Dealing with disaster

Natural hazard triggered technological accidents (Natechs) are on the rise. The globalisation of business has increased the number of organisations at risk, as well as the severity of disaster. A recent analysis of selected chemical-accident databases showed that around 2-5% of the accidents with hazardous-substance releases were caused by natural events.

Professor Christian Jochum, director of the European Process Safety Centre (EPSC) believes climate change is one of the culprits. “The challenge for the process industries, especially if they are planning new facilities, is to take the effects of climate change into account,” he said.

“In our guidance to the German government on flooding, we recommended adjusting the retrospective data for water levels and rainfall by a climate factor of 1.2 for new installations with a lifetime until the year 2050.”

While the real impact of climate change is contentious, the increase in Natech incidents is causing growing concern. One of the biggest challenges is that when Natech accidents occur, they can cause a domino effect where multiple systems malfunction. For industry, the problem is compounded by choice of location.

Some process sectors may intentionally build plants in high risk areas, for instance near rivers, due to easy access to cooling water.
Incidents in these areas present severe risks to the environment, as well as having a negative economic impact. The March 2011 Japanese earthquake and tsunami cost the Japanese economy over £130 billion. Meanwhile, the overall worldwide economic damage of natural disasters in 2011 tallied up to £230 billion.

More recently, Superstorm Sandy, which brought havoc to the US East coast, is estimated to have caused $62 billion in damage, placing it as the US’ second-costliest natural disaster after Hurricane Katrina.

Because natural disasters often trigger secondary catastrophes, the cascade effect has serious consequences to individuals and the environment. With process industries often at the heart of these events, the mitigation of disasters forms a key responsibility for the sector.

Gambler’s fallacy

Despite these figures, many process companies are failing to take the correct measures. “When considering natural catastrophes, people tend to think ‘it will never happen to me’”, said Allan Macpherson, chief engineering technical specialist at FM Global.

“The assumption is that if a natural catastrophe occurs, the consequences will have greater impact elsewhere. There is also a behavioural trait, known by some psychologists as the Gambler’s Fallacy, which assumes that because a disaster has happened once, it won’t happen again.”

To change these behaviours, Macpherson argues that it is important to look at risks relevant to the lifetime of a process, rather than discussing risks in terms of probability. For example, there may only be a 1% chance of flooding at a site each year, but if a site has a lifetime of 50 years, then the risk of that site flooding increases to 39%.

Macpherson claims statistics presented in this way are far more compelling and highlight that if a facility is located in a high-risk area, it’s not a case of if a catastrophe will happen, but when.

Natech risks are being taken more seriously by the European regulators, according to Jochum. Requirements governing prevention of chemical accidents in Europe appear in the Seveso II directive. Under the directive, industrial facilities that store, use or handle dangerous substances are required to establish emergency plans in the case of an accidental chemical release. The difficulty is in the breadth and diversity of potential Natech risks.

Jochum was part of the advisory commission to the German government on flooding risks. He is currently working on guidance for German chemical companies on risks for wind and snow. “Natech has been taken seriously where the risk is evident,” he said.

“So wherever a chemical plant is in a river valley, where you may have flooding, risks are often considered and safeguards have been put in place. It may not be the same for flooding from heavy rains which can occur everywhere. In major companies, the risks are often considered in emergency planning, but often not in design.”

Mitigating risks

There are a number of practical steps that process companies can take to mitigate risks.

Macpherson claims that companies must focus on the fundamentals. Instead of asking “How much protection do we need?” and “How much protection can we afford?” the first question businesses need to ask themselves is: “Do I really need to locate my facilities in areas vulnerable to flood, windstorm, earthquake or other catastrophic events?”

“This is a critical question even for well-insured companies because, as business leaders who have been affected by natural disasters know all too well, insurance coverage is not enough to make an organisation economically whole, nor will it adequately protect them against damaged reputation or loss of market share,” said Macpherson.

“A wise rule for process companies to follow is to work with their full network of suppliers and partners to ensure business resilience is consistently implemented.”

Adapting existing facilities to address Natech risks can be an expensive task, but there are a number of common sense solutions. For instance, it will generally be impractical to protect an existing building from collapse if it is close to the epicentre of a major quake unless it was originally constructed with this in mind. The larger problem is the fire following an earthquake due to broken gas and fuel lines and damaged electrical systems.

Macpherson suggests three key actions to make process facilities more resilient against fire; add valves on gas and fuel lines arranged to close upon detection of an earthquake; brace gas and fuel lines so they move with the building as it shakes and are not broken by differential movement; and brace fire sprinkler pipework in a similar manner and ensure water supplies are also protected so that systems remain operational following a quake.

“While it may be more difficult for existing facilities to address Natech events, it’s not impossible,” said Jochum.”With additions such as movable barriers or changing the electrical and information systems, real improvements can be made. It may be expensive but if companies see this as a long-term investment there may be opportunities to do this together with other plant changes.”

If Natech incidents do increase in the frequency and severity that is expected, then the process industries will have an important part to play in mitigating their impact. No one can predict with certainty the timing of natural disasters.

They can however, place an estimate on the environmental and economic impact. Given recent figures, process industries are now waking up to the fact that they need to tackle Natech risks more earnestly than ever before.