A process safety management/operational risk management survey conducted by Sphera in 2020 polled respondents on the following items:
- Safety culture
- The reality of risk across hazardous industries
- The methods organizations use for identifying, understanding and communicating risk
- Priorities and company plans for digital transformation.
The industry breakdown included oil and gas (36%), chemicals and petrochemicals (19%) and manufacturing (17%), as well as other industries like oilfield services, utilities, metals and mining. Participation was offered globally, and feedback was received across all regions.
Some of the key statistics include 88% of participants indicating that safety is part of corporate value structures, supported by upper management; 78% of respondents continuously monitoring safety performance; and 60% of participants striving to reduce operational and major accident hazard risk exposure. The survey suggested additional drivers for improving safety performance, including continuous process improvement, operational excellence, regulatory compliance, and satisfying corporate and board priorities, among others.
Risk awareness can pay for itself
Despite good intentions, 49% of survey respondents said most organizations are unaware of their major accident hazard risk vulnerability, and only 37% are confidently and proactively managing process safety risk exposure. For the last 5 yr, the percentage of companies that proactively manage safety have been surveyed; year on year, the result is somewhere in the 36%–40% range.
This statistic gives reason for pause. Earlier this year, Marsh published its 100 largest hydrocarbon loss report. It is striking that over the past 2 yr, the industry faced its largest losses on record—$4.5 B, which is 10% of the combined 50-yr total. Aging infrastructure and high utilization in the downstream sector were largely to blame (FIG. 1). Over those 2 yr, the oil and gas industry was recovering from its previous oil price downturn, which may very well repeat itself again 2 yr from now. It begets the question: Do companies actually have the right tools to proactively manage infrequent, high-consequence events?FIG. 1. Aging infrastructure and high utilization in the downstream sector are largely to blame for the $4.5 B of hydrocarbon losses reported over the past 2 yr.
Sphera asked companies how they identify risks. Audits and inspections, hazard and operability studies (HAZOPs), “what-if” studies and process hazards analyses (PHAs) are the most common means. Around 46% of participants suggested that they have deployed technology systems to support their risk assessments. However, they also highlighted concerns about the frequency and effectiveness of those studies. Half of the companies said they review risk every 1 yr–6 yr, with only 8% reporting that they review risk daily or weekly. Approximately 53% indicated that they are assessing only a portion of their facilities, while half are concerned with the consistency and quality of their assessment and audit practices. On average, companies reported that they are able to complete only 68% of their average safety-critical maintenance and asset integrity inspections every year. Data is siloed, systems are static and information is dated and incomplete.
Also, only 51% of respondents said they thought it was practical to set 100% of their planned maintenance and inspections to active, because limited resources (72%), conflicting priorities (71%) and limited budget (49%) were getting in the way—the same three challenges seen in every survey for the last 5 yr running. Also, average scheduled maintenance and inspections achieved has hovered at the 70% level for the last 3 yr. These results reinforce the thinking that perhaps the right tools are not available to make proactive safety decisions.
Lacking and lagging insights are perhaps the reason the majority of industry leaders told us there are gaps between well-engineered process safety approaches and the reality on assets. They also agreed that risk changes between periodic process safety review periods due to a loss of experienced personnel, lack of operational risk visibility, conflicts between procedures and work practices, and poor process execution and management of change. The factors with the most impact on those elements, however, are organizational culture, senior leadership and human factors.
Shoring up safety with real-time technologies
Companies know they are operating without the right insights—they need something more comprehensive. They also understand the value of technology and how it makes their companies and teams safer. In fact, 2020 witnessed an 11% growth in this trend over last year. Survey participants also told us that they are using technology to remotely monitor facility and operational performance, to improve work prioritization and planning, and to monitor asset health.
Some of the technology solutions companies are using today are helping them understand process safety lessons learned, changes in operating procedures and changes in equipment health and performance. Organizations also shared that they are making big investments to implement remote sensors and equipment-related risk identification tools. In fact, equipment sensors (59%) and condition monitoring (50%) are the most commonly implemented systems, with 23% deploying new equipment performance solutions at the regional level to monitor when an answer requires service.
Companies understand that they are presently operating with piecemeal data. With that understanding, it is interesting to note that 39% of companies are working their digital strategies to integrate environment, health, safety and sustainability (EHS&S) and operational risk management (ORM) solutions at the enterprise level. Integration goals are in service of creating new, data-driven business processes across functions, understanding where to make safety improvements and map dynamic risk pathways. Such dynamic risk pathways are new. Sphera’s subject matter experts have shared more about this trend.
Industry is now looking for real-time condition monitoring solutions to bring operating and asset conditions together. The creation and ongoing validation of PHAs, HAZOPs and other risk studies are time-consuming and expensive, and it can be difficult to capture ongoing and evolving information. Operators know that when well-designed and well-specified processes and equipment enter service, things begin to change. Over time, assets age; but there are also daily interventions on the plant. Things change—whether because of new management-of-change (MOC) procedures being put into place or because of existing MOCs being extended.
Impairments, startups, shutdowns and permitted maintenance activities introduce hazards and risk to the assets. This is an interesting statistic because process safety leaders see technology as the digital leap needed to overcome their siloed, lagging situations. They are now moving in a direction to simulate and visualize, in real time, the health status of risk pathways that pertain to specific scenarios captured through bowtie risk visualization diagrams and PHAs. This idea would essentially bring live data from historian distributed control systems (DCSs), maintenance systems, inspection/MOC and control of work databases to understand the operational, maintenance and verification conditions and status of safety-critical equipment in real time.
One area where technology is rapidly taking off is fog/edge computing, which enables the gathering of more data that sits closer to the asset. Industry leaders expect sixfold growth in this area. Another area is digital twin technology, which promises to support safer operations, plantwide productivity and performance, and safer, more efficient shutdowns and turnarounds. Digital twin technology is anticipated to post threefold growth.
How to know what you don’t know
Looking at the results of this year’s survey, one of the industry trends that is visible between the data presented here and the data coming from others like Marsh, is that complex systems migrate toward states of high risk, but operators often do not realize it until something bad happens. For some companies, it is not that process safety is simply “out of sight, out of mind.” These companies have done their risk studies. They have noted their lagging indicators and lessons learned. What they do not have is a joined-up, real-time view of asset and operating conditions. They know the risk this poses, and they know that no single, siloed system provides good safety indicators. Here is seen the big leap from 51% reviewing risk every 1 yr–6 yr, to 52% wanting access to the nuanced state of process safety barriers in real time and wanting the ability to simulate operating conditions based on certain risk scenarios.
The stakes are simply too high to ignore the financial and reputational savings offered by advanced asset safety monitoring. The oil and gas industry, in particular, needs this level of resilience due to the critical nature of its assets. A recent article published in the Houston Chronicle described Total’s perspective: The combination of the coronavirus pandemic and the oil crash are accelerating digital transformation to help companies boost efficiency, cut costs and make money at lower commodity prices. We hope they also find value in improving safety.
Going back a couple of years to our 2018 survey, we asked the industry what they thought the safety impact would be following the low oil price. Of the total respondents, 72% said process safety risk increases. As we saw with the Marsh data and expectations about future years, meeting those projections will require a dramatic digital transformation today. HP