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Implementation of Health, Safety, &

Environment in the
U.S. Process Industry
October 21, 2008

BAKER & OBRIEN Incorporated, All Rights Reserved


CONFIDENTIAL
Agenda

Introduction
Health, Safety, and Environment (HS&E) Initiatives
OSHA 1910.119 - Process Safety Management of Highly
Hazardous Chemicals
OSHA National Emphasis Program
Risk-based Process Safety
Company Culture and Safety Performance
Closing Comments

CONFIDENTIAL 1
Introduction

Dave Morgan Senior Consultant with Baker & OBrien


Due to the occurrence of several catastrophic events within operating facilities,
it was determined that new initiatives for process safety were needed.
A high profile example is the Phillips Petroleum explosion and fire in 1989:
Pasadena, Texas
23 fatalities and 130 injuries
Hundreds of millions dollars in damage
Considered the precursor for upcoming governmental regulations
This incident, as well as others, usually occurred due to an aspect of safety
management failure, such as:
Improper training or understanding of procedures.
Inadequate follow-up of incident investigation or safety audits.
Inadequate inspection or maintenance programs.
Limited supervision of contractors or company personnel.
Incidents like these resulted in the evolution of process safety initiatives.
Company culture and employee commitment, however, have had the ultimate
impact to safety performance.

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Phillips Pasadena Explosion (1989)

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SH&E Initiatives

Regulations, by themselves, were not sufficient to reduce the risk of


accidents occurring at acceptable levels.
There needed to be new approaches to prevent or minimize the
consequences of a catastrophic event.
Process safety initiatives that were developed include:
OSHA Process Safety Management (PSM) standard
OSHA National Emphasis program
Industry recommendations such as Risk-based Process Safety
Process safety management programs are intended to develop
systems and processes to assure the greatest possible protection
from process related damage for:
Plant personnel
Surrounding public and environment
Process equipment and materials

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OSHA Process Safety Management (PSM)

The OSHA PSM standard (29 CFR 1910.119) was published in the
Federal Register on Monday, February 24, 1992.
PSM is a management system developed to manage the safety of any
process involving highly hazardous chemicals.
The objective of PSM is to prevent the occurrence or minimize the
consequence of a catastrophic release of toxic, flammable, or
explosive highly hazardous chemical from a process.
PSM consist of 14 individual elements that can be categorized into four
areas:
System implementation
Incident reduction
Incident management
System control

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PSM Elements
The 14 elements of PSM are:
Employee participation
Process safety information
Process hazard analysis (PHA)
Operating procedures
Training
Contractors
Pre start-up safety review
Mechanical integrity
Hot work permit (safe work practices)
Management of change (MOC)
Incident investigation
Emergency planning and response
Compliance audits
Trade secrets
Combined, each of these 14 points are intended to produce a holistic
approach to developing and implementing an effective PSM system.

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PSM Elements 1 thru 4
Employee participation states that employees must be given the opportunity to
participate in the development, implementation, and review of the PSM system.
Benefits include:
Employees are generally most knowledgeable of daily operations of the facility.
There is a significant advantage to encouraging participation and gaining support.
Process safety information consists of knowledge and data needed to
understand hazards associated with a process including:
Chemical hazards.
Process technology and equipment information.
Updated piping and instrumentation diagrams (P&IDs).
PHA is necessary to develop an effective PSM system by:
Identifying hazards associated with a system.
Assessing hazards, and then develop a mitigation to eliminate or reduce the risk.
Operating procedures are required to:
Standardize the way duties and tasks are performed.
Assure that operations are accomplished in a safe and environmentally sound
manner.

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PSM Elements 5 thru 9

Training is required to assure personnel understand the written procedures and


can operate complex equipment in a safe and responsible manner
Contractors provide many services to the industry, and PSM is used to assure
their safety by:
Informing contract employees about potential hazards.
Training contract employees in the companys safe work practices.
Pre start-up safety reviews are important to assure that both new and modified
processes can be started up safely.
Mechanical integrity programs assure critical equipment process safety by:
Identifying and categorizing equipment and system criticality.
Developing appropriate programs to operate and maintain critical equipment.
Assuring proper design, fabrication, and installation are considered.
Safe work practices are needed to ensure work activities that might affect
process safety are performed properly, and include:
Hot work permits.
Lock-out/tag-out.
Confined space entry.

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PSM Elements 10 thru 14

Management of change (MOC) is a formal process to assure that risk associated


with any changes to the process are evaluated to:
Reduce likelihood that changes will cause an incident to occur.
Improve communications and knowledge associated with a change.
Incident investigation is an activity to allow an effective PSM system to evaluate
unexpected occurrences and prevent them from happening again.
Emergency planning and response is needed to assure:
Facility is prepared to properly respond to both internal and external emergencies.
Plant personnel and contractors respond properly to easily-controlled situations and not
let them become uncontrollable or catastrophic.
Compliance audits are used as a process to evaluate the degree of compliance
with the OSHA 1910 standard. Others utilized are:
PSM system audit to evaluate the process itself and its ability to manage risk
Process safety audit to evaluate the design construction, operations, and maintenance
of the facility.
Trade secrets are required to assure all relevant information affecting process
safety is made available to employees, and may require a confidentiality
agreement.

