat are the undesirable events that can occur at the risk source? e? What can their impacts be on the receptors? How likely are they?What can their impacts be on the receptors? How likely are they?Should we try to eliminate or reduce the risk?Should we try to eliminate or reduce the risk?Risk
Assessm
ent
Risk Contro
l
If we should, how can we?If we should, how can we?
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ManagementManagement
Process of analyzing business stakeholder needs, and taking Process of analyzing business stakeholder needs, and taking steps to meet those needs by steps to meet those needs by
Designing and implementing the necessary business Designing and implementing the necessary business processes (work flow), processes (work flow), Developing the resources to carry out these business Developing the resources to carry out these business processes, and processes, and Organizing these resources. Organizing these resources.
A major component of management is to eliminate the potential A major component of management is to eliminate the potential for disruption of work flow, or reduce this potential to acceptafor disruption of work flow, or reduce this potential to acceptable ble levelslevels
This we call risk management.This we call risk management.
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Management Process Management Process for Continual Improvementfor Continual Improvement
Stakeholder Participation
VisionAssessCurrent situation versus where you want to be, options of how to get there
PlanImplement
Review
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Process of analyzing exposure to loss and taking steps to Process of analyzing exposure to loss and taking steps to eliminate the risk or reduce it to acceptable levels.eliminate the risk or reduce it to acceptable levels.
Building safety into physical assets, as well as the way Building safety into physical assets, as well as the way people think and work.people think and work.
Risk ManagementRisk Management
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Risk Management Process Risk Management Process for Continual Improvementfor Continual Improvement
Stakeholder Participation
VisionRisk AssessmentAnd Option Evaluation
PlanImplement
Review
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Classical Management Process Steps• Vision: Set Policy and Direction• Assess• Plan• Implement• Review
• Risk Avoidance• Risk Transfer• Risk Financing• Risk Control
Risk Management ProcessRisk Management Process
2. System/ Scope Definition:Define Boundaries, Understand
Needs of Stakeholders
4. Risk Control:Examine New/ Different Control Options• Facility “Safety” Management (OHS. PSM,…)• Land Use / Buffer Zones• Incident Management / Emergency Response
Yes
No
Cannot Decide
Need More Information
3b. Risk Acceptability Evaluation:
Do we need to reduce risk?
Learning Loop Continuous Improvement Loop
3a. Risk Analysis:• Hazard Identification (at-risk behaviour
and physical conditions)• Consequence Analysis• Likelihood Analysis• Risk Estimation/ Ranking
6. Learning:Broaden Scope,
Increase Detail to Reduce
Uncertainty
1. Initiation: Identify the Activity to be Managed,Identify the Stakeholders / Risk Receptors
3. Risk Assessment 7. Stakeholder Participation
• Communicate Risks With Stakeholders
• Consider Stakeholder Needs/ Risks/ Costs/ Benefits in Decisions
5a. Plan Implementation of Activity/ New Controls
5c. Review: Monitor Controlled Risks/ Audit Implementation and Performance
5b. ImplementActivity/ New Controls
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RISK is seen by many people in terms of their own personal RISK is seen by many people in terms of their own personal experiences… experiences…
The following quotation is one which exemplifies a typical approThe following quotation is one which exemplifies a typical approach to risk.ach to risk.
On April 15, 1913, RMS Titanic sank with the loss of On April 15, 1913, RMS Titanic sank with the loss of more than 1500 livesmore than 1500 lives -- one of which was its Captainone of which was its Captain-- E.J.Smith.E.J.Smith.
"…in all my experience, I "…in all my experience, I have never been in an have never been in an accident of any sort accident of any sort worth worth sspeaking about. I peaking about. I have seen but one have seen but one vessel in distress in all vessel in distress in all my years at sea… I my years at sea… I never saw a wreck and never saw a wreck and have never been have never been wrecked, nor was I ever wrecked, nor was I ever in any predicament that in any predicament that threatened to end in threatened to end in disaster of any sort." disaster of any sort."
