Understanding How Lifting the US Crude Export Ban Impacts Safety

In an effort to curb dependence on crude oil impacts such as the Arab oil embargo, in the 1970s the US government restricted the export of crude oil.  According to various reports, in 1973, total US petroleum consumption for oil and product imports was 35%, which by 2005 grew to over 60%. As more efficient and better drilling and producing technology was introduced to the market, significantly more recoverable oil reduced US’s import dependence. The ramp-up of US production spurred a wave of pipeline, refinery and chemical plant development. The “shale boom” further saturated the market with an oil surplus that has provided refiners with a healthy margin boosts from the discounted light crude oil.

By 2014, the import percentage dropped to nearly 25%. Over the past several years, lobbyists and companies have been promoting the benefits of lifting the crude export ban as a boost to the US economy as it would increase oil and gas production and generate additional jobs and capital investments. Earlier this year, the US government lifted the crude export ban.

Refiners could be one group that faces economic downsides by losing some of their margins associated with the “discounted” light crude oil. In addition, refiners will still need to meet increasing demand and invest in plant modifications. Additional throughput on aging assets and bringing new assets online pose challenges to process and personnel safety as well as require additional attention from operations, engineering and reliability/maintenance to ensure safe operating conditions.

Process safety management (PSM) has been a part of the industry for over 20 years; however, major incidents such as fatalities and releases are still occurring, and this additional operating risk further justifies the need to evolve PSM to ensure safe operating conditions. PSM is a mixture of engineering and operations management focused on preventing catastrophic accidents. It is one part personal accountability for safe conditions and two parts an overall management system to prevent dangerous operating conditions and empower the right actions to be taken.

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In risk management, when multiple risks exist, the impact and likelihood can also increase as extra diligence and attention is required to mitigate a serious incident. Examples of likely multiple risks refiners may face include:

  • Improved plant run times and operating outside of normal parameters
  • Increased maintenance activities
  • Decreased spending on proactive, planned maintenance
  • Lack of time and resources to update equipment and plant data
  • Overtime and site congestion with construction
  • Gaps with trained and experienced personnel

While all elements of PSM are important, several components stand out as critical.

Asset integrity and reliability programs: Successful asset integrity and reliability organizations must effectively collaborate to maintain plant reliability and consistency and develop proactive, measureable programs to stay ahead of the curve.

Management of Change (MOC) and process safety information: Effective MOC programs, which are formal processes that monitor the impact of a change to the safety, are dependent on the quality and access to information on which sound decisions are made.

Contractor safety management: Contractor safety management is a vital component of managing outsourced workforce, particularly as owners and operators are faced with additional process and personnel safety regulations and standards. It involves multi-faceted and ongoing assessments, stakeholder engagement and reporting for accountability and improvement.

Training and communication for system think: System think is an understanding of how disparate programs for systems influence or depend upon one another within an organization. Training and communication on system think approaches and impacts can mature a silo-based culture to a holistic, safe and reliable organization.

To read detail on how these four (4) components can be improved to better impact your organization, please see Katherine K. Molly’s article published in Hydrocarbon Processing, May 2016 edition. A paid subscription is required.

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