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Renewed Industrial Focus

BP Amocos Refinery in Texas City, Texas explosion on March 23, 2005:


Killed 15 people and injured 170 individuals.
Splitter tower grossly overfilled, eventually expelling liquid hydrocarbons to
atmosphere.
Kern Oil Refinery in Bakersfield, California explosion on January 19, 2005:
Killed one employee and caused multiple injuries.
During start-up, employees cleaning reboiler pumps over-pressured the system,
causing a release and explosion
Giant Industries Refinery near Gallup, New Mexico explosion on April 8, 2004:
Six employees injured, with four being hospitalized.
While removing a pump, a valve was left open, resulting in release and explosion.
Renewed industry focus on PSM and heightened regulatory activities began:
OSHA determined that, due to a large number of fatal or catastrophic incidents in
the refining industry, there was a need for a new emphasis programs.
Since the creation of PSM in 1992 through 2007, approximately 36 fatalities have
occurred in refining industry.

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BP Texas City Explosion (2005)

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OSHA - National Emphasis Program

OSHA instituted a National Emphasis Program (NEP) (compliance directive


CPL-03-00-004) on June 7, 2007.
Approximately 300+ Compliance Safety and Health Officers have been trained
and have begun inspections throughout the country.
The purpose of the NEP is to:
Reduce or eliminate the workplace hazards associated with catastrophic releases .
Verify employers compliance with OSHAs PSM directive.
Emphasis of the new NEP inspection program is Implementation over
Documentation:
Past inspections found extensive written documentation.
However, implementation of procedures were found to be inadequate.
Industry emphasis began focusing on:
Training
Understanding and utilization of developed procedures
Work processes (i.e., human performance issues)

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Industry Initiatives

PSM initiative has been successful in:


Reducing plant incidents and improving overall safety.
Facilitating the development of written procedures and safety programs.
Raising awareness and identifying critical systems.
Incidents mentioned earlier indicate that in some areas there have been
inadequate results.
PSM programs can also be manpower intensive and strain available resources.
Industrial organizations, therefore, have focused efforts to:
Look for strategies that will address PSM elements.
Improve ability to develop and implement programs.
Understand risk associated with failures.
Focus resources in areas that pose the highest risk to process safety.
Utilization of risk-based methodology has been applied to improve process
safety initiatives.

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Professional Organization Recommendations

Several professional organizations have made recommendations or


developed publications concerning process safety.
Examples of these organizations are:
American Institute of Chemical Engineers (AIChE)
American Petroleum Institute (API)
American Chemical Council (ACC)
Each of these organizations guidelines:
Contain some aspect of OSHA 1910.119 PSM standard.
Are concerned with preventing catastrophic events.
Strive to ensure the safety of plant employees, surrounding community, and
environmental integrity.
Risk-based Decision Making (RBDM) principles can be found in many
of the guidelines.

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Risk Based Decision Making

RBDM is:
Analyzing the consequence of an event versus the likelihood of the event
occurring (Risk = Consequence x Probability).
Making decisions based on risks associated with these events.
RBDM is not about taking risk, but understanding and managing risk.
Risk-based methodology is discussed in more detail during a later presentation.
RBDM will help focus efforts by:
Determining areas of highest risk, which directly affects the safe and
environmentally-conscious operations of the facility.
Improving utilization of resources by focusing efforts in areas of highest risk.
Eliminating or reducing activities focused in areas with little or no risk.
Professional organizations have begun recommending utilization of
RBDM methodology in areas such as inspection, maintenance, and
safety improvements.

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Risk-based Process Safety

For example, the AIChE created the Center for Chemical Process
Safety (CCPS) in 1985.
CCPS developed a publication concerning Risk-based Process
Safety (RBPS), including 20 elements dedicated to:
Understanding hazards and risk associated with operating a facility.
Focusing limited resources on the areas of highest risk.
Understanding safety culture within an organization.
RBPS does not replace PSM, but can be utilized to enhance and
optimize the PSM process.
RBDM can also be used to optimize other programs, such as
safety, maintenance, materials management, and capital projects.
The most effective companies will integrate their RBDM programs
to:
Reduce duplication of efforts or resources.
Assure each program complements the other.
Utilize the foundations of a continuous improvement process to evaluate
results and improve areas of concern.
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Company Culture

Company culture ultimately determines and affects the overall safety


performance of an individual facility.
Initiatives, such as PSM, National Emphasis programs, and Risk-based
Process Safety, all:
Represent sound practices and principles vital for the safe operation of a facility.
Fall short of assuring the elimination of catastrophic incidents.
On January 28, 1986, the space shuttle Challenger exploded 73
seconds after lift-off.
Investigation of NASA, by presidential commission, indicated
significant weaknesses in safety culture, including:
Tolerance of situations in which production issues overshadowed safety.
Gradual acceptance of faults as being normal, that originally would not be
tolerated.
Can-do attitude based on past success.
Hierarchical structure that limited free exchange of information and credibility of
lower level employees.

