Improving Major Risk Management in the Oil and Gas Industry a report by Karlene H Roberts Director, Center for Catastrophic Risk Management and Professor, Haas School of Business, University of California, Berkeley
After the dust settles and the various groups investigating the April 2010 explosion of the Macondo oil well in the Gulf of Mexico have completed their reports, there will still be unanswered questions about the catastrophe’s causes. The final reports are likely to be sprinkled with such phrases as ‘riser and blowout prevention package’, drilling system, well casing, plumes, methane gas, cement seal, top kill, well design, acoustic switch, dead man switch, etc. Yet every major disaster that has been subject to investigation has included often blatant, sometimes subtle, management, organisational and systemic issues, which are every bit as important as the technical issues. Technical problems are caused by people, organisations and organisational systems operating together. That this is true is illustrated by two accidents in very different industries that happened in the same year. Across industries ‘mega-crises’ appear to have similar aetiologies.
concluded that a condensate leak resulting from maintenance work caused the accident. The report indicated that management implemented inadequate maintenance and safety procedures. Later that year, on 12 December, the driver of the British Railways train from Basingstoke to Waterloo came to a signal that abruptly turned red. He stopped and phoned this information to the signalman. He was told to proceed and just as he hung up the phone, he was hit from behind. Then there was a side-on collision with an empty train leaving Clapham Junction, caused by the wreckage of the first collision. Thirty-five people were killed and another 69 were seriously injured. One cause of the accident was incorrect wiring work.2
An Illustration – Two Industrial Accidents On 6 July 1988 the North Sea oil and gas production platform, Piper Alpha, blew up. One hundred and sixty-seven people lost their lives. The Cullen Report1
Looking more closely at these two accidents we find more similarities. The maintenance work that led to the condensate leak on Piper Alpha was probably done incorrectly. The rig’s owner, Occidental Petroleum, used a permit-to-work system. This “is a formal written system used to control certain types of work which are potentially dangerous”.1 maintain safety it is essential that the operating staff follow the written
To
Karlene H Roberts is a Professor at the Walter A Haas School of Business at the University of California, Berkeley. Since 1984, she has been investigating the design and management of organisations and organisational systems in which error can result in catastrophic consequences. She has studied both organisations that failed and those that succeeded in this category. Dr Roberts is a Fellow of the American Psychological Association, the Academy of Management
and the American Psychological Society. She earned her bachelor’s degree in Psychology from Stanford University and her PhD in Industrial Psychology from the University of California at Berkeley. She also received a doctorate honoris causa from the Université Paul Cezanne (Aix–Marseilles III).
E:
karlene@haas.berkeley.edu
procedure exactly. Many errors were found in the permit-to-work process. For example, often several jobs were carried out on one permit. Designated Authorities and Performing Authorities were supposed to act as checks and balances on one another. Appropriate supervision might have reduced or eliminated such behaviour. Occidental provided no formal training on how to operate the permit-to-work system.1
Workers were also fatigued.
The Clapham Junction inquiry found that the faulty wiring had been done by a workman who had been making the same errors for most of his working life. The workman joined the company in 1972 and had very little or no training on wiring signals. Had he received appropriate supervision he might have had such training. The supervisor also failed to check the quality of the workman’s work, thus eliminating a check and balance. In addition, the testing and commissioning person failed to carry out a wire count or ensure that someone else carried it out. Thus “what had originally been a perfectly reasonable system directed toward the safety of the railway and based sensibly on a three-level system of installer, supervisor, and tester, degenerated into a series of individual errors at those three levels of staffing…”2 workers involved had put in significant overtime.
In addition, the
These are not the only similarities between the two incidents. They point to the necessity of examining management issues, e.g., supervision, training, checks and balances, fatigue, etc., in any major catastrophe, regardless of the industry in which it occurs.
The Oil and Gas Industry
A Few Flaws in How the Industry Views Accident Precursors
While managers in the oil and gas industry are sensitive to trying to understand precursors to major catastrophes so they can prevent them, they often fail to consider potential management issues altogether or consider an incomplete set of these issues. As an example, accident prevention strategies often focus on slips, trips and falls. These individually based data points have nothing to do with the huge systemic accidents we see in growing numbers. The appropriate processes to examine are such things as the organisation’s culture, training, supervision, decision-making, communication, etc. It is not enough to say ‘this situation suffered from inadequate supervision’. That statement must be followed by an answer to the question ‘how was it inadequate?’. Focusing on slips, trips and falls solves the wrong problem – sometimes precisely.3
A reason for this is that people tasked
to worry about accident prevention and members of investigative bodies after the accident usually do not have the appropriate training to examine these issues. They are usually engineers. While engineers are required for examining technical features of organisational operation and failure, theirs is not the whole story.
80 © TOUCH BRIEFINGS 2011
HSE
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