Captain Edward J. SmithCaptain Edward J. Smithinterviewed by the New interviewed by the New York press, 1907.York press, 1907.
The ChallengeThe Challenge
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Formally, risk due to an “undesirable event”Formally, risk due to an “undesirable event”
Risk = Likelihood of undesirable event Risk = Likelihood of undesirable event x Consequence of that eventx Consequence of that event
Undesirable eventUndesirable eventAn event which has the potential for causing adverse effects on An event which has the potential for causing adverse effects on people, property/production or the environmentpeople, property/production or the environmentAn event (or condition) that can result in An event (or condition) that can result in reputational reputational or or material financial loss or prevent the organization from material financial loss or prevent the organization from achieving its business objectivesachieving its business objectives
Risk ConceptsRisk Concepts
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Risk ConceptsRisk Concepts
Examples of undesirable eventsExamples of undesirable eventsEquipment breakdown, collapseEquipment breakdown, collapseLiquid spills, gas clouds, fires, explosionsLiquid spills, gas clouds, fires, explosionsFalls, falling objects, collisionsFalls, falling objects, collisionsEnvironmental contamination as a result of short or long term Environmental contamination as a result of short or long term releasesreleasesLoss of key personnelLoss of key personnelMarket collapseMarket collapsePrice/currency fluctuationsPrice/currency fluctuations
We can provide a natural We can provide a natural linklink between between risk assessmentrisk assessment and and reliability and maintenance programsreliability and maintenance programs, if we include in our list , if we include in our list “equipment breakdown” even though in itself such an event may “equipment breakdown” even though in itself such an event may not have occupational, public, environmental or asset damage not have occupational, public, environmental or asset damage potential. potential.
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Formal Definition of RiskFormal Definition of RiskEvent Risk = Estimated likelihood of undesirable event
X Estimated consequences of that eventEvent Risk = Estimated likelihood of undesirable event
X Estimated consequences of that event
How to Estimate RiskHow to Estimate Risk
Units of risk depend on the choice of units for expressing the Units of risk depend on the choice of units for expressing the consequencesconsequences
fatalities/year = events/year x fatalities/eventfatalities/year = events/year x fatalities/eventinjuries/year = events/year x injuries/eventinjuries/year = events/year x injuries/eventWCB cost $/year = events/year x WCB cost $/eventWCB cost $/year = events/year x WCB cost $/eventcleanclean--up $/year = events/year x cleanup $/year = events/year x clean--up $/eventup $/eventcontaminated hectares/year = events/year x contaminated hectcontaminated hectares/year = events/year x contaminated hectares/eventares/eventnumber of wildlife affected/year = events/year x number of winumber of wildlife affected/year = events/year x number of wildlife ldlife affected/eventaffected/eventproduction loss $/year = events/year x $/eventproduction loss $/year = events/year x $/eventproperty damage $/year = events/year x $/eventproperty damage $/year = events/year x $/eventmarket share loss $/year = events/year x $/event market share loss $/year = events/year x $/event
Expressing risk is $ terms provides a natural progression to risExpressing risk is $ terms provides a natural progression to risk/ k/ cost/ benefit analyses for decisioncost/ benefit analyses for decision--making purposesmaking purposes
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Requirements for Success …Requirements for Success …
TopTop--down commitment (Safety Culture)down commitment (Safety Culture)BottomBottom--up awareness (Safety Culture)up awareness (Safety Culture)Structure in the middleStructure in the middleA risk management process wellA risk management process well--understood by allunderstood by allAvailability of a full range of risk assessment and risk/cost/beAvailability of a full range of risk assessment and risk/cost/benefit nefit analysis tools of various sophisticationanalysis tools of various sophistication
to determine the level of risk exposure using appropriate risk to determine the level of risk exposure using appropriate risk measurement parametersmeasurement parametersto evaluate suitability of risk control actionsto evaluate suitability of risk control actions
Appropriate risk control strategies, and human and physical Appropriate risk control strategies, and human and physical resourcesresourcesA company standard reflecting the values of the organization andA company standard reflecting the values of the organization andthe requirements that are asked of itthe requirements that are asked of it
in Balancing the needs of Stakeholders and Achieving Superior in Balancing the needs of Stakeholders and Achieving Superior Risk Management PerformanceRisk Management Performance
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Integrated Risk Assessment Tools of Various Integrated Risk Assessment Tools of Various Sophistication to Determine the Level of Risk ExposureSophistication to Determine the Level of Risk Exposure
