Practical Application of Risk Based Inspection Technology to Management and Engineering Problem Solving

1. Introduction
to Augustus
2015 Seminar/
Webinar
Series

2. WHO ARE WE?
 The Augustus Group, LLC (TAG)
 Materials Technology Consulting Company
 Operation >10 Years, Founded 2003
 100’s Years Experience in…
 Bolting Technology and Leak Management
 Non-Destructive Examination, and
 Risk Based Inspection
 Petroleum/Chemical, Fossil/Nuclear Upstream & Downstream
 MI/RBI Programs
 Wrote Chemical Manufacturer’s Association’s MI Program Trained >
300 Companies
 > 30 RBI Implementations Worldwide
 First Known Refinery RBI Program at BHP Hawaii in 1995
 Developed APTECH’s (Now Intertek) RBI Program and Software
 Experienced with Most Major Software Packages – Tischuk, Meridium, The
Welding Institute, Capstone, Aptech, and API

3. Areas of Specialty Operating Company Former
Employee
Jim Towers Pipelines, Litigation Exxon, Conoco
Peter Hunt Refinery Management, MI/QAQC Shell
Bob Blackstone Stress Analysis, Fracture Mechanics, Welding,
Fatigue, Design
ABS
Gene Rak Corrosion, MI Exxon
Scott Miller NDE Saudi Aramco
Edwin Merrick RBI, Materials Technology, Welding, Bolting, Leak
Management
TVA, Aptech
Scott Merrick Education, Training City of Nashville
Dick Jones Corrosion, PSM, MI, Chemical Plant Management US Steel/ Aristech
Joel Olener PSM
Les Loushin MI, Materials Technology Arco Chemical, Sunoco
Gene Silverman AST Integrity, Eagle System INTANK
Alan Judkins Business Development US Steel/ Aristech
David Sanders Inspection Program Management & Site
Implementation
Petrochem
Marvin Mehler Corrosion Engineering NCRA
James Waldrop TA Planning Citgo
Paul Rose NDE, Data Analysis (EVA, etc.)
Mike Fox Maintenance, MI Implementation, Safety Program
Management
Honeywell
Dave Holthaus NDE Jacobs Engineering
Frank Simpton Inspection Program Management & Implementation,
Corrosion, Damage Management, On-stream
Inspections
Acuren, Hovensa, Saudi Aramco
ENGINEERING CONSULTANTS

4. WHAT WE DO?
 Seminars, Webinars & Audits
 Procedures
 Mechanical Integrity
 Risk Based Inspection
 Fitness for Service/Suitability for Service
 QC Support For Maintenance and Contractors –
TA’s, New Build’s, etc.
 Use of Manufacturing Excellence Principals for
Asset Integrity, Compliance, and Reliability
Improvement

5.  2/19 - Improving your Turnaround
Performance by Managing for Leak Free
Startup – Webinar
 2/26 11am CST, Use Risk Based Inspection
Tools for Optimizing Performance – Webinar
 3/5, 11am CST, Managing Your On-Stream
Inspection Program and External Versus
Internal Inspections - Webinar
 3/12, 11am CST, Managing Corrosion Under
Insulation - Webinar
 3/17 & 3/18 – MI for PSM Compliance
SEMINAR
 MORE TO BE SCHEDULED, CHECK
WWW.THEAUGUSTUSGROUP.NET
WEBINAR/SEMINAR SERIES – AIMED AT
ALIGNMENT WITH BUSINESS OBJECTIVES

6. Risk Based Inspection Tools
for Optimizing Performance
Manufacturing Manager:
 Plant Manager
 Operations
 Maintenance
 Engineering
**The Use of Risk Based Tools
to Improve Your Paycheck

7. RISK MANAGEMENT?

8. CONSEQUENCES ARE BAD BUT
MITIGATED

9. RISK MANAGEMENT DURING IKE

10. Even Augustus Himself Could
not Manage the Likelihood of
this Happening – All is Left is to
Deal with the Consequences

11. I’m Gonna Try a Walk in
Your Shoes –
And I Thought Running a
Small Business Was a
Challenge !!!!
OPERATIONS
SAFETY
INSPECTION
MAINTENANCE
SUPERVISOR
ENGINEERING
PLANT
MANAGER’S
OFFICE
MANUFACTURING MANAGER’s –
Daily Challenges

12. MANUFACTURING MANAGER’s –
Daily Challenges
 SAFETY – Needs immediate
attention – correct an unsafe
condition on a work platform.
 ENVIRONMENT – Need to stock
spare parts for Waste Gas
Incinerator.
 OPERATIONS – Lost the main
pump; want Mx to jump on it and
work overtime till completed.

