CSB to Investigate Deepwater Horizon Incident

photo :Oilonline.com

I'm very pleased to hear that the US Chemical Safety Board (CSB) has been invited to investigate the causes of the explosion on the Transocean/BP oil rig, which occurred on 20th April.

The CSB takes a very holistic approach to its investigations, looking at technical factors but very importantly, the organisational, cultural and human factors which may have contributed to such an incident.

An additional benefit of a CSB investigation is the fact that CSB is capable of producing excellent material to share all of the learnings with the wider community. The video  'anatomy of a disaster' about Texas City is a must see for chemical industry professionals.

In a letter to Senator Henry Waxman, the CSB Chairman, John Bresland, has agreed that the investigation will look for similarities with the BP Texas City explosion but stressed the importance that the investigation be carried out without preconceptions and that all of the underlying causes and factors are thoroughly examined.

This point is essential. Politicians and some media outlets have been very quick to condemn BP as 'guilty'. Some of the accusations may prove to be valid but this can only be fairly determined with a thorough and proper investigation of all of the issues and all of the parties involved.

UK Emissions Data Shows Impact of Recession

 photo : DECC

The UK Department of Energy and Climate Change has released provisional 2009 figures for UK greenhouse gas emissions.

At a first glance, the figures appear to tell a positive story, with the UK set to meet its pledge to cut CO2 emissions by 20% from 1990 levels in 2010. However on closer inspection, it can be seen that emissions have been more or less steady since 1995 and the big drop occurred in 2009 as a result of the global recession and a significant drop in manufacturing output. It is likely, therefore, that similar reductions have occurred throughout Europe and North America.

From a social and economic perspective, a reduction in output is counterproductive. If manufacturing capacity is lost in Europe and North America, it is unlikely to be replaced at the same location.

It is absolutely right to focus on reducing emissions but innovation and good engineering practice is the way to achieve this. The 2009 figures create a positive illusion but the reality is that we have a long way to go to achieve sustainable emissions reductions.

Bhopal Arrests - Too Little and Too Late

photo : ibtimes.com

Much  press coverage this week about the sentences given to former Union Carbide empoyees in relation to the Bhopal disaster which occurred on 3rd December 1984, when the plant released 42 tonnes of toxic methyl isocyanate (MIC) gas, exposing more than 500,000 people to toxic gases.

Rightly, in this blog's view, the Indian Press and much of the world's press have expressed their disgust at the lenient sentences and the fact that nothing was done to bring the US based former Union Carbide head, Warren Anderson, to justice.

Bhopal was an incident that was simply waiting to happen. There were very many 'obvious' issues which could and should have been addressed by a company with the experience, expertise and capability of Union Carbide

• Capital expenditure had been minimised  
• General cost cutting had led to poor working conditions and an inadequate inspection regime
• Safety rules were inadequate and operators were instructed to ignore them
• Training was cut back drastically to cut costs
• Workers were forced to use manuals in English, even though very few could understand the language
• Some safety features had been dismantled or disabled
• Safety systems were inadequately designed
• Supervision was reduced to save cost
• Poor morale led to an exodus of skilled personnel to better and safer jobs

Chemical manufacturers have a duty-of-care to employees and the general public. Chemical industry professionals receive years of training in order to fulfill this duty. For managers with the right training and experience, issues such as those listed above are easy to identify and address. Managers, at all levels and in any chemical manufacturing company, should be capable of spotting and addressing such major issues. If this isn't they case, they should not be in the role.

Shale Gas Discovered in Poland

photo : Energy Tribune

According to Polskie Radio's website,  PKN Orlen, the Polish refining and petrochemicals group, has discovered large quantities of shale gas in the Lublin area in the East of Poland.

The find is significant, as experts have estimated that Poland may have up to 3 trillion m3 of shale gas. Currently, Poland is reliant on Russian imports for much of its gas.