Hierarchy of tools:Hierarchy of tools:Qualitative / SemiQualitative / Semi--Quantitative / Quantitative toolsQuantitative / Quantitative toolsScreening Level Risk AssessmentScreening Level Risk AssessmentHAZOP, FMEA, etc.HAZOP, FMEA, etc.Job safety analysisJob safety analysisFault trees, event treesFault trees, event treesConsequence modelingConsequence modelingFinancial representation of consequencesFinancial representation of consequences
Estimation of:Estimation of:Individual riskIndividual riskSocietal riskSocietal riskFacility riskFacility riskIntegrated enterprise riskIntegrated enterprise risk
Erosion
Collision
Corrosion
OR
OR
OR
OR
OR
Broken Line
OR
FFacility Societal Risk Curve
N
$$$$$$
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Techniques for Risk AnalysisTechniques for Risk Analysis
Qualitative Techniques (Screening Level Analysis, Checklists, Qualitative Techniques (Screening Level Analysis, Checklists, What If, HAZOP,What If, HAZOP, FMEA)FMEA)
SemiSemi--Quantitative (Index/Matrix) MethodsQuantitative (Index/Matrix) Methods
Quantitative Risk Analysis (QRA)Quantitative Risk Analysis (QRA)
Risk analysis and evaluation can take place at different levels Risk analysis and evaluation can take place at different levels of of detail. A hierarchy of risk analysis tools are available, detail. A hierarchy of risk analysis tools are available, depending on the requirements at hand:depending on the requirements at hand:
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Similarities and DifferencesSimilarities and Differences
The physical components of the system, the operation, and the The physical components of the system, the operation, and the factors influencing failure frequency must be understood.factors influencing failure frequency must be understood.
Differences Between the Various Approaches:Differences Between the Various Approaches:Checklists, etc., provide only qualitative information about a Checklists, etc., provide only qualitative information about a system, and help to identify hazards.system, and help to identify hazards.
The index/matrix techniques provide semiThe index/matrix techniques provide semi--quantitative quantitative information. The index values are dimensionless, and do not haveinformation. The index values are dimensionless, and do not haveany meaning other than within that particular indexing system.any meaning other than within that particular indexing system.
The QRA will provide quantitative information in commonly The QRA will provide quantitative information in commonly understood units. Therefore, it is possible to make interunderstood units. Therefore, it is possible to make inter--industry industry comparisons and comparisons against benchmark acceptability comparisons and comparisons against benchmark acceptability criteria, and quantify benefits against cost of risk reduction criteria, and quantify benefits against cost of risk reduction measures.measures.
Common Feature of the Various Approaches:Common Feature of the Various Approaches:
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Progression From Simpler to More Complex Progression From Simpler to More Complex TechniquesTechniques
During the implementation stages of a risk management program, During the implementation stages of a risk management program, or for any new activity or project, we should start by carrying or for any new activity or project, we should start by carrying out a out a screening level assessment.screening level assessment.
Screening level techniques provide us with information onScreening level techniques provide us with information onWhether we can act without further study and analysisWhether we can act without further study and analysisWhat type of further analysis would be warranted (qualitative/ What type of further analysis would be warranted (qualitative/ quantitative)quantitative)
If highIf high--risk areas as identified by a screening level approach are risk areas as identified by a screening level approach are related to chemical processes, a HAZOP may be suitable as the related to chemical processes, a HAZOP may be suitable as the next level of detailed study for those areas, to understand how next level of detailed study for those areas, to understand how a a process can fail and to develop safeguards that would help process can fail and to develop safeguards that would help minimize the likelihood or severity of such failuresminimize the likelihood or severity of such failures
For complex equipment, a FMEA may be suitableFor complex equipment, a FMEA may be suitable
We do not have the time and resources to use the most complex We do not have the time and resources to use the most complex techniques, nor should we try to use the most complex techniques, nor should we try to use the most complex techniques for every problem at handtechniques for every problem at hand
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Typical Output from a Qualitative Risk Analysis:Typical Output from a Qualitative Risk Analysis:List of Hazardous Events and Their Risk RankingList of Hazardous Events and Their Risk Ranking
Public Env. Empl. Prod. Cap.Equ. Mark.Shr
Proc
ess
Sect
ion
Proc
ess
Sect
ion
Haza
rd Id
. No.