13. MANUFACTURING MANAGER’s –
Daily Challenges
 INSPECTION – Need to inspect furnace tubes
at the TA.
 ENGINEERING – Want someone to take
vibration reading on the spare pump that
operation has just put on. Missed it last month
as the pump was not in service……
 MAINTENANCE SUPERVISOR – Two mechanics
just called in sick…
 PLANT MANAGER’S SECRETARY – There is an
emergency. The toilet is plugged…

14. MANUFACTURING MANAGER…
WHAT NEXT?
CONTRACTORS???

15. You Using
All the
Available
Tools???
e.g. Quality
Control/Assurance,
RISK
PRIORITIZATION
and/or
RISK BASED
INSPECTION

16. RISK PRIORITIZATION AND OR
e.g. RISK BASED INSPECTION
 By Now we’ve all Seen the Customary
Risk Matrix in Some Format
 Do You have a RBI Program?
 Developed and in Place?
 Do You Understand its Potential?
 Are you Using it to Prioritize your Actions and
Deliver on?
 Or Does Your Company Implement a
Qualitative Approach??
 RISK MANAGEMENT IS A KEY
Consequence Ranking
ABCDE
1
2
3
4
5
ProbabilityRanking
HIGH
MED HIGH
MEDIUM
LOW

17. MANY COMPANIES HAVE OR/ARE
MAKING THE TRANSITION
NFPA Diamond Discrimination
Engineering
Analysis
RBI
Expert
Opinion
High
Low
High
RCM
Consequence Ranking
ABCDE
1
2
3
4
5
ProbabilityRanking
HIGH
MED HIGH
MEDIUM
LOW
Risk Based Mechanical
Integrity
Using FFS and Advanced
NDE When Needed
Conventional
MI Program

18. AUGUSTUS Tennessee 4-Step
SURGICAL Risk Based Inspection Program
1. Integrate Qualitative Risk Analysis into the
Process Hazard Analysis
This Will Institutionalize Your RBI Program
2. Focus on Quantifying Consequence by Process
System
3. High & Low Consequence Items Quantitative
RBI Analysis
20 - 30% of Your Equipment Gets the Special
Attention it Needs
4. Medium Consequence Items Are Treated in
Conventional Program Manner
**Augustus Uses Our Custom Sharepoint/Reliasoft
Solution To Make It Happen

19. WHAT DO WE GET FROM AN
RBI IMPLEMENTATION
Equipment
Data Collection
Process
System
Corrosion
Analysis
Qualitative
Analysis
Data Entry
Quantitative
Analysis
QC and
Equipment
Integrity
Review
RBI Plan
Approval
Action
(Inspections
etc)
Results
Analysis
Criticality and
Plan Update

20. RISKLEVEL
COST TO REDUCE RISK
RESIDUAL RISK
 Keep it Simple Make Sure You
Identify the OBVIOUS
 RISK ISSUES and
 OPPORTUNITIES
 USE THE EVIDENCE
 DEVELOP/EXECUTE ACTION
PLANS FOR IMPROVEMENT
RISK MANAGEMENT IS A KEY –
Take the Action

21. QUALITATIVE RISK MATRIX FOR
EVERYDAY USE
 At Every Management
Level
 Best Practice is to Manage
Based on Risk
 Situational Decision
Making
 Inputs
 Your RBI Program Data
 Results from a Qualitative
Review During the PHA

22. SO HOW IS IT DONE??
 Identify
 Business Drivers
 Business Impacts For Each Driver
 Establish Business Risk = Impact X
Event Likelihood
 Identify Best Action For Business Need
 Use at Local Management Level or
Ideally Institutionalize Methodology For
 Sustainable Performance and
 Continuous Improvement

23. BUSINESS DRIVERS – IMPACTS
 Personnel Impact
 Environmental Impact
 Public Disruption Impact
 Business Interruption Impact
 Asset Damage Impact
 Reputation Impact

