Petrochem/Utilities Industry Trends

Q&A with Mark Hansen

Issue Table of Contents

The Importance of Workplace Safety Q&A with Mark Hansen Understanding Ergonomics

Mark Hansen is a national director of risk control for oil and gas for St. Paul Travelers and a past president of the American Society of Safety Engineers (ASSE). He has over twenty years' experience in the oil and gas industry in both upstream and downstream processing.

Q: What is the state of workplace safety in the petrochemical industry?
We’ve seen a dramatic decline in the frequency of incidents, but we haven’t seen quite the decline in severity. There has been some decline, but the problem is that in the petrochemical industry, when there is an accident, it’s usually severe. When there is an explosion and a fire in a chemical plant where there are flammables, secondary explosions are more typically likely to occur. Severity has declined somewhat, but they’re still having some accidents, so as a result, anything that happens is severe.

I think the reason that we’ve seen a decline in petrochemical plants is because of the regulatory drivers, such as those associated with process safety management (PSM). PSM really forces you to put controls in place. However, even with a performance standard you can do anything you want. You figure out what you have to do and do it. That’s what a performance standard is, versus a specification standard. A specification standard tells you the “what” and the “how”, whereas the performance standard just tells you the “what” and you figure out how it fits your industry.

Q: How can downstream companies mitigate the risk of injuries occurring on the job?
If I had to pick two elements of process safety management that would help mitigate the risk, they would be mechanical integrity and management of change. With mechanical integrity, we’re dealing with a number of vessels and metal conduits going from one point to another and transferring chemicals from point A to point B. As a result, corrosion and erosion on the inside of the vessels occurs. In this example, mechanical integrity supports the regular management of the thickness of the metal, so that it can undergo certain pressures. That kind of program gives you visibility, so that you are making fixes rather than waiting for something to break down.

This is then coupled with management of change. That means that if I had a type of valve that is used for a particular process and is compatible with certain types of chemicals, when it begins to wear and you identify that it needs to be replaced, you are replacing it with a part that is the same or in-like kind, meaning that it is the same composition and structure. Those two things really help improve what I call keeping the genie in the bottle.

Now, outside of regulatory requirements, it really comes down to the management team’s support and participation. You need to have management buy-in, so that they are participating in the whole program rather than just acting as an observer or spectator.

Q: How do you work with upstream companies to help them mitigate risk?
We go in and do an evaluation of their program and really assess their business culture to see what they’re doing. Upstream is a lot different than downstream because there aren’t as many regulations driving it. There are your typical consensus standards, but there is nothing that from a regulatory standpoint really drives the industry like PSM.

With upstream, you have a lot of people in ones and twos doing business in the oil patch. You don’t have the groups that you have in downstream. For example, in downstream, you might have a plant with 150 people, while in upstream you might have 150 people but they’re all going out to the rig sites doing a particular task, and driving away. That’s where the difference is. It’s easier to manage a group that’s together in one spot, such as in downstream. It’s far more difficult to manage a group that is dispersed over a large area.

We look at formal and informal programs. The smaller companies may have a sketchy formal program, but what we look for in the whole program is if it’s working in the field. That’s the key. If it’s working in the field, that means that the manager is engaged in the business and not just sitting in his or her office.

Q: Do you find that safety programs that work rely a lot on industry standards?
I think they rely on a standard because it points them in the right direction. But every company can implement the same standards in a different way.

Q: Have insurance rates gone down because safety has improved?
Insurance rates typically go up every year no matter what happens. It’s all based on claims and payout histories. There are a lot of factors — the size of the company, revenue of the company, you name it, these are all factors that go into the premium. For example, your premium might go up if you grew your business 100 percent because there’s more exposure now. You’re doing more things then you were last year. So insurance rates typically go up, just like if you bought a hamburger last year it’s going to go up this year. But those with good performance histories and employee controls don’t experience it going up at quite the rate as those that do not.