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2/22 Risk Assessment Process
          to use this general approach, since that was the original purpose   Step 3: Devise and implement a segmentation
          of the basic framework.                    strategy
            By using simple computer tools such as a spreadsheet or
          desktop database to hold risk data, and then establishing some   Because risks are rarely constant along a pipeline, it is advanta-
          administrative processes around the maintenance and use ofthe   geous to first segment the line into sections with constant risk
          information, the quick-start applicator now has a system to sup-   characteristics (dynamic segmentation) or otherwise divide the
          port risk management. Experienced risk managers may balk at   pipeline into manageable pieces.
          such a simplification of an often complex and time-consuming
          process. However, the point is that the process and underlying   Step 4:Assess the risks
          ideas are straightforward, and rapid establishment of a very
          useful decision support system is certainly possible. It may not   After a risk model has been selected and the data have been pre-
          be of sufficient rigor for a very detailed assessment, but the user   pared, risks along the pipeline route can be assessed. This is the
          will nonetheless have a more formal structure from which to   process of applying the algorithn-the  rules-to  the collected
          better  ensure decisions of  consistency and completeness of   data. Each pipeline segment will get a unique risk score that
          information.                               reflects its current condition, environment, and the operating/
                                                     maintenance activities. These relative risk numbers can later be
          For pipeline operators                     converted into absolute risk numbers. Risk assessment will need
                                                     to be repeated periodically to capture changing conditions.
          Whereas the approach described above is a way to get started
          quickly, this  tool becomes  even more powerful if the  user   Step 5: Manage the risks
          customizes it, perhaps adding new dimensions to the process
          to better suit his or her particular  needs. As with any engi-   This step consists of determining what actions are appropri-
          neered system (the risk assessment system described herein   ate  given  the  risk  assessment results.  This  is  discussed in
          employs  many  engineering  principles),  a  degree  of  due   Chapter 15.
          diligence is also warranted. The experienced pipeline opera-
          tor should challenge the example point  schedules: Do they   Model design and data collection are often the most costly
          match  your  operating  experience?  Read  the  reasoning   parts of the process. These steps can be time consuming not
          behind  the  schedules:  Do  you  agree  with  that  reasoning?   only in the hands-on aspects, but also in obtaining the neces-
          Invite (or require) input from employees at all levels. Most   sary consensus from all key players. The initial consensus often
          pipeline operators have a wealth of practical expertise that can   makes the difference between a widely accepted and a partially
          be used to fine-tune this tool to their unique operating envi-   resisted system. Time and resources spent in these steps can be
          ronment. Although customizing can create some new issues,   viewed as initial investments in a successfil risk management
          problems  can  be  avoided  for  the  most  part  by  carefully   tool.  Program  management  and  maintenance  are  normally
          planning  and  controlling  the  process  of  model  setup  and   small relative to initial setup costs.
          maintenance.
            The point here again is to build a useful toolbone that  is   111.  Risk assessment models
          regularly used to aid in everyday business and operating deci-
          sion making,  one that  is accepted and  used  throughout the   What is a model?
          organization. Refer also to Chapter 1 for ideas on evaluating the
          measuring capability of the tool.          Armed with an understanding of the scenarios that compose the
                                                     hazard  (see  Chapter  1  discussion  of  risk  model  building
                                                     blocks), a risk assessment model can be constructed. The model
          11.  Beginning risk management             is the set of rules by which we will predict the future perform-
                                                     ance of the pipeline from a risk perspective. The model will be
          Chapter 1 suggests the  following as basic steps in risk man-   the constructor’s representation of risk.
          agement:                                     The goal  of  any risk  assessment model is to quantify the
                                                     risks, in either a relative or absolute sense. The risk assessment
                                                     phase is the critical first step in practicing risk management. It
          Step 1: Acquire a risk assessment model    is also the most difficult phase. Although we understand engi-
                                                     neering concepts about corrosion and fluids flow, predicting
          A pipeline  risk  assessment model  is a  set  of  algorithms or   failures beyond the laboratory in a complex “real” environment
          “rules” that use available information and data relationships to   can prove impossible. No one can definitively state where or
          measure  levels  of risk  along a  pipeline. A  risk  assessment   when an accidental pipeline failure will occur. However, the
          model  can  be  selected  from  some  commercially available   more likely failure mechanisms, locations, and frequencies can
          models, customized from existing models, or created “from   be estimated in order to focus risk efforts.
          scratch” depending on requirements.          Some make a distinction between a model and a simulation,
                                                     where  a model is a simplification of the real  process and a
          Step 2: Collect and prepare data           simulation is a direct replica. A model seeks to increase our
                                                     understanding at the expense of realism, whereas a simulation
          Data preparation are the processes that result in data sets that   attempts to duplicate reality, perhaps at the expense of under-
          are ready to be read into and used by the risk assessment model.   standability and  usability.  Neither  is necessarily superior-
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