This document discusses four measures of risk: (1) Individual Risk, which is the probability of a person becoming a fatality within a defined period; (2) Location Specific Individual Risk, which is the likelihood of a fatality at a particular location based on continuous exposure over a year; (3) Potential Loss of Life/Societal Risk, which represents the aggregation of individual risk levels for all exposed persons; and (4) Implied Cost to Avert a Fatality, which is derived from the cost of a risk reduction measure divided by the estimated risk benefit. The document cautions that risk criteria and numbers should be used as a tool to inform arguments rather than provide ultimate answers, and recommends transparent,

1. Risk Criteria
Where the Answer Lies
Troy Millen - Principal Safety & Risk Engineer
November 2016

2. Why Do We Quantify Risk?
• Compliance with internal
policies/standards
• Regulatory requirement
• Aids decision making
• People like numbers!

3. But can we trust the numbers
that are generated?

4. 4 Measures of Risk
1 2Individual Risk
Per Annum
Location Specific
Individual Risk
3 4Potential Loss of
Life/Societal Risk
Implied Cost to
Avert a Fatality

5. Individual Risk1.

6. • Derived values can be compared against real-
world measures of risk (e.g. the road toll)
• A key criteria where many organisations will
have defined tolerability levels
Individual risk is the probability that, within a
defined period of time (or for a defined activity),
a person will, sadly, become a fatality.

7. • Can be reduced by “sharing” the risk
across a larger population (but absolute
risk stays the same)
• Transient work forces (e.g. drilling) may
only have a small percentage of their
annual risk accounted for.
Strongly influenced by the amount
of time at exposure

8. Location Specific
Individual Risk
2.

9. Location Specific
Individual Risk is the
likelihood that a fatality
would occur at a
particular location,
based on continuous
exposure over a
calendar year.

10. 1
Published exposure criteria
available based on land use
(e.g. HIPAP 4).
2
Typically represented as contours
of constant risk, overlaid on a
facility/area plan.

11. • At low level typical of offsite criteria, the error
margin is large.
• Criteria relies on “average” industry values
(e.g. failure rates)
• Key factors of influence include:
• Hole size distribution
• Release orientation
• Weather conditions
• Time of exposure (for fatality probits)
• May not accurately reflect the risk of low frequency
transient operating modes

12. Potential Loss of
Life/Societal Risk
3.

13. Represents the aggregation of the individual risk level
for all persons exposed to a particular hazard or facility.
• Can be displayed as societal (f-N) risk
curves
• Facility size impacts results
• How do we define the basis for:
• Grouped assets
• Pipelines

14. Implied Cost to
Avert a Fatality
4.

15. Derived from the cost
to implement a risk
reduction measure,
divided by the
estimated risk benefit.
Requires a dollar value
to be placed on life
Can be easy to manipulate
a “do nothing” outcome

16. Risk criteria
case studies

17. 1. Hiding from Risk
Process risk based on a parts count, and assumes
component failures are randomised.
Facility risks are low, premised on infrequency of visits.
This approach ignores:
• Human influence on component failures
• Personnel presence at other facilities
The issue is compounded when assets
span multiple regulatory regimes
(e.g. offshore platform and onshore plant)

18. Water treatment utilising chlorine gas is delivered from
a bank of one tonne drums.
Risk contours were directly impacted by the number of
drums online, and the number stored at the facility.
Reducing the drum bank/storage reduced LSIR
contours.
But frequency of truck delivery (down
a steep gravel road) increased!
2. Truckload of Risk

19. Client standard required that no Major Accident Event
(MAE) impaired key safety systems above a target
frequency.
• Client standard did not provide a definition of a MAE.
• Initial assessment had MAE (process release) exceeding
requirement.
Revision of MAE definition
(Jet Fire, Pool Fire, Explosion)
lead to compliance with criteria.
3. Cutting it Fine

20. Approach

21. To survive post-event scrutiny, numerical analysis
should be used as a tool to inform risk arguments,
not considered to provide the ultimate answer.
Be transparent, and
avoid black-box
approaches.
Use a combination
of Quantitative
AND Qualitative
approaches.
Make conservative
assumptions, and
refine as required.

22. Understand the factors
driving risk results.
Explore sensitivity to key
assumptions, and provide
justification for their use.
Be aware of risk trade-off - look
beyond the study scope to avoid
risk transfer.

23. DISCLAIMER
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