Friends or Foes: Safety, Productivity, and Today’s Oil Price

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Friends or Foes: Safety, Productivity, and Today's Oil Price

Friends or Foes: Safety, Productivity, and Today’s Oil Price

By Mike Neill

Over the past 18 months, the declining oil price has forced oil and gas companies to make critical operational changes. These adjustments – which can be seen in the form of budget cuts, project deferrals, and layoffs – are putting safe, productive operations under pressure. With reduced resources at companies’ disposal, it is vital to understand how to manage tighter budgets and improve operational efficiencies while managing the dynamic between safety and productivity.

For operators who are trying to do more with less, safety can become marginalized, particularly when it comes to prioritizing operations and maintenance schedules. Under increasing cost and productivity pressures, operational decisions can lead to inadvertent risk-taking with Process Safety Management (PSM) and barrier health. It’s precisely these times that we need to consider changing PSM culture so that it becomes a critical enabler for ensuring safe, reliable production.

The fact is a safer plant is a more reliable plant. And a more reliable plant is a more productive plant. But how do operators know, with confidence, the real-time health of their plant?

The oil and gas industry needs to find new ways to holistically understand how operations and maintenance activities and risks work together to impact potential exposure leading to a major accident. Process Safety barriers are designed to prevent or mitigate the consequences of major incidents. These barriers include hardware equipment, ranging from vessels and pipe walls, to safety instrumented systems – such as pressure and level switches or automated valves. All require regular inspection, testing, and preventative maintenance to ensure they perform as designed.

With cost pressures driven by the low oil price, there is temptation for operators to prioritize simple, obvious work that presents the lowest threat to ongoing operations. Instead, operators should focus on scenarios that pose the biggest overall risk to productivity and safety – and, as a minimum, they need to inspect and maintain the associated barrier systems. Without a complete understanding of the consequences of each and every risk on the plant, as well as cascading risks, operators could potentially increase their exposure to process safety-related incidents.

It can be nearly impossible to evaluate and prioritize risk across an asset and throughout an organization, as each department will have its strategies and priorities. Maintenance data is collected through separate, autonomous inspection, testing, and enterprise systems – adding unknown risk to each team’s understanding. What is often seen in an industry downturn, operators will defer costly preventative maintenance – creating backlogs that prove difficult to reduce – and, more crucially, elevating risks across the plant.

For example, an offshore operator could save millions of dollars by deferring a plant shutdown when executing platform or equipment maintenance and upgrades. But, if operators continue to stretch their maintenance schedules to the limit – only executing the bare minimum – this can result in major operational and safety issues down the line. Unfortunately, the degree to which risk is increased is not always obvious, which is perhaps why some of these cost-saving decisions are made.

As operators continue to tighten their budgets, they need access to more sophisticated tools to improve insight and ensure better operational decisions. A solution that can widely communicate the real-time exposure of Major Accident Hazard (MAH) risk and prioritize operational tasks based on an enterprise-wide language of risk can help operators manage safety and productivity in a simple and effective way.

By understanding how to get more of the right work done, at the right time, in the right way – operators can make smarter, cost-effective decisions to ensure a safe, successful, and sustainable future.

To learn more, please visit my team and me at the 2016 AIChE/CCPS Global Congress on Process Safety. More information on the event can be found here.

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