Haza
rdou
s Ev
ents
Cau
se(s
)
Freq
uenc
y
Con
sequ
ence
s
Ris
k
Freq
uenc
yC
onse
quen
ces
Ris
k
Freq
uenc
y
Con
sequ
ence
s
Ris
k
Freq
uenc
yC
onse
quen
ces
Ris
k
Freq
uenc
y
Con
sequ
ence
s
Ris
k
Freq
uenc
y
Con
sequ
ence
s
Ris
k
Safe-guards Actions
1
Natural Gas Supply
1
Fireball and Jet flame from transmission line
Underground pipeline rupture due to corrosion, third party damage with ignition of released gas
1 4 L 2 2 VL 2 4 M 2 3 L 2 3 L 1 1 VL
Work permit system; cathodic protection
1
Fireball and Jet flame from transmission line
Abovegroud pipeline rupture due to corrosion, third party damage, collision with ignition of gas 1 4 L 2 2 VL 3 4 H 2 3 L 2 3 L 1 2 VL
Cathodic protection
Install collision protection at main gas inlet to plant process area. Improve line labelling and develop unique colour code for piping.
1
Gas release (with traces of H2S )
Upstream failure to treat gas at source 1 2 VL 1 2 VL 1 2 VL 1 3 VL 1 1 VL 1 1 VL
Check possibility of H2S in gas supply
2
Process Steam Supply
2
Firebox explosion
Insufficient purge and failure of burner management system
2 1 VL 2 1 VL 2 4 M 2 2 VL 2 2 VL 2 1 VL
Burner management system (fireeye, shut-off interlocks)
2
Steam drum BLEVE
Material failure
1 1 VL 1 1 VL 1 3 VL 1 2 VL 1 2 VL 1 1 VL
Inspections before installations; NDT testing
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A Qualitative analysis generally:A Qualitative analysis generally:is conducted by walkis conducted by walk--though inspections and in sitthough inspections and in sit--down team down team sessions, sessions, is relatively quick, is relatively quick, does not require highdoes not require high--level technical and scientific skills, level technical and scientific skills, is based on the personal knowledge and experience of the is based on the personal knowledge and experience of the people in the team. people in the team.
As such, the assignment of undesirable events into As such, the assignment of undesirable events into frequency/consequence classes may have large uncertainties.frequency/consequence classes may have large uncertainties.
For some events of interest (e.g., high risk, high consequence, For some events of interest (e.g., high risk, high consequence, high mitigation cost), it may be desirable to understand their high mitigation cost), it may be desirable to understand their frequencies and/or consequences with a higher accuracy than frequencies and/or consequences with a higher accuracy than would be possible with a qualitative analysis based on personal would be possible with a qualitative analysis based on personal knowledge.knowledge.
Progression from Qualitative to Quantitative AnalysisProgression from Qualitative to Quantitative Analysis
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Progression from Qualitative to Quantitative AnalysisProgression from Qualitative to Quantitative Analysis
For events where higher accuracy is desirable, wellFor events where higher accuracy is desirable, well--established established quantitative techniques are available for improving the accuracyquantitative techniques are available for improving the accuracyof the analysis.of the analysis.
For such events (especially those with offFor such events (especially those with off--site consequences):site consequences):estimate their frequency using established techniques (e.g., estimate their frequency using established techniques (e.g., fault trees, event trees).fault trees, event trees).estimate hazard levels as a function of distance from event estimate hazard levels as a function of distance from event location using mathematical models (e.g., dispersion models location using mathematical models (e.g., dispersion models for toxic gases or for toxic gases or vapoursvapours).).
