Oh, now then dears, this is a good question.
Firstly, I always think it helps to define what we mean by risk, because it’s a very badly abused term. At it’s simplest, risk is a computation of the likelihood of harm occurring and the severity of the consequence if it does. It is not the same as ‘hazard’ which is generally defined as anything that can cause harm.
Secondly, because likelihood is a key component of assessing risk, poppets, it doesn’t necessarily follow that an activity with a severe consequence (say, in the event of an accident) is high risk: if the likelihood of things going wrong is very remote, even a high consequence activity might be seen to present a medium or even low risk.
With that in mind, how we do we determine the likelihood of something failing so badly that harm might occur?
Well, partially that can be down to the judgement of loss control and risk management professionals, but they have to base their assumptions on something sweeties. Often, that ‘something’ is past experience – examples of similar operations where something has gone wrong.
This is how insurance companies determine your car insurance premiums: they look back at the type and number of accidents taking place and link this to annual driver mileage in order to arrive at a prediction of how many accidents are likely per mile travelled – which is why they ask you to confirm your annual mileage at renewal time.
With that in mind, pumpkins, what experience do we have of fires and explosions at the UKs existing onshore oil and gas installations? Have you ever heard of an incident involving any of the conventional oil and gas wells such as those operated in the East Midlands by IGas? Or the enormous Wytch Farm facility in Dorset? Or Cuadrilla’s well at Elswick, quietly extracting natural gas since the mid-1990s?
I haven’t, dears, which means that fires and explosions are fortunately very rare. And the targeting of unconventional reservoirs won’t make them any less rare.
One of the reasons for this is the fact that, not only do oil and gas companies here operate to high industry standards, but we have a very stringent regulatory framework overseen by experienced and competent regulators. Relevant regulations include:
The Offshore Installations and Wells (Design and Construction etc) Regulations 1996
The Control of Major Accident Hazards Regulations 1999
The Management of Health and Safety at Work Regulations 1999
The Dangerous Substances and Explosive Atmospheres Regulations 2002
These, and other relevant rules, impose requirements on operators to identify and assess the risks associated with their activities, and to implement risk reduction and mitigation measures so that accidents become less likely and, where they do still occur, less severe.
Going back to our family car, you can see a similar approach my loves: in order to obtain insurance, your car must have a current MoT certificate to prove its road worthiness. This is an example of how legislation requires us to ensure our cars are sufficiently well maintained to be used on the highway – because a car with good breaks, working suspension and appropriate tyre tread depth is less likely to fail in use and therefore less likely to be involved in an accident. Likewise, dears, we also have to obey certain rules of the road (the Highway Code) which you could say are a series of recognised risk reduction and mitigation measures – driving at slower speeds in built-up areas means accidents involving pedestrians are less likely and the outcomes less severe. Taken together, therefore, driving a properly maintained car whilst obeying the speed limit means the risk of accidents is reduced.
In the onshore oil and gas industry, why would operators adhere to these rules and put in place the risk reduction and mitigation measures that are required when these surely make the process of extracting hydrocarbons more expensive and burdensome, I hear you ask? Well, it’s really quite simple my little flowerpots: operators that fail to do so simply don’t obtain the legal permissions they need to carry out their activities. There’s also a more obvious reason: because not doing it right is even more costly – a major incident risks uncontrollable expenditure on accident investigations, increased insurance premiums, legal costs, prosecutions and fines, clean-up and restoration costs, reputational damage and loss of investor confidence.
But then there’s the often overlooked fact that these businesses are run by people. People, just like you and me, that have a strong moral sense of what’s right and wrong, and a desire to protect the people they work with every day.
So, cherubs, with the strong regulatory framework we have in the UK, continued use of industry best practice, a desire to avoid the punitive cost and reputational consequences of failure, and a human instinct to protect people, I think we can safely say the risk of fire and explosion at onshore oil and gas installations is, and will remain, low.
That’s not to say accidents can’t happen, but as the last 40 years of onshore operations have shown, we have a history of doing it safely.
Until next time xxx