Pipeline risk management manual

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Pipeline

Risk Management

Manual

Ideas, Techniques,

and Resources

Third Edition

Pipeline Risk

Management

Manual

Ideas, Techniques,

and Resources

Third Edition

W. Kent Muhlbauer

AMSTERDAM. BOSTON - HEIDELBERG * LONDON * NEWYORK - OXFORD

PARIS * SANDIEGO * SANFRANCISCO - SINGAPORE - SYDNEY -TOKYO

ELSEVIER Gulf Professional Publishing IS an lrnprrnt of Elsevier 1°C

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Library of Congress Cataloging-in-Publication Data

Muhlbauer, W. Kent.

Pipeline risk management manual : a tested and proven system to prevent loss and assess risk / by W. Kent

Muhlbauer.-3rd ed.

p. cm.

Includes bibliographical references and index.

ISBN 0-7506-7579-9

1. Pipelines-Safety measures-Handbooks, manuals, etc. 2.

Pipelines-Reliability-Handbooks, manuals, etc. I. Title.

TJ930.M84 2004

621 3’6724~22 20030583 15

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library.

ISBN: 0-7506-7579-9

For information on all Gulf Professional Publishing publications visit our Web site at www.gulfpp.com

03 04 05 06 07 08 09 10 9 8 7 6 5 4 3 2 1

Printed in the United States ofAmerica

Contents

Acknowledgements

Preface

Introduction

Risk Assessment at a Glance

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6

Chapter 7

Chapter 8

Chapter 9

Chapter 10

Chapter 11

Chapter 12

Chapter 13

Chapter 14

Chapter 15

Appendix A

Appendix B

Appendix C

Appendix D

Appendix E

Appendix F

Appendix G

Glossary

References

Index

Risk: Theory and Application

Risk Assessment Process

Third-party Damage Index

Corrosion Index

Design Index

Incorrect Operations Index

Leak Impact Factor

Data Management

and Analyses

Additional Risk Modules

Service Interruption Risk

Distribution Systems

Offshore Pipeline Systems

Stations and Surface

Facilities

Absolute Risk Estimates

Risk Management

Typical Pipeline Products

Leak Rate Determination

Pipe Strength Determination

Surge Pressure Calculations

Sample Pipeline Risk

Assessment Algorithms

Receptor Risk Evaluation

Examples of Common

Pipeline Inspection

and Survey Techniques

vii

ix

xi

xv

1

21

43

61

91

117

133

177

197

209

223

243

257

293

33 1

357

361

363

367

369

375

379

38 1

385

389

Acknowledgments

As in the last edition, the author wishes to express his gratitude

to the many practitioners of formal pipeline risk management

who have improved the processes and shared their ideas. The

author also wishes to thank reviewers of this edition who con￾tributed their time and expertise to improving portions of this

book, most notably Dr. Karl Muhlbauer and Mr. Bruce Beighle.

Preface

The first edition of this book was written at a time when formal

risk assessments of pipelines were fairly rare. To be sure, there

were some repairheplace models out there, some maintenance

prioritization schemes, and the occasional regulatory approval

study, but, generally, those who embarked on a formal process

for assessing pipeline risks were doing so for very specific

needs and were not following a prescribed methodology.

The situation is decidedly different now. Risk management is

increasingly being mandated by regulations. A risk assessment

seems to be the centerpiece of every approval process and every

pipeline litigation. Regulators are directly auditing risk assess￾ment programs. Risk management plans are increasingly com￾ing under direct public scrutiny.

While risk has always been an interesting topic to many, it is

also often clouded by preconceptions of requirements of huge

databases, complex statistical analyses, and obscure proba￾bilistic techniques. In reality, good risk assessments can be

done even in a data-scarce environment. This was the major

premise of the earlier editions. The first edition even had a cer￾tain sense of being a risk assessment cookbook-“Here are the

ingredients and how to combine them.” Feedback from readers

indicates that this was useful to them.

Nonetheless, there also seems to be an increasing desire for

more sophistication in risk modeling. This is no doubt the result

of more practitioners than ever before-pushing the bound￾aries-as well as the more widespread availability of data and

the more powerful computing environments that make it easy

and cost effective to consider many more details in a risk

model. Initiatives are currently under way to generate more

complete and useful databases to further our knowledge and to

support detailed risk modeling efforts.

Given this as a backdrop, one objective ofthis third edition is

to again provide a simple approach to help a reader put together

some kind of assessment tool with a minimum of aggravation.

