The Pitfalls of Risk Based Inspection: an Insurer’s View of the Chevron Richmond and Tesoro Anacortes Incidents

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Risk Based Inspection (RBI) is a tool that has been with us now for several decades. There is no question that when applied well, it allows for an improvement in the effectiveness of the inspection programmes across large and small organisations. However, incidents continue to occur and consistent themes remain, nearly always related to the failure to maintain the asset sufficiently to prevent hydrocarbon escape and ignition. This is the result of common pitfalls, which I see in my travels around the globe to review the risks posed by the businesses that we insure.In both of the incidents described in this presentation pitfalls in the implementation of RBI are present, although, as is always the case, several other contributing factors led to the catastrophic outcome. I am going to focus on the RBI shortcomings that contributed to these incidents, in order to try to encourage operators to build more rigour into their programmes. This is particularly critical in a time of aging assets and plummeting oil prices, a “double whammy” that has insurers in this market profoundly nervous.At Chevron inappropriate deferment and inadequate depth of inspection on a crude distillation tower outlet pipe led to a rupture of that pipe, a fire, and several personnel injuries. The cause of the rupture was primarily caused by a failure to identify extensive sulphidation corrosion in the pipework in question, despite several previous test results showing damage was occurring elsewhere in that pipe section.At Tesoro a narrow focus of the RBI programme and a lack of willingness to investigate seemingly low risk equipment led to the catastrophic failure of a heat exchanger, a fire, and seven deaths. The American Petroleum Institute (API) issued a warning in 2011 about the use of Nelson curves and although it is recognised that this warning came after this incident the US Chemical Safety and Hazard Investigation Board (CSB) report has cited at least eight separate incidents within the industry where high temperature hydrogen attack (HTHA) had been found in equipment supposedly operating within the “safe” zone of these curves. The Nelson curves themselves are based on empirical industry experience only, with no scientific or research data to support them. With this information, while we can always be considered smarter in hindsight, it would appear that not inspecting the equipment when it was operating quite close to the Nelson curve was a mistake.With more rigour in the RBI programme these incidents may have been avoided. RBI is not a way of saving money, although if done correctly it may do so. RBI is designed to ensure continuing safe operation and validate asset integrity programmes. It is about fitness for purpose. RBI is a way of prioritising inspection activities to those containing the highest risk. It is a way of ensuring that, in an atmosphere of finite resources, lower risk items do not wait another year, or indefinitely. I have seen many dubious applications of RBI, and these can be down to many factors, well represented in both examples reported here.