Fire damages overhead cable distribution system. M-M. Fireproof cable tray in fire hazardous areas. Not required. Flood waters damage. Standby Generator.
Business Continuity and Disaster Management for Industrial Installations 2013 Petroleum and Chemical Industry Committee Technical Conference Chicago, IL - September 23-25, 2013
Authors • Paul “Eddie” Guidry - FLUOR • David Vaughn - FLUOR • Richard P. Anderson, Jr., P.E. - FLUOR • Janet Flores - Rockwell Automation
Business Continuity and Disaster Management for Industrial Installations
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IEEE IAS PCIC 2013
Researchers at Rice University found that had (Hurricane) Ike (Sept. 13, 2008) struck slightly further West on Galveston Island it would have… • Inundated scores of chemical plants and refineries • Shut down the source of 40% of the nation's jet fuel • Lost ≥ 27% of the nation’s gasoline production • Lost 42% of the nation’s chemical feed stocks Source: Houston Chronicle June 2, 2013 Business Continuity and Disaster Management for Industrial Installations
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IEEE IAS PCIC 2013
To stay competitive risks must be managed • Impact to physical facilities is minor when compared to the cost impact measured in terms of Business Interruption • Impacts from events can be very devastating ▫ Japan 2011 earthquake and tsunami ▫ Super Storm Sandy 2012 ▫ Oklahoma City 2013 tornado
▫ Drought, wildfire, flooding, severe storms, etc 1. Nearly all of these risks are known 2. Risk models have been developed to predict these risks 3. Plans can be made to counter the negative effects
Business Continuity and Disaster Management for Industrial Installations
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U.S. Natural Disaster Map
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Have We Learned From Natural Disasters?
2,000,000
Number of people killed
4,000,000
Number of people killed by natural disasters 1900-2011
0
1900
1950
2010 EM-DAT: the OFDA/CRED International Disaster Database – www.emdat.be – Universite Cathollque de Louvain. Brussels - Belgium
Business Continuity and Disaster Management for Industrial Installations
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Have More People Been Affected by Natural Disaster in Recent Years? Number of people reported affected by natural disasters 1900-2011
Number of people reported affected
700 MM
400 MM
100 MM 0
1900
1950
2010 EM-DAT: the OFDA/CRED International Disaster Database – www.emdat.be – Universite Cathollque de Louvain. Brussels - Belgium
Business Continuity and Disaster Management for Industrial Installations
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IEEE IAS PCIC 2013
Has There Been an Increase in Natural Disasters in Recent Years? Natural disasters reported 1900-2011
Number of disasters reported
550
400
EM-DAT created (1988) CRED created & OFDA began compiling (1973) 200
OFDA created 1964
0
1900
1950
2010 EM-DAT: the OFDA/CRED International Disaster Database – www.emdat.be – Universite Cathollque de Louvain. Brussels - Belgium
Business Continuity and Disaster Management for Industrial Installations
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IEEE IAS PCIC 2013
Has Damage from Natural Disasters Increased in Recent Years? Estimated damage (US$ Billions) by natural disasters 1900-2012
Estimated damage (US$ Billions)
Honshu Tsunami 350
Hurricane Katrina Wenchuan Earthquake 200
Kobe Earthquake
0
1900
1950
2012 EM-DAT: the OFDA/CRED International Disaster Database – www.emdat.be – Universite Cathollque de Louvain. Brussels - Belgium
Business Continuity and Disaster Management for Industrial Installations
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0
1900
1950
Business Continuity and Disaster Management for Industrial Installations
2010 10
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Number of people reported affected
100MM
200 400 Number of disasters reported
200K
0
Number of people reported Killed
500K
500
Natural disaster summary 1900-2011 (linear-interpolated smoothed lines)
250MM
How Has The Death Rate Dropped While The Number of Natural Disasters and The Affected Population Have Increased?
Industry Densities vs. Earthquake and Hurricane Hazards
Business Continuity and Disaster Management for Industrial Installations
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Hazard Modeling – Hurricanes Do You Understand The Impact of a Natural Disaster?