However, the primary objective of this edition is to provide a

reference book for concepts, ideas, and maybe a few templates

covering a wider range of pipeline risk issues and modeling

options. This is done with the belief that an idea and reference

book will best serve the present needs ofpipeline risk managers

and anyone interested in the field.

While I generally shy away from technical books that get too

philosophical and are weak in specific how-to’s, it is just simply

not possible to adequately discuss risk without getting into

some social and psychological issues. It is also doing a disserv￾ice to the reader to imply that there is only one correct risk man￾agement approach. Just as an engineer will need to engage in a

give-and-take process when designing the optimum building or

automobile, so too will the designer of a risk assessment/man￾agement process.

Those embarking on a pipeline risk management process

should realize that, once some basic understanding is obtained,

they have many options in specific approach. This should be

viewed as an exciting feature, in my opinion. Imagine how

mundane would be the practice of engineering if there were lit￾tle variation in problem solving. So, my advice to the beginner

is simple: arm yourself with knowledge, approach this as you

would any significant engineering project, and then enjoy the

journey !

Introduction

As with previous editions of this book, the chief objective of

this edition is to make pipelines safer. This is hopefully accom￾plished by enhancing readers’ understanding of pipeline risk

issues and equipping them with ideas to measure, track, and

continuously improve pipeline safety.

We in the pipeline industry are obviously very familiar with

all aspects of pipelining. This familiarity can diminish our sen￾sitivity to the complexity and inherent risk of this undertaking.

The transportation of large quantities of sometimes very haz￾ardous products over great distances through a pressurized

pipeline system, often with zero-leak tolerance, is not a trivial

thing. It is useful to occasionally step back and re-assess what

a pipeline really is, through fresh eyes. We are placing a very

complex, carefully engineered structure into an enormously

variable, ever-changing, and usually hostile environment. One

might reply, “complex!? It’s just a pipe!” But the underlying

technical issues can be enormous. Metallurgy, fracture

mechanics, welding processes, stress-strain reactions, soil￾interface mechanical properties of the coating as well as their

critical electrochemical properties, soil chemistry, every con￾ceivable geotechnical event creating a myriad of forces and

loadings, sophisticated computerized SCADA systems, and

we’re not even to rotating equipment or the complex electro￾chemical reactions involved in corrosion prevention yet! A

pipeline is indeed a complex system that must coexist with all

of nature’s and man’s frequent lack of hospitality.

The variation in this system is also enormous. Material and

environmental changes over time are of chief concern. The

pipeline must literally respond to the full range of possible

ambient conditions of today as well as events of months and

years past that are still impacting water tables, soil chemistry,

land movements, etc. Out of all this variation, we are seeking

risk ‘signals.’ Our measuring ofrisk must therefore identify and

properly consider all of the variables in such a way that we can

indeed pick out risk signals from all of the background ‘noise’

created by the variability.

Underlying most meanings of risk is the key issue of ‘proba￾bility.’ As is discussed in this text, probability expresses a

degree ofbelief: This is the most compelling definition of prob￾ability because it encompasses statistical evidence as well as

interpretations and judgment. Our beliefs should be firmly

rooted in solid, old-fashioned engineering judgment and rea￾soning. This does not mean ignoring statistics-rather, using

data appropriately-for diagnosis; to test hypotheses; to

uncover new information. Ideally, the degree of belief would

also be determined in some consistent fashion so that any two

estimators would arrive at the same conclusion given the same

evidence.

This is the purpose of this book-to provide frameworks in

which a given set of evidence consistently leads to a specific

degree of belief regarding the safety of a pipeline.

Some of the key beliefs underpinning pipeline risk manage￾ment, in this author’s view, include:

Risk management techniques are fundamentally decision

We must go through some complexity in order to achieve

“intelligent simplification.”

In most cases, we are more interested in identifying locations

where a potential failure mechanism is more aggressive,

rather than predicting the length of time the mechanism must

be active before failure occurs.

Many variables impact pipeline risk. Among all possible

variables, choices are required to strike a balance between a

comprehensive model (one that covers all of the important

stuff) and an unwieldy model (one with too many relatively

unimportant details).

Resource allocation (or reallocation) towards reduction of

failure probability is normally the most effective way to prac￾tice risk management.

support tools.

(The complete list can be seen in Chapter 2)

The most critical beliefunderlying this book is that all available

information should be used in a risk assessment. There are very

few pieces of collected pipeline information that are not useful

to the risk model. The risk evaluator should expect any piece of

information to be useful until he absolutely cannot see any way

that it can be relevant to risk or decides its inclusion is not cost

effective.