24. ACTION LEVELS- Even if the Likelihood is High for All Events,
the Impacts Affect the Business Risk and Subsequent Action
Impacts Event Likelihood RISK ACTION
> 24 HRS
MAJOR
HIGH HIGH
Emergency, Rounds, Monthly
PdM, critical spares, RCA
> 8 HRS
MODERATE
HIGH
MEDIUM
HIGH
Urgent, Quarterly PdM, select
spares
4 – 8 HRS
MINOR
HIGH MEDIUM Routine, Annual PdM, JIT
< 4 HRS
NEGLIGIBLE
HIGH LOW Routine, No PdM, JIT
Impacts Event Likelihood RISK ACTION
> 24 HRS
MAJOR
HIGH HIGH
Emergency, Rounds, Monthly
PdM, critical spares, RCA
> 8 HRS
MAJOR
HIGH HIGH
Emergency, Rounds, Monthly
PdM, critical spares, RCA
4 – 8 HRS
MAJOR
HIGH HIGH
Emergency, Rounds, Monthly
PdM, critical spares, RCA
< 4 HRS
MODERATE
HIGH
MEDIUM
HIGH
Urgent, Quarterly PdM, select
spares

25. RISK MATRIX – Applications
 SAFETY – Need immediate attention – correct an
unsafe condition on a work platform.
 Risk Ranked – D1
 Action – Urgent Priority; Within next 5 days
 ENVIRONMENT – Need to stock spare parts for
waste gas incinerator.
 Risk Ranked – C4
 Action – Least Critical; Spare parts not required
 OPERATIONS – Lost the main pump; want Mx to
jump on it and work overtime till completed.
 Risk Ranked – D2
 Action – Routine Priority; No overtime

26. RISK MATRIX – Applications
 INSPECTION – Need to inspect furnace tubes at
the TA.
 Risk Ranked – D1
 Action – On hold
 ENGINEERING – Want someone to take vibration
on the spare pump that operation has just put on.
Missed it last month as the pump was not in
service……
 Risk Ranked – D3
 Action – Low Criticality; Reduce frequency of vibration
monitoring

27.  PLANT MANAGER’S SECRETARY – There is an
emergency. The toilet is plugged…
 Risk Ranked – High!!!
 Action – Rush mechanic immediately!!!
RISK MATRIX – Applications

28. CONSEQUENCES
MAJOR Fatality or Disabling Injury, Major fire/explosion
requiring off-site response, Toxic/flammable gas release,
Permit exceedance or RQ release of chemicals to air, water
or ground, Production loss (unit shutdown or partial) > 24
hrs, Repair costs >$100K
1
MODERATE OSHA recordable Injury, Minor fire/explosion
requiring plant fire brigade/ERT response, Minor release of
chemicals to air, water or ground requiring ERT response,
Production loss (unit shutdown or partial) between 12 and
24 hrs, Repair costs between $50K to $100K
2
MINOR First aid injury, Local fire requiring operator
response only, Minor release of chemicals to air, water or
ground manageable by routine staffing, Production loss
(unit shutdown or partial) less than 12 hrs, Repair costs
between $10K to $50K
3
NEGLIGIBLE No health, safety and environmental
impact, Minor recoverable production loss, Repair costs < $
10K
4
MOST CRITICAL LESS CRITICAL
CRITICAL LEAST CRITICAL
ASSET CRITICALITY LIKELIHOOD OF FAILURE
E D C B A
Extremely
Unlikely
Unlikely Possible Some
what
likely
Very Likely
Reliability
Excellent
> 5 yrs
Reliability
– Good
3–5yrs
Reliability –
Fair
1–3 yrs
Reliability
– Poor
1 yr
Reliability
Very Poor
<1 yr