Sustained Winds
Business Continuity and Disaster Management for Industrial Installations
Displaced Households
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Hazard Modeling – Earthquakes
Magnitude 6.8 Earthquakes
Business Continuity and Disaster Management for Industrial Installations
Bridges with Moderate Damage
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National Standards What are the U.S. National Standards for Business Continuity and Disaster Management?
Overview Presidential Policy Directive 8 (PPD-8) National Planning Frameworks
Business Continuity and Disaster Management for Industrial Installations
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National Preparedness System (NPS) The New and Improved Preparedness Cycle under PPD-8 Threat Hazard Identification and Risk Assessment (THIRA)
Remedial Actions
Exercises
Planning
Community Prep
Validating Capabilities
Planning to Deliver Capabilities
Identifying and Assessing Risk
Reviewing and Updating
Building and Sustaining Capabilities
Estimating Capabilities Requirements
Assessments
Organize and Equip (NIMS!)
Training Business Continuity and Disaster Management for Industrial Installations
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IEEE IAS PCIC 2013
Private Sector and NGOs and The Frameworks Effective, unified national response requires layered, mutually supporting capabilities • The Private Sector supports community response, organizes business to ensure resiliency, and protects and restores critical infrastructure and commercial activity • NGOs performs vital service missions ▫ Assists individuals who have special needs ▫ Coordinates volunteers ▫ Interfaces with government response officials at all levels
State & Tribal Governments
Local Governments
NPFS Federal Government Business Continuity and Disaster Management for Industrial Installations
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Private Sector & NGO
IEEE IAS PCIC 2013
NFPA 1600 – Standard on Disaster / Emergency Management and Business Continuity Programs Why? •American National Standards Institute (ANSI) has adopted NFPA 1600 as the voluntary standard for private industry (Davis, 2005) •Department of Homeland Security (DHS) references NFPA 1600 directly in Presidential Policy Directive (PPD-8) What? •NFPA 1600 - 2010 is a Standard on Emergency Management, Disaster Management, and Business Continuity Programs •The result is a single integrated approach. NFPA calls this a "Total Program Approach"
Business Continuity and Disaster Management for Industrial Installations
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NFPA 1600 – Overview According to the new NFPA 1600 standard, a Business Continuity Program must include: • Prevention Phase ▫ Vulnerability Assessment ▫ Risk Management
• Mitigation Phase • Preparation Phase • Response Phase • Recovery Phase
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Planners Versus Non-Planners • Companies must recognize that unforeseen events can severely disrupt business operations.
• Oxford Metrica1 study states that there was a 22 percent positive difference in stock price for those companies that invested in pre-planning of recovery activities. 1
The Impact of Catastrophes on Shareholders Value by Rory F. Knight and Deborah J. Pretty. Templeton College of Oxford University, 1996. A research report sponsored by Sedgwick Group, from the Oxford Executive Research Briefings series from Oxford University.
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The Impact on Shareholder Value Non-Planners
Planners
20 15
Value Reaction (%)
10 5 0 -5
-10 -15 -20 0
20
40
60
80
100 120 140 160 180 200 220 240 Event Trading Days
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What Have We Learned?
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What Do You Need To Know To Start Planning? • Recovery Time Objective (RTO) ▫ How long can your operations be off-line? ▫ Do you have any single points of failure? ▫ Is redundancy built into your production process?
