Microsoft Word - 1.docx CHEMICAL ENGINEERING TRANSACTIONS VOL. 77, 2019 A publication of The Italian Association of Chemical Engineering Online at www.cetjournal.it Guest Editors: Genserik Reniers, Bruno Fabiano Copyright © 2019, AIDIC Servizi S.r.l. ISBN 978-88-95608-74-7; ISSN 2283-9216 Managing Industrial Safety through a Cost-Benefit Approach: a Case Study Chiara Vianelloa, Maria F. Milazzob, Giuseppe Maschioa,* a Dipartimento di Ingegneria Industriale, Università di Padova, Via F. Marzolo 9, 35131 Padova, Italy b Dipartimento di Ingegneria, Università di Messina, Contrada di Dio - 98166 Messina giuseppe.maschio@unipd.it The safety management of chemical and petrochemical installations is a complex issue. Plant managers have continuously to search for innovative solutions dealing with the prevention of failures and losses of containment from process equipment. To this scope a great support is given by popular standards, i.e. API Risk Based Inspection (RBI) that permits a significant reduction of maintenance costs and, at the same time, the increase of plant's reliability and availability. To support these activities, a software, named Inspection Manager, has been developed in these last year; it allows defining inspection and maintenance programs as it takes advantage from plant-specific data stored in the database. The use of this tool permits a significantly reduction of maintenance costs and, simultaneously, the increase of plant's reliability and availability. Given that, in the context of chemical industry, a proper selection of measures is needed to increase the level of industrial safety and that the adoption of such measures poses costs, a more recent version of Inspection Manager has been integrated by a tool supporting cost-benefit analyses. This paper presents a case-study, which allows a further testing of the functionality of the Inspection Manager tool by using a more complex context compared to the past applications. The case-study is an absorption unit of a refinery, after the identification of the most effective measures, a careful cost-benefit assessment has been executed as a basis for decision-making. 1. Introduction Establishments at major hazard include activities characterised by a considerable level of risk, regarding the large potential for accidents deriving from the loss of control of chemical processes and/or the handling of substances (Palazzi et al., 2017; Fabiano et al., 2017). These activities could lead to the release of hazardous materials and are regulated by the Seveso Directives. Due to this potential, chemical plants are complex systems to be managed, hence performance have to be monitored to avoid major accidents; this can be done by collecting plant data that are continuously verified by control systems (i.e. process variables) (Alhéritière et al., 1998) and/or during inspections (i.e. equipment integrity) (Vintr and Valis, 2007; Bragatto and Milazzo, 2016; Valis et al., 2015). Additionally, plant operators have to adopt proper measures for risk reduction (AlKazimi & Grantham, 2015; Vianello et al., 2018); this latter point requires further efforts because, even if increases in safety investments should result in better safety performance for the plant, economical resources for the company in most cases could be limited (Abrahamsen et al., 2018). In general, safety investments aim reducing the accident probability and injuries, but it must be recalled that the effect of safety investment on safety performance is strongly influenced by safety culture (Ma et al., 2016). In addition, the decision process for the selection of safety measures requires articulated approaches that involves a number of actors (Aven and Hiriart, 2011). Cost-benefit analysis is the approach widely used to support decisions (Reniers & Bris, 2014a) given the easiness in the interpretation of results, even if it a time- consuming method. Based on the safety investment model, the probability of an accident is a function of the amount of investment and the optimal amount of investment is determined by minimising total expected costs (Ma et al., 2016); the model also indicates that there is a point where and additional investment diminishing its return. Unfortunately, the main problem in dealing with cost-benefit analysis is the lack of knowledge about costs of accidents; this is due to the misunderstanding that these are believed to be insured and not as part of DOI: 10.3303/CET1977006 Paper Received: 24 February 2019; Revised: 25 May 2019; Accepted: 17 June 2019 Please cite this article as: Vianello C., Milazzo M., Maschio G., 2019, Managing Industrial Safety through a Cost-Benefit Approach: a Case Study, Chemical Engineering Transactions, 77, 31-36 DOI:10.3303/CET1977006 31 the financial situation of the company (Gavious et al., 2009). Thus, costs of accidents are limited to the direct costs whereas, as pointed by Adnett & Dawson (1998), indirect accident costs should also be included in order to correctly compare costs and benefits. Given that cost-benefit analyses are highly time-consuming, numerous approaches and tools supporting the process have been developed (Reniers and Brijs, 2014b), especially in the chemical and petrochemical industry. To this purpose, a recent developed tool is the software Inspection Manager, developed by ANTEA and implemented during a cooperation with the University of Padova (Vianello et al, 2013). It can be easily used to define inspection and maintenance programs, based on Risk Based Inspection analysis RBI (American Petroleum Institute, 2016) and taking advantage from the plant-specific data that are stored in the database (Vianello et al., 2016). Furthermore, a more recent version allows supporting cost-benefit analyses by means of a proper module (Vianello et al., in press). This paper presents a further validation of the last version of the software Inspection Manager. Compared with the previous testing (Vianello et al., 2018), a more complex case-study has been used to apply the cost- benefit analysis for the selection of some risk reduction measures or to proceed with their replacement with others that. The case-study is an absorption unit of a refinery, where hydrogen is purified at high level of purity. 