The news will also be a major boost for Poland's chemical industries, with fertiliser producers and petrochemicals manufacturers potentially set to benefit from this new gas source.

This blog has watched the development of the shale gas business with interest. There have already been significant developments in North America. It has been suggested for some time that Europe could be a rich source of shale gas. Discoveries such as that in Poland, show that the future of energy and chemical feedstock supply in Europe could be set to take a new course.

New Economic Fears Highlight Need for Manufacturing Excellence

Back in September 2009, this blog highlighted the 'new reality' faced by chemicals manufacurers.

As stated at the time "If our view is correct, we are in for a sustained period of lower volumes and reduced margins but punctuated by periods of high volatility caused by oil and currency markets. This will certainly mean that the pressure that has been experienced by the manufacturing sites during the downturn will continue."

With the current EU financial difficulties and the tightening fiscal controls in China, it appears that this statement was spot on. Although things have been generally better for manufacturers over the last 6-9 months,we are heading into very turbulent times once again, particularly in Europe and in Asia.

As I mentioned back in September, chemical manufactureres need to once again think very hard about the actions they need to take in order to survive the coming storm and to come out in good shape at the other end.

• There must be a clear focus on what has to be done to survive but this absolutely must not affect the ability to be flexible .
• A focus on cost effectiveness and value for money is essential.
• Wastes of all types must be identified and systematically eliminated using approaches such as Lean Manufacturing.
• Organisational effectiveness is a must. Staffing levels must be reviewed critically to ensure that organisations are as effective as possible and staff should be trained and ready to play their part by being able to safely and effectively start-up, shut-down, change grade and increase production rates at very short notice.
• Simply cutting numbers is not smart enough - skills must be retained but have sufficient flexibility to be available and ready, as and when required

Deepwater Horizon Incident Leads to Regulatory Reforms

photo : Upstream Today

As efforts continue to stop the flow of oil and manage the environmental impacts of the Deepwater Horizon disaster, the US Government has indicated that it will implement a series of regulatory reforms to minimise the risk of such an incident happening again.

Secretary of the Interior, Ken Salazar, has announced a series of reforms that will provide federal inspectors more tools, more resources, more independence, and greater authority to enforce laws and regulations that apply to oil and gas companies operating in US offshore areas.

Meanwhile, the question of blame is making the headlines. It was reported this week that US oil industry regulator the Minerals Management Service did not enforce the installation of a secondary shutdown system to give back up in the case of failure of the blow out valve. It is also reported that the various parties involved in the incident are already pointing the finger at each other in apportioning blame.

The immediate issues must be resolved by all parties working together to stop the leak and to address the environmental situation in the most effective manner possible. Detailed investigations and apportionment of blame will undoubtedly follow.

A technically sound and proven back up safety system has to be designed and implemented on similar offshore patforms. This is, in my view, essential in order to avoid a major loss of public and government support for the offshore oil and gas industry. With a significant proportion of the world's offshore reserves being located offshore, failure to do something different is not an option.

Shell Singapore Fully On-Line

photo : Hydrocarbons processing

Shell has announced that its integrated refinery and petrochemicals complex in Singapore is now fully on line.

Shell has long talked of highly efficient, integrated supersites being the company's blueprint for the future. The Singapore Site certainly ticks all the boxes with the following features

• Complex refinery with capability to process a wide range of crudes
• Flexible cracker using latest technology and with capability to process heavier raw materials from refinery
• World scale downstream plants with latest technologies
• Fully integrated site infrastructure
• Optimisation models to maximise margins depending on feedstock prices and availability

The site can process 500,000 bbl/day of crude and the cracker has a capacity of 800kT. All of the downstream plants are of large capacity.

According to the press release, the investment is Shell's largest ever in chemicals. As the blog noted back in November, at International eChem, we have long argued that the critical success factors for petrochemical operations are integration, size, technology, global reach and location. The SEPC complex scores top marks on all of these points.