• Threat Hazard Identification and Risk Assessment (THIRA) ▫ Have you identified all of your threats? ▫ What size threat do you use for planning purposes? ▫ Likelihood - Probabilistic vs. Deterministic approaches Business Continuity and Disaster Management for Industrial Installations
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Relationship Between RTO, Threat and Cost to Mitigate
x105
Cost
Annual Cost
2.5 2.0 1.5 1.0 0.5 0 20
40
RTO
60
80
100 120
Business Continuity and Disaster Management for Industrial Installations
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2
4
3
5
6
Threat 23
IEEE IAS PCIC 2013
Resiliency Model
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Dimensions of Resiliency 1. Governance 2. Financial 3. Facilities 4. Security 5. Logistics 6. Equipment 7. Employees 8. Infrastructure 9. Critical Utilities 10. Communications 11. Information Technology 12. Supply Chain Management Business Continuity and Disaster Management for Industrial Installations
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Just An Engineer…
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This Part of The Presentation Will Cover: • Purpose of Risk Assessment • Goals of Risk Assessment • Method of performing a Risk Assessment for an electrical installation • A sample Risk Assessment
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Purposes of Risk Assessments • To determine which types of hazards need to be analyzed • To determine how the hazards could impact the facility • To come up with a written plan on how to deal with the hazards • To implement the plan that was developed
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Goals of Risk Assessments • Prevent injury or death • Protect the environment • Protect local, state, and national economies • Continue to meet the customer’s needs • Prevent loss of revenue and loss of income
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Basic Steps for Performing Risk Assessments • Identify the Hazards • Assess Vulnerabilities • Perform Impact Analysis • Determine Prevention, Mitigation and Response to Risks • Prepare Recovery Plans
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Identification of Hazards • Determine which hazards will be analyzed • Consider hazards that could occur external to the facility • Use the Hazards Checklist for Electrical Installations in Industrial Locations
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Hazards Checklist For Electrical Installations In Industrial Locations • The Hazards Checklist lists of different types of hazards that may analyzed • General categories and examples are ▫ Natural Geological Hazards – Earthquake or Tsunami ▫ Natural Meteorological Hazards – Hurricane or Snowstorm ▫ Electrical Specific Hazards – Arcing Fault or Animal in Equipment ▫ Accidental Events – Hazardous Material Leak or Transportation Accident ▫ Other Human Caused Events – Vandalism or Terrorism
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Assessing Vulnerabilities • Assess the facility vulnerabilities to the hazards • Use the Risk Assessment Checklist For Electrical Installations In Industrial Locations
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Risk Assessment Checklist For Electrical Installations In Industrial Locations • The Risk Assessment Checklist lists who and what might be at risk • General categories and examples are: ▫ People – Employees or Community ▫ Electrical Systems – Utility Power or UPS ▫ Operations – Production or Administration ▫ Environment – Land or Air
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Performing Impact Analysis • Analyze the impact of the hazards being evaluated on the assets being evaluated • Base the analysis on the mitigation techniques that are currently in place • Develop the Risk Assessment Matrix for Electrical Installations in Industrial Locations
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Simplified Risk Assessment Matrix for Electrical Installations in Industrial Locations Hurricane
Flood
L
Process Area Fire
Probability of Occurrence during plant life
H
Assets At Risk:
Impact Analysis (Probability-Severity)
Incoming Utility Power
H-H
M-H
L-H
M-L
Main HV Substation or Switchyard
H-H
M-H
L-H
M-L
Standby Generator
H-M
M-M
L-M
M-L
Grounding System
H-L
M-L
L-L
M-L
Overhead Cable Distribution System
H-L
M-L
L-L
M-M
Business Continuity and Disaster Management for Industrial Installations
M
Vandalism
M
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IEEE IAS PCIC 2013
Determine Prevention, Mitigation and Response to Risks • List all of the scenarios from the Risk Assessment Matrix in the Risk Mitigation/ Risk Response Plan • Explain in detail the how the hazard can impact the facility • Use the Risk Assessment Matrix and judgment to place the scenarios in order • Place the scenarios which are in the most need of prevention or mitigation at the top of the list
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Simplified Risk Mitigation / Risk Response Plan Hazard and Scenario
Severity Rating with Existing Mitigation
Additional Risk Prevention or Mitigation
Risk Response Plan
Hurricane downs Utility Company power lines into facility
H-H
Discuss with Utility Company
Develop a plan to provide temp power from other nearby HV switchyard
Fire damages overhead cable distribution system
M-M
Fireproof cable tray in fire hazardous areas
Not required
Flood waters damage Standby Generator
M-M
None
Determine where rental unit can be obtained
Vandals damage Main HV Switchyard
L-H
Install better fence and security cameras
No
Vandals damage grounding system
L-L
None
No
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Prepare Recovery Plans • Facility Recovery Plan (FRP) – a site specific plan to bring the affected facility back on-line in the shortest period possible ▫ Includes the Risk Mitigation / Risk Response Plan ▫ Includes execution plans, drawings, and cost estimates ▫ Includes a timeline for implementing the prevention or mitigation measures
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Why is Grounding on the Risk Assessment?