2. Methodology To understand if an investment is an efficient use of the resources of company, a comparison costs and benefits has to be carried out. In the context analysed by this paper, i.e. the safety management in chemical industry, the investment refers to safety measures; therefore. a cost-benefit analysis support in understanding the level of distribution of benefits and costs associated to the investment in selected safety measures. This information helps the plant operator in decision-making. The approach of cost-benefit analysis has been integrated by Vianello et al. (2018) as a further module in the software Inspection Manager; it is based on criteria proposed by the API Risk Based Inspection (RBI) document (American Petroleum Institute, 2008), which are schematised in the Figure 1. However, the software support the comparison also with other models that have been proposed for cost-benefit analysis. Figure 1. Steps of the methodology implemented in the Inspection Manager software (American Petroleum Institute, 2008). 2.1 Cost-benefit analysis The cost and benefit analysis is a time-consuming procedure because it requires the collection of a large amount of data. To perform this analysis, different models are available, such as the RBI methodology and the model proposed by Gavoius et al. (2009). A comparison between the methods has been made by Vianello et al. (2018, in press) to highlight how to improve the conduction of the analysis by the support of the Inspection Manager software. A summary of the differences identified by comparing the models is given in Table 1. The general model for the quantification of cost is given by the following equation: RBI Analysis - Probability assessment - Consequence assessment - Risk assessment Item's Prioritisation - Items' prioritisation - Identification of critical items Selection of risk reduction solutions - Prevention measures - Mitigation measures Cost-benefit analysis - Prioritisation of measures - Choice of the best solution 32 (1) where the total cost is the sum of direct costs (Cdirect), indirect costs (Cindirect), other payments (Cpayment) and immeasurable costs (Cimmeasurable). The details about the calculation of each single factor has not been given in this contribution as it is widely reported in the literature (Gavious et al., 2009, American Petroleum Institute, 2016). Table 1. Comparison between models for cost estimation Model of Gavoius et al. API 581 model Description Cdamage FCCMD, FCAFFA FCENV Cost for equipment repair and replacement Cost for environmental clean-up Cmedical FCINJ Cost due to potential injuries associated with failure Cfine Not included Cost for fines Cinsurance Not included Cost for insurance Ccapacity lost, Cschedule, Crecruit, Cwip FCPROD Costs associated with production losses and business interruption Cwork time FCINJ Cost due accident investigation Cmang Not included Costs for the CEO time payment Cpayment Not included Refund Cimmeasurable FCINJ Cost due loss reputation 3. Case-study The information that allows the conduction of the RBI assessment for the case-study, as well as the cost- benefit analysis, have been stored in the Inspection Manager. The analysis has been applied to process of production of hydrogen with a high purity of a refinery, which is summarised in Figure 2. In particular, the focus of the analysis has been on the hydrogen separation unit (PSA), in which high purity hydrogen (> 99.5%) is obtained by separating impurities with six columns of adsorption. The columns are subsequently regenerated by reducing the pressure with the consequent desorption of the impurities. The separated off-gas is used as the primary fuel in the reforming section. The characteristics of the column are shown in Table 2. Figure 2 Block diagram Table 2. Absorption column characteristics Data Value Data Value Diameter [mm] 1650 Material Carbon steel (A516) Length [mm] 5190 Installation equipment data 1997 Furnished thickness [mm] 20 Data of last inspection 2010 Operating Pressure [barg] 23 Level of inspection effectiveness Usually effective Operating Temperature [°C] 40 Corrosion allowance [mm] 3 Design Pressure [barg] 26 External environmental Temperate Design Temperature [°C] 100 Intial fluid phase gas By means of the Inspection Manager, the following damage mechanisms have been highlighted for the columns: external corrosion and thinning damage. These are necessary to modify the generic frequency of failure of the equipment by means of a proper factor for the deterioration mechanism. A managerial factor has also to be included in order to take into account the influence the management system (Milazzo et al., 2013). Two values for this factor have been accounted for to quantify its influence on the calculation of the event probability: 33 • the high value (score = 1000) equates to achieve excellence in process safety management; • the low value (score = 500) corresponds to an average level in process safety management. Given that hydrogen is a highly flammable substance, the incidental scenarios that follow the release, due to the equipment failure, are a fire and an explosion. The consequence assessment has been done according to the empirical equations of (American Petroleum Institute, 2008). The release modelling quantifies the extent and duration of the flammable dispersion; these parameters are corrected based on the adoption of detection, isolation and mitigation systems. These affect the release in several modes, i.e. by reducing its magnitude and duration, by detecting and isolating the leak or by reducing the consequence area through the minimisation of the chances for ignition or limiting the spread of material. In consequence assessment, the six columns are considered to contain the maximum quantity that can be inventoried in the equipment and the whole system has been considered a single circuit. To make a comparison between costs and benefits associated with the equipment repair or replacement after the accident, several data are needed, some of them are given in Table 3. Table 3. Cost for financial analysis Cost Value Reference Equipment [$] 11,863 Towler and Sinnott, 2013 Lost production [$/day] 992,300 Ramsden et al., 2007 Serious injury of fatality of personnel [$] 2,200,000 HSE cost to Britain Moddel Environmental clean-up [$/m3] 680,000 Métivier et al., 2017; Ramsden et al., 2007 To carry out a financial analysis, the equipment cost is evaluated with the correlation proposed by Towler and Sinnott (2013); the cost associated with the production losses and business interruption is quantified to the cost associated with lost production due to shutdown facility and then it is necessary determine the product cost. By assuming a product capacity for the plant equal to 100,000 Nm3/h and a material cost of 4.6 $/kg for H2 (Ramsden et al., 2007), the estimated cost is 992,300 $/day. As proposed by the “HSE cost to Britain Moddel” website, the estimated cost of potential injuries and ill health is equal to 2.2 Million $. Given that the released substance is in gas phase, there is not a direct environmental contamination due to a liquid spill. Nevertheless, hydrogen contributes to the environmental impact as it is a greenhouse gas, for this reason the cost associated with environmental cleaning has been considered in term of cost deriving from the equivalent CO2 emissions due to the hydrogen production plant (Métivier et al., 2017; Ramsden et al., 2007). 4. Results The generic failure frequency of the column is equal to 3.06·10-5 event/year (data from the Safety Report). The resulting damage factor (FMS) and probabilities of failure, calculated by considering damage and management system factors, are summarised in Table 4. Table 4. Probabilities of the event for the case study Management system factor Total Damage factor FMS P [failure/years] Probability Category High value 3 0.1 9.18·10-6 1 Low value 3 1 9,18·10-5 2 To define how prevention and protection measures act, several cases have been studied: case 1 represents the absence of prevention and mitigation systems; case 4 represents the greatest influence on the consequences by detection, isolation and mitigation system; from case 1 to case 4, the adoption of safety measures as the effect of an increasing reduction in magnitude and duration of release. According to the RBI methodology, the results are expressed as a consequence of the damage to the equipment (CMD) and consequently on the people (INJ), in relation to the different threshold limits (Table 4). Figure 3 shows a visual representation of the consequence results CMD (see Table 5) by means of risk matrixes. Table 6 shows the result of the financial consequences analysis for cases 1 ÷ 4. It can be observed that the increased reduction of the release by means of the safety measures reduces the financial costs due to the accident. By considering only the cost of the installation of the mitigation systems, see in the Table 7 (Janssens et al., 2015), it is possible to identify a point that represents a compromise between the investment and the benefit that derive from the adoption of safety measures (Figure 4). This is a valid support in make decisions aimed at the improved of safety. 34 Table 5. Consequence results Consequence Case 1 Case 2 Case 3 Case 4 Component Damage Consequence - CMD [m2] 65.14 44.80 36.23 30.97 Injury consequence - INJ [m2] 310.98 152.83 123.78 105.49 Final consequence - CA = max(CMD, INJ) [m2] 310.98 152.83 123.78 105.49 Table 6. Financial consequence results Case 1 Case 2 Case 3 Case 4 Financial consequence [M$] 27.60 21.57 20.07 19.08 Table 7. Mitigation systems cost System Case 1 Case 2 Case 3 Case 4 Mitigation fire water monitoring only fire water monitoring only fire water deluge system and monitoring Inventory blowdown, coupled with isolation system activated directly from process instrumentation or detectors or by operator in the control room Cost K$ 25 25 200 500 Figure 3 Risk matrix: (●) low value of management system factor, () high value of management system factor. Figure 4 Financial consequences versus mitigation system costs. 35 5. Conclusions The use of the Inspection Manager software, integrated with a tool for cost-benefit analysis, supports the analysis of complex case-studies because it allows simplifying the work of the industrial manager through a simple management of plant-specific data. 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