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Quantitative AnalysisQuantitative Analysis
This information is used to confirm or correct the earlier This information is used to confirm or correct the earlier qualitative assignments and ranking, and to feed into emergency qualitative assignments and ranking, and to feed into emergency response plans.response plans.
Once event risks are quantified, this information will also lendOnce event risks are quantified, this information will also lenditself to:itself to:
making risk/ cost/ benefit analyses, and to making risk/ cost/ benefit analyses, and to estimation of total facility risk for:estimation of total facility risk for:
comparison against acceptability guidelines, and/or for comparison against acceptability guidelines, and/or for understanding total financial risk exposure of projects or understanding total financial risk exposure of projects or facilities. facilities.
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Presentation of Risk Presentation of Risk Individual RiskIndividual Risk
Individual Risk Profile:Individual Risk Profile: Graph of Individual Risk as a function of Graph of Individual Risk as a function of Distance from the risk source Distance from the risk source I
10-3
Event LocationDistance from Event Location
I d = f x P d
d
Individual Risk Contours Individual Risk Contours (for non(for non--directional events, directional events, viewed from above; for viewed from above; for directional events, the directional events, the contours would not be contours would not be circular)circular)
Event Location
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Risk EvaluationRisk Evaluation
E.g. Risk Acceptability Criteria for LandE.g. Risk Acceptability Criteria for Land--use Planninguse Planning
Allowable Land UsesAllowable Land Uses
Risksource
No other land use
Manufacturing, warehouses, open space(parkland, golf courses,
etc.)
Commercial, offices,low-density residential
All other uses including institutions,
high-density residential, etc.
100 in a million(10-4)
10 in a million(10-5)
1 in a million(10-6)
Annual Individual RiskAnnual Individual Risk(chance of fatality per year)(chance of fatality per year)
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Loss/Risk MapLoss/Risk Mapf
Consequence N Loss/Risk Profile (Complementary Cumulative Distribution Loss/Risk Profile (Complementary Cumulative Distribution Function or FN Curve)Function or FN Curve)
F
Consequence N
Freq
uenc
y of
Eve
nts
with
Con
sequ
ence
La
rger
Tha
n or
Equ
al
To N
Intolerable Region
As Low As Practicable RegionTolerable Region
Facility Societal Risk Curve
Individual Events
Presentation of Risk Presentation of Risk Societal RiskSocietal Risk
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Example Societal Risk GuidelinesExample Societal Risk Guidelines
1 10 100 1000 1000010-8
10-7
10-6
10-5
10-4
10-3
10-2
10-1
De Manifestis
De Minimis
Gray Region
Consequence (Fatalities, $) (N)Freq
uenc
y (F
) of N
or H
ighe
r Con
sequ
ence
(eve
nts/
year
)
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Why Bother...?Why Bother...?
Not only do we want to avoid any human suffering, and Not only do we want to avoid any human suffering, and environmental degradation, but also:environmental degradation, but also:
“Safety” issues present significant risks to business “Safety” issues present significant risks to business performance.performance.
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Why Bother...?Why Bother...?
The potential impact The potential impact on the profit and loss on the profit and loss of an organization can of an organization can be significant.be significant.
UndesirableEvent
UndesirableEvent
$200,000 Extra Costs
$20,000
$180,000
Direct CostsRepair to equipmentClean-up
Indirect CostsManagement TimeCompensation ClaimsIncreased Insurance CostsBusiness InterruptionLoss of Good Will
TheCostIceberg
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Why Bother...?Why Bother...?The knock on impact for revenue generation can be sizable.The knock on impact for revenue generation can be sizable.
Revenue toCover CostsRevenue toCover Costs
Total CostTotal Cost
Profit MarginProfit Margin
How easily can your business generate this extra revenue?How easily can your business generate this extra revenue?
$4,000,000$4,000,000
$200,000$200,000
5%5%