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Example of Risk Assessment / Mitigation • The facility in this example and the risk assessment are fictional • Any similarity to a particular facility is purely coincidental
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Facility Description • Gulf Coast Refinery within 100-year floodplain • Original refinery in operation for 25 years • Refinery expansion was built a few years ago • AHJ has determined refinery is vital to national economy • Each day of lost production costs $1,500,000
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Steps Taken • Comprehensive risk assessment of the electrical systems is performed • Prevention or mitigation recommendations are developed where cost effective • Formal response plans are developed for unmitigated risks
Business Continuity and Disaster Management for Industrial Installations
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Finding: Facility Recovery Plan (FRP) Has Not Been Updated Recently • Prevention / Mitigation: ▫ FRP to be updated annually ▫ Hard copy and soft copy of FRP to be kept in multiple locations
Business Continuity and Disaster Management for Industrial Installations
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Finding: Flood Can Damage Transmission Lines Into Original Refinery • Details: ▫ Lines feeding original refinery are routed along a river road which has already flooded many times ▫ Utility company plans to reroute the lines eventually • Prevention / Mitigation: ▫ Refinery Management to discuss NFPA 1600 and PPD-8 with utility company and request reroute ASAP ▫ Include a recovery plan to provide temp power to the original refinery, from the new refinery Business Continuity and Disaster Management for Industrial Installations
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IEEE IAS PCIC 2013
Finding: 138kV Switchyard is Close to Public Road and Has a Normal (not hardened) Chain Link Fence • Details: ▫ Terrorism and vandalism are risks ▫ Too expensive to move switchyard
• Prevention / Mitigation: ▫ Build a NEW hardened fence
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IEEE IAS PCIC 2013
Example of Better Fence Concertina Wire
Wire reinforcement Bollards Business Continuity and Disaster Management for Industrial Installations
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IEEE IAS PCIC 2013
Finding: Interior of 138kV Switchyard Relay / Meter Building Floods Periodically • Prevention / Mitigation: ▫ Install a new elevated relay / meter building
Flood line watermark
Business Continuity and Disaster Management for Industrial Installations
Close-up of flooding watermark
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IEEE IAS PCIC 2013
Finding: Hurricane Vulnerability • Details: ▫ Widespread damage to the facility could occur ▫ Materials and labor could be difficult to secure after a hurricane
Business Continuity and Disaster Management for Industrial Installations
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IEEE IAS PCIC 2013
Finding: Hurricane Vulnerability • Prevention / Mitigation: ▫ Blanket purchase orders ▫ Service agreements with local, regional and national E&I installation contractors ▫ Review business continuity plans for suppliers and contractors ▫ Insure the suppliers and E&I contractors can accept hard copy (paper) releases ▫ Define signature authority for above ▫ Integrated change management system in place Business Continuity and Disaster Management for Industrial Installations
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IEEE IAS PCIC 2013
Finding: Additional Mitigations • Prevention / Mitigation: ▫ Set up Mutual Aid Agreements with local companies ▫ Mutual Aid Agreements typically include
Obligation of the Parties Reimbursement Duration of Agreement Severability Effective Date
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Summary • Disasters cause billions of dollars of damage every year • The 9/11 Commission formerly recommended the adoption and use of NFPA 1600: “…Private-sector preparedness is not a luxury; it is a cost of doing business in the post-9/11 world. It is ignored at a tremendous potential cost in lives, money, and national security." • PPD-8 requires a national preparedness system • FEMA adopted NFPA 1600 as a voluntary standard • Companies, employees, and national economy are the real beneficiaries of BCDM • All disciplines should perform Risk Assessments
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Just An Engineer…
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Questions?
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