Any and all expert’s opinions and thought processes can and

should be codified, thereby demystifymg their personal assess￾ment processes. The experts’ analysis steps and logic processes can

be duplicated to a large extent in the risk model. A very detailed

model should ultimately be smarter than any single individual or

group of individuals operating or maintaining the pipeline

including that retired guy who knew everything. It is often useful to

think of the model building process as ‘teaching the model’ rather

than ‘designing the model.’ We are training the model to ‘think’

xii Introduction

like the best experts and giving it the collective knowledge of the

entire organization and all the years ofrecord-keeping.

Changes from Previous Editions

This edition offers some new example assessment schemes for

evaluating various aspects of pipeline risk. After several years

of use, some changes are also suggested for the model proposed

in previous editions of this book. Changes reflect the input of

pipeline operators, pipeline experts, and changes in technology.

They are thought to improve our ability to measure pipeline

risks in the model. Changes to risk algorithms have always been

anticipated, and every risk model should be regularly reviewed

in light of its ability to incorporate new knowledge and the

latest information.

Today’s computer systems are much more robust than in past

years, so short-cuts, very general assumptions, and simplistic

approximations to avoid costly data integrations are less justifi￾able. It was more appropriate to advocate a very simple

approach when practitioners were picking this up only as a

‘good thing’ to do, rather than as a mandated and highly scruti￾nized activity. There is certainly still a place for the simple risk

assessment. As with the most robust approach, even the simple

techniques support decision makmg by crystallizing thinking,

removing much subjectivity, helping to ensure consistency, and

generating a host of other benefits. So, the basic risk assess￾ment model of the second edition is preserved in this edition,

although it is tempered with many alternative and supporting

evaluation ideas.

The most significant changes for this edition are seen in the

Corrosion Index and Leak Impact Factor (LIF). In the former,

variables have been extensively re-arranged to better reflect

those variables’ relationships and interactions. In the case of

LIF, the math by which the consequence variables are com￾bined has been made more intuitive. In both cases, the variables

to consider are mostly the same as in previous editions.

As with previous editions, the best practice is to assess major

risk variables by evaluating and combining many lesser vari￾ables, generally available from the operator’s records or public

domain databases. This allows assessments to benefit from

direct use of measurements or at least qualitative evaluations of

several small variables, rather than a single, larger variable,

thereby reducing subjectivity.

For those who have risk assessment systems in place

based on previous editions, the recommendation is simple:

retain your current model and all its variables, but build a

modern foundation beneath those variables (if you haven’t

already done so). In other words, bolster the current assess￾ments with more complete consideration of all available

information. Work to replace the high-level assessments of

‘good,’ ‘fair,’ and ‘poor,’ with evaluations that combine sev￾eral data-rich subvariables such as pipe-to-soil potential

readings, house counts, ILI anomaly indications, soil resis￾tivities, visual inspection results, and all the many other

measurements taken. In many cases, this allows your ‘as￾collected’ data and measurements to be used directly in the

risk model-no extra interpretation steps required. This is

straightforward and will be a worthwhile effort, yielding

gains in efficiency and accuracy.

As risks are re-assessed with new techniques and new infor￾mation, the results will often be very similar to previous assess￾ments. After all, the previous higher-level assessments were no

doubt based on these same subvariables, only informally. If the

new processes do yield different results than the previous

assessments, then some valuable knowledge can be gained.

This new knowledge is obtained by finding the disconnect￾the basis of the differences-and learning why one of the

approaches was not ‘thinking’ correctly. In the end, the risk

assessment has been improved.

Disclaimer

The user of this book is urged to exercise judgment in the use of the data presented here.

Neither the author nor the publisher provides any guarantee, expressed or implied with regard to

the general or specific application of the data, the range of errors that may be associated with

any of the data, or the appropriateness of using any of the data. The author accepts no responsi￾bility for damages, if any, suffered by any reader or user of this book as a result of decisions

made or actions taken on information contained herein.

Risk Assessment at

a Glance

The following is a summary of the risk evaluation framework described in Chapters 3 through 7. It is one of several approaches to

basic pipeline risk assessment in which the main consequences of concern are related to public health and safety, including environ￾mental considerations. Regardless of the risk assessment methodology used, this summary can be useful as a checklist to ensure that

all risk issues are addressed.

Relative Risk

Score

t 1

Leak Impact

Factor

I

Figure 0.1 Risk assessment model flowchart.

Incorrect

Operations