Page 369 - Pipeline Risk Management Manual Ideas, Techniques, and Resources

151344 Risk Management
Cost of mitigation have a very location-specific impact-high numbers in column
4, but not necessarily a large system-wide impact (column 6).
From an economical perspective, the lowest cost risk reduction Column 5 values represent the location-specific change in
options can (and probably “should”) be exhausted before the overall risk and are often the change seen in column 4 divided
more expensive options are considered. A risk assessment by the LIF (unless the project changes potential consequences,
model values activities based on their risk-reducing benefit, as in the last action). Other options, such as action 2, have a sys-
with no consideration given to the cost of the activity. tem-wide impact, as is shown in column 6. See the discussion
Therefore, the least expensive risk points can be sought when on cumulative risk calculations earlier in this chapter.
spending is directed to a specific index.
It is a simple matter to establish costibenefit ratios for possi-
ble actions and use them as at least a partial basis to prioritize x. costs
or fund projects. Projects with lower costs (both initial and
ongoing costs) and larger impact on risks are obviously more An American physicist wrote in 1990, “One out of five
desirable. An example analysis is shown inTable 15.6. American deaths is from smoking. . . . If we spent as much per
untimely death caused by smoking as we do on coal mine
Land-use issues safety, there would be no money left in the United States for any
other purpose-it would require the entire gross national prod-
Often in the course of a risk evaluation, someone asks “Why not uct” [57]. Risk perception and decisions regarding acceptable
just locate the pipeline away from sensitive receptors?” This risks are not always logical and fact based. This was addressed
could be desirable, of course, and is usually one of the first mit- earlier in this chapter and will be discussed further in the Risk
igations explored. However, it normally involves trade-offs communications section later in this chapter.
such as tremendous expense and often just moves the threat to a
different location and exposes different receptors. Cost/risk relationships
Some communities (and countries) have enacted building
setback distances and zoning requirements to keep a separation The costs associated with pipeline safety cannot realistically be
between pipelines and the public. Such regulations are very ignored when practicing risk management. Collecting the costs
challenging since they trigger many sociopolitical issues: and linking them with specific risk activities is a step that
allows decision makers to allocate resources optimally, An
What about pipelines that were there first? operating discipline that documents all aspects of the operation
Is it really in the communities’ best interest to restrict devel- can then be built.
opment on large tracts of land in order to avoid very low Each day, a pipeline operating group performs a variety of
probability events? activities that are driven by initiatives such as
What about smaller, low-pressure pipelines? (Note that dis-
tribution and service gas and propane lines are commonly Ensuring transportation obligations
needed in very congested urban areas.) Compliance with government regulations
Conformance with industry standards
Some hypothetical projects, with example costibenefit values, Continuance of previous operating habits.
are shown in Table 15.6. Columns 4 and 5 show the relative
change in failure probability and risk for the segment where the Each of these activities has an associated cost. There is also an
work is to be performed. Column 6 shows what impact the proj- opportunity cost since resources could be used in alternative
ect has on overall, system-wide risk. Note that some actions ways.

Table 15.6 Sample mitigation project cost-benefit analysis

I 2 3 4 5 6
Reduction in
Failure relative failure Cumulative risk
Cost NP V mechanism probability in Risk reduction reduction
dction (W impacted segment (%) in segment (%) (pipeline wide) (%)
1000-ft pipe replacement 82 All 22 5 0.2
Increased traininglprocedures 25 Incorrect 2 0.5 0.5
operations
Upgrade cathodic protection 46 Corrosion 14 3.5 0.07
Mapdrecords improvements 33 Third party; 8 2. I 2.1
incorrect
operations
Information management 19 All 17 4.2 4.2
system improvements
Recoat 400 ft 76 Corrosion 8 6 0.8