OSHA's Flame-Resistant Clothing Policy - ASSE Members

Table 1Hypothetical Cost to Control OneOil & Gas Risk for a Small Operatormany subject matter experts having vast resources andtime at their disposal.CHALLENGESThe American Clean Energy and Security Act of 2009brought to light some controversial challenges to theU.S. petrochemical industry. Refineries around the worldcan produce identical grades of gasoline and diesel fuelfor export to the U.S., which is in direct competition toproducers; however, measures of operational safetyabroad do not reflect codes and standards found withinEPA, OSHA, NFPA, ANSI, API, etc. The NationalPetrochemical and Refiners Association’s (NPRA) messageto the U.S. Congress last year brings to mind thatwe may not be pursuing as a nation affordable and economicallysensible clean energy policies if we continuein the same direction (NPRA, 2010). As we pursue ournational goals for clean energy technology and renewableenergy growth, we need to remain both competitiveand safe so that our children may grow up working inthe same community in which they live and not havingto service other countries that make our goods and produceour resources.We cannot talk about lowering risk without talkingabout cost. The author recently completed a risk assessmentfor a smaller upstream natural gas exploration andproduction firm using a failure mode and effect analysisfor approximately 100 activities. The firm had 10 employeesand roughly 100 contract operators servicingapproximately 1,500 wells. This activity involved roughlya half-dozen subject matter experts who know thebusiness and consumed more than 100 hours of time justto identify a handful of “more critical risks.” This costwas ($10,000 at $100/hour) to identify a handful of risksand to keep the math simple. The goal was to prevent“one in a million” or one death in a population of a millionor a million dollars in property or environmentaldamage (i.e., a low-probability, severe-consequenceevent). The dollars of revenue required to pay forthe risk identification and control would varybased on the profit margin, but let us say just onerisk existed.For example, let us consider a risk concerning awell site where the lease operator would need toenter an area during drilling and completion andwhere there was the potential to hit a pressurizedzone involving a gas release (e.g., a blowout or kick).The risk management to implement just one controlwas to require a mandatory use for all operators touse a hazardous gas detector upon entry to the facility.In looking at a hypothetical cost to control the riskfor this small company, developing the policies andprocedures to properly use the gas detector wouldrun say $5,000, acquiring 100 gas detectors at$500/each would run $50,000, performing trainingfor 100 people would run $5,000 and maintaining theprogram annually would be say $5,000.According to API, profit margins or earnings per dollarof sales were 7.3 cents in the first quarter of 2010 forthe oil and natural gas industry (API, 2010). The hypotheticalcost to control one risk for a small operatorwould be say $75,000 in the first year and require roughly$1.02 million dollars in sales to cover the cost of theprogram; note that the cost will vary depending on theprofit margin (Table 1).However, as safety professionals know, multiple failuremodes (vectors or root causes) may need to be mitigatedto prevent a catastrophic failure, and for eachfailure mode, a handful of controls may be necessary forany one risk (e.g., FRC, improved intrinsically safedesign, improved bleed and block methods, improveddown-hole monitoring, improved training and emergencymethods, etc.). Having said this, the oil and gas industryhas multiple low-probability/severe-consequence eventsand for which equates to millions of dollars in cost annuallyfor every small company. Small employers shoulddo their share for preventing risk, but is preventing aone-in-a-million event robust enough; were we qualifiedto perform the hazard assessment?OSHA’s March 2010 enforcement policy may leave asafety professional thinking, “When can FRC not beworn and who will decide if a hazard assessment is comprehensiveand robust enough?” There does not seem tobe any independent judgment by the experts, such as fireprotection professionals, process safety experts or the oiland gas industry, when it comes to flash fire risk whenviewed through the lens of the OSHA 2010 interpretations.The March 2010 policy almost deviates from theenforcement of the long-established, performance-basedprocess of a hazard assessment using recognized expertiseand competence under the authority of §1910.132(a)by listing numerous activities for which FRC is expected,and the October 2010 interpretation presents cleardoubt as to if the oil and gas industry can implementcomprehensive and robust process controls. Therefore,22Well Informed www.asse.org 2011