29. CONSEQUENCES
MAJOR Fatality or Disabling Injury, Major fire/explosion
requiring off-site response, Toxic/flammable gas release,
Permit exceedance or RQ release of chemicals to air, water
or ground, Production loss (unit shutdown or partial) > 24
hrs, Repair costs >$100K
1
MODERATE OSHA recordable Injury, Minor fire/explosion
requiring plant fire brigade/ERT response, Minor release of
chemicals to air, water or ground requiring ERT response,
Production loss (unit shutdown or partial) between 12 and
24 hrs, Repair costs between $50K to $100K
2
MINOR First aid injury, Local fire requiring operator
response only, Minor release of chemicals to air, water or
ground manageable by routine staffing, Production loss
(unit shutdown or partial) less than 12 hrs, Repair costs
between $10K to $50K
3
NEGLIGIBLE No health, safety and environmental
impact, Minor recoverable production loss, Repair costs < $
10K
4
LIKELIHOOD OF FAILURE
E D C B A
Extremely
Unlikely
Unlikely Possible Some
what
likely
Very Likely
Reliability
Excellent
> 5 yrs
Reliability
– Good
3–5yrs
Reliability –
Fair
1–3 yrs
Reliability
– Poor
1 yr
Reliability
Very Poor
<1 yr
Emergency Work Start
Immediately; OT
approved
Routine Priority < 3 wks
Urgent Priority – Within 1
week
When resources are
available; within 6 months
WORK SCHEDULING

30. CONSEQUENCES
MAJOR Fatality or Disabling Injury, Major fire/explosion
requiring off-site response, Toxic/flammable gas release,
Permit exceedance or RQ release of chemicals to air, water
or ground, Production loss (unit shutdown or partial) > 24
hrs, Repair costs >$100K
1
MODERATE OSHA recordable Injury, Minor fire/explosion
requiring plant fire brigade/ERT response, Minor release of
chemicals to air, water or ground requiring ERT response,
Production loss (unit shutdown or partial) between 12 and
24 hrs, Repair costs between $50K to $100K
2
MINOR First aid injury, Local fire requiring operator
response only, Minor release of chemicals to air, water or
ground manageable by routine staffing, Production loss
(unit shutdown or partial) less than 12 hrs, Repair costs
between $10K to $50K
3
NEGLIGIBLE No health, safety and environmental
impact, Minor recoverable production loss, Repair costs < $
10K
4
TURNAROUND
MUST DO
NOT
NECESSARY
SHOULD DO
NEVER
JUSTIFIED
LIKELIHOOD OF FAILURE
E D C B A
Extremely
Unlikely
Unlikely Possible Some
what
likely
Very Likely
Reliability
Excellent
> 5 yrs
Reliability
– Good
3–5yrs
Reliability –
Fair
1–3 yrs
Reliability
– Poor
1 yr
Reliability
Very Poor
<1 yr

31. 1. Clarifying the PSM exemption for atmospheric storage tanks;
2. Oil- and Gas-Well Drilling and Servicing;
3. Oil- and Gas-Production Facilities; way behind Implementing; don’t follow 510 & 570
4. Expanding PSM Coverage and Requirements for Reactivity Hazards;
5. Updating the List of Highly Hazardous Chemicals in Appendix A of the PSM Standard;
6. Revising the PSM Standard to Require Additional Management-System Elements;
7. Amending Paragraph (d) of the PSM Standard to Require Evaluation of Updates to
Applicable recognized and generally accepted good engineering practices (RAGAGEP);
whatever API or standards writing organizations put out
8. Clarifying the PSM Standard by Adding a Definition for RAGAGEP;
9. Expanding the Scope of Paragraph (j) of the PSM Standard to Cover the Mechanical
Integrity of Any Safety-Critical Equipment;
10. Clarifying Paragraph (l) of the PSM Standard with an Explicit Requirement that
Employers Manage Organizational Changes;
11. Revising Paragraph (n) of the PSM Standard to Require Coordination of Emergency
Planning with Local Emergency-Response Authorities;
12. Revising Paragraph (o) of the PSM Standard to Require Third-
Party Compliance Audits;
13. Expanding the Requirements of §1910.109 to Cover Dismantling and Disposal of
Explosives, Blasting Agents, and Pyrotechnics;
14. Updating §§1910.106 and 1910.107 Based on the Latest Applicable Consensus
Standards;
15. Updating the Regulations Addressing the Storage, Handling, and Management of
Ammonium Nitrate;
16. Changing Enforcement Policy of the PSM Exemption for Retail Facilities; and
17. Changing Enforcement Policy for Highly Hazardous Chemicals Listed in Appendix A of
the PSM Standard without Specific Concentrations.
OSHA PSM RFI signed in August 2013 – potential candidates for
rulemaking or enforcement policy changes – Still Under Review

32. RISK MANAGEMENT – Consider
Augustus’ MI Seminar in March