Page 39 - Pipeline Risk Management Manual Ideas, Techniques, and Resources

1/18 Risk: Theoryand Application
Naturally, when given a surprise, you should then be skepti- ing and a way ofdoing business. It is widely believed that atten-
cal and ask to be convinced. That helps to validate your model tion to quality concepts is a requirement to remain in business
and leads to the next points. in today’s competitive world markets.
Risk management can be thought of as a method to improve
The “Why is that? ” test (drill down) quality. In its best application, it goes beyond basic safety
issues to address cost control, planning, and customer satisfac-
So let’s say that the new knowledge proposed by your model is tion aspects of quality. For those who link quality with compet-
that your pipeline XYZ in Barker County is high risk. You say, itiveness and survival in the business world, there is an
“What?! Why is that high risk?”You should be initially skepti- immediate connection to risk management. The prospect of a
cal, by the way, as noted before. Well, the model should be able company failure due to poor cost control or poor decisions is a
to tell you its reasons; perhaps it is because coincident occur- risk that can also be managed.
rences of population density, a vulnerable aquifer, and state Quality is difficult to define precisely. While several differ-
park lands, coupled with 5 years since a close interval survey, ent definitions are possible, they typically refer to concepts
no ILI, high stress levels, and a questionable coating condition such as (1) fitness-for-use, (2) consistency with specifications,
make for a riskier than normal situation. Your response should and (3) freedom from defects, all with regard to the product or
be to say, “Well, okay, looking at all that, it makes sense. . . .” In service that the company is producing. Central to many of the
other words, you should be able to interrogate the model and quality concepts is the notion of reducing variation. This is
receive acceptable answers to your challenges. If an operator’s the discipline that may ultimately be the main “secret” of the
intuition is not consistent with model outputs, then one or the most successful companies. Variation normally is evidence
other is in error. Resolution of the discrepancy will often of waste. Performing tasks optimally usually means little
improve the capabilities of both operator and model. variation is seen.
All definitions incorporate (directly or by inference) some
The “point to map ” test (location specific and reference to customers. Broadly defined, a customer is anyone
complete) to whom a company provides a product, service, or informa-
tion. Under this definition, almost any exchange or relationship
This test is often overlooked. Basically, it means that you involves a customer. The customer drives the relationship
should be able to pull out a map of your system, put your finger because he specifies what product, service, or information he
on any point along the pipeline, and determine the risk at that wants and what he is willing to pay for it.
point--either relative or absolute. Furthermore, you should be In the pipeline business, typical customers include those
able to determine specifically the corrosion risk, the third-party who rely on product movements for raw materials, such as
risk, the types of receptors, the spill volume, etc., and quickly refineries; those who are end users of products delivered,
determine the prime drivers of the apparently higher risk. This such as residential gas users; and those who are affected by
may seem an obvious thing for a risk assessment to do, but pipelining activities, such as adjacent landowners. As a
many recommended techniques cannot do this. Some have pre- whole, customers ask for adequate quantities of products to be
determined their risk areas so they know little about other areas delivered
(and one must wonder about this predetermination). Others do
not retain information specific to a given location. Others
do not compile risks into summary judgments. The risk infor- With no service interruptions (reliability)
mation should be a characteristic of the pipeline at all points, With no safety incidents
just like the pipe specification. At lowest cost

The “What about -? ” test (a measure of
completeness) This is quite a broad brush approach. To be more accurate,
the qualifiers of “no” and “lowest” in the preceding list must be
Someone should be able to query the model on any aspect of defined. Obviously, trade-offs are involved-improved safety
risk, such as “What about subsidence risk? What about stress and reliability may increase costs. Different customers will
corrosion cracking?” Make sure all probability issues are place differing values on these requirements as was previously
addressed. All known failure modes should be considered, even discussed in terms of acceptable risk levels.
if they are very rare or have never been observed for your For our purposes, we can view regulatory agencies as repre-
particular system. You never know when you will be comparing senting the public since regulations exist to serve the public
your system against one that has that failure mode or will interest. The public includes several customer groups with
be asked to perform a due diligence on a possible pipeline sometimes conflicting needs. Those vitally concerned with
acquisition. public safety versus those vitally concerned with costs, for
instance, are occasionally at odds with one another. When a
regulatory agency mandates a pipeline safety or maintenance
IX. Quality and risk management program, this can be viewed as a customer requirement origi-
nating from that sector ofthe public that is most concerned with
In many management and industry circles, quality is a popu- the safety of pipelines. When increased regulation leads to
lar concept--extending far beyond the most common uses of higher costs, the segment of the public more concerned with
the term. As a management concept, it implies a way of think- costs will take notice.