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Space Shuttle Challenger Explosion (1986)

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Company Culture and
Safety Performance
Organizations exist with poor safety performance that have excellent:
Written procedures.
Training programs.
Engineering design and safety technology.
Audits of facilities have revealed:
Craftsman performing unsafe tasks directly after:
Completing a job task analysis of work to be performed.
Filling out safety permits outlining safe working procedures.
Procedures for safe start-up of a facility have been bypassed to improve start-up
durations.
Operators trained in proper safe work practices were performing maintenance
task without:
Following line clearing and lock-out/tag-out procedures.
Filling out required permits.

These organizations all possessed similar cultures as discussed with the


NASA incident.

CONFIDENTIAL 19
Effective Safety Culture

Effective safety culture requires:


Strong executive management that sets direction and example for the
organization.
Mid-management that follows safety guidelines, procedures, and assures the
safety of their plant personnel.
Open communication that exists both horizontally and down through the
organization.
Empowering individuals to make decisions, follow safety guidelines, and develop
improvement ideas.
Maintain a sense of understanding that process hazards exist, and personnel
need to be alert to arising concerns
Continuous improvement process is needed to monitor and assess
safety performance and effectiveness of the PSM programs.

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Statistics

Total Recordable Nonfatal Occupational Injury and Illness Incidence


Rates by Case Type, Private Industry, 2003-2006
6
Incidence Rates per 100 Full-Time Workers

5.0
4.8
5 4.6 TRC Total Recordable Cases
4.4
DAFW Days Away from Work Cases
4 ORC Other Recordable Cases

3
2.4 2.3 2.2 2.1
2 1.5 1.4 1.4 1.3
1

0
TRC DAFW ORC

2003 2004 2005 2006

SOURCE: Bureau of Labor Statistics, U.S. Department of Labor

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Closing Comments

Implementation of safety initiatives in the U.S. has evolved during efforts to


eliminate or reduce effects of catastrophic events.
OSHA 1910.119 - Process Safety Standard introduced 14 elements required to
operate and maintain a facility in a safe and environmentally responsible
manner.
Continued catastrophic occurrences produced new National Emphasis
programs to audit facilities for:
PSM compliance
Utilization and effectiveness of PSM programs
Industry began adopting RBDM methodology to refine and optimize PSM efforts.
Safety culture will ultimately determine safety performance.
Strong safety culture is supported by:
Utilization of process safety principles as the core of their safety program.
Understanding and utilizing RBDM methodology to optimize and focus efforts.
Utilizing a continuous improvement process to monitor progress and address
concerns.

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QUESTIONS

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CONFIDENTIAL
Backup Slides

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CONFIDENTIAL
Acronyms

ACC = American Chemical OSHA = Occupational Safety and


Council Health Administration
AIChE = American Institute of PHA = Process Hazard Analysis
Chemical Engineers
PSM = Process Safety
API = American Petroleum Management
Institute
RBDM = Risk Basked Decision
CCPS = Center for Chemical Making
Process Safety
RBPS = Risk Based Process
MOC = Management of Change Safety
NASA = National Aeronautics and SH&E = Safety Health and
Space Administration Environment
NEP = National Emphasis U.S. = United States
Program

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Baker & OBrien, Inc.

Baker & O'Brien, Inc. (Baker & OBrien) is a


professional consulting firm specializing in the petroleum
and petrochemical processing and marketing industries.
The firms consultants have extensive international
experience in constructing, operating, and evaluating
refineries and petrochemical plants.
Our consultants are engineers, many with advanced
business or engineering degrees, and have advised the
worlds largest international oil companies on both
commercial and technical issues. Additional information
about the firm, including a list of representative
assignments and consultant resumes, is provided on our
website at www.bakerobrien.com.

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Contact Information

Dallas Houston
Headquarters Office
12221 Merit Drive 1333 West Loop South
Suite 1150 Suite 1350
Dallas, TX 75251 Houston, TX 77027
Phone: 1-214-368-7626 Phone: 1-832-358-1453
Fax: 1-214-368-0190 Fax: 1-832-358-1498

London
41 Queens Gate Terrace
Suite 4
London, SW7 5PN
Phone: 44-207-823-8967
Fax: 44-207-823-7223

www.bakerobrien.com

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