ABSTRACT
Spill risk information is plentiful: frequency of failure studies, fate and transport modeling, equipment inspection reports, knowledge about the surrounding environment, spill response planning, and much more. The amount of data from a single risk assessment can be staggering. However, the relevant information is often available only to silo groups. How can upper level management identify, assess, and apply the important information to prioritize risk reductions and re-allocate budgets?
As evidenced by recent events, the cost of a spill to a corporation can far exceed the cost of cleanup and remediation. The holistic business cost of spills also includes business interruption, staff effort spent on external and internal communications, causal analysis, assessment of similar facilities, concomitant property damage or business interruption, and the elusive public opinion / resultant regulatory changes. Most of these business risks can be estimated and the major contributors identified using standard tools and a few well-planned databases.
Once the frequency and business cost of spills are quantified and collected in one system (a risk database), management analysis can begin. The risk database should provide a short list of the greatest spill risks: which equipment is involved, the primary causes of the failures, the affected environment, the stakeholders, and a breakdown of the costs.
Workshops can identify a list of potential risk reduction measures. Analyzing each measure at an engineering level would require more staff than are available in a practical sense. To facilitate the process, the corporate-level costs and spill risk benefits can be estimated at a screening level for each practical measure. A screening cost-benefit analysis provides an initial cut at which measures are worthy of further consideration. Detailed engineering, selections, and budgeting follow.
Well executed, this is an effort with large payback. Cost-effective measures to reduce spill risk also improve corporate financials, reduce risk to the environment, and improve public relations. The vital tools are robust risk management systems and processes to collect and display essential information.
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