Project Selection/PMM

Preventive and Mitigative Measures (PMM or P&M) is a common regulatory phrase which really means ‘risk management’. Here is a risk management discussion with a view towards US IMP regulatory compliance for PMM. The centerpiece of regulatory expectations is having a formal decision process for what mitigations are employed at what locations. (See PHMSA audit protocols for a detailed list of regulatory expectations.) This expectation is best met using a formal cost/benefit decision basis, perhaps with within an ALARP framework.

P&M, PMM: Risk Management geared towards US IMP regulations

Armed with modern and robust RA, we are now better able to manage risks.

Even with good risk assessment info, RM is not without challenges.  Challenges arise not because of the rm processes but only because of the complexities of the real world.  This is an important distinction.  Our methods should ONLY appear complex when the underlying phenomena—the science, engineering, or economic models—are complex.

Let’s examine the multidimensional nature of pipeline RM.  An early decision must involve the acceptability of the current risk level.  That determination involves dimensions such as:  ‘acceptable to whom?’, ‘acceptable for what time period and over what space?’.  Addressing the first requires knowledge of all stakeholders and their individual cost/benefit calculus of how the pipeline impacts them.  The second is more subtle, requiring us to recognize that some risks may be acceptable for short segments of pipe or for short periods of time, even though the same risk is not tolerable for longer lengths or longer time.

Perhaps the most obvious dimension is a choice to reduce risk.  employ or improve a risk mitigation measure.  The perhaps less obvious associated dimensions include:  over what space, for what initiation time, and for what future period.

Evaluating potential risk mitigation projects requires analyses of both the risk and the economics associated with the project.  This is often in comparison with status quo, ie, not performing the project.

To illustrate this multi-dimensional nature, consider the following scenario. 

Example

A large subdivision is planned over and all around an older high pressure pipeline.  An associated increase in third party damage potential is recognized.  This new risk is estimated to be $2K/yr of additional Expected Loss (EL).

Options to manage this increased risk are identified and analyzed.  Two of the identified options are compared as follows

Protective concrete slab versus increased patrol.  The concrete cap would be installed over 4,000 ft of pipeline at a cost of $200K.  It is estimated to have negligible influence on potential consequences of pipeline failure but should reduce probability of failure by 90%.  That is, only one in ten of the potential damaging third party incidents would actually cause a failure while nine out of ten would be successfully thwarted by the new slab.  This lowers the new EL to $200/yr for the 4,000 ft where the slab is installed.

The alternative of increased patrol is estimated to cost $2k /yr and, for logistical efficiency reasons, would cover not only the 4,000 ft impacted by the new subdivision, but an additional 5,000 ft.  So, 9,000 ft of the pipeline would also benefit.  The frequencies and detection capabilities of the potential new patrols are estimated to cause a minor reduction in consequence potential and a modest reduction in failure probability for the 9,000 ft of pipeline.  The risk reductions for the 4,000 ft and the 5,000 ft segments are assessed and estimated to be a total of $500/yr less EL .

so, to compare…

$200 Anomaly

Choosing and Rejecting

this leads us to a critical aspect of PMM: a formal decision-process to determine not only when a project is selected but also, why other projects are NOT selected.

the answer is cost-benefit analyses; the most used, tested, and battle-hardened option. its also at the core of human nature: ALL decision-making is rooted in cost-benefit analyses.

Cost-Benefit

let’s repeat that last idea: cost-benefit is at the core of human nature behavior: ALL decision-making is rooted in cost-benefit analyses.

so, lest you believe that this is far too much of a ‘cold and calculating’ approach to decision-making, take a step back and consider this all-encompassing statement. we won’t get into the philosophical and behaviorial psychology underlying this claim, but you can certainly find tons of confirmations.

furthermore, when a cost benefit analysis is properly done, it points to the most efficient use of resources. This efficiency benefits the public as well as the operator. It is to no one’s advantage to spend our limited resources inefficiently.

A fundamental aspect of ALARP is cost-benefit analyses.

Decision Basis