1. Process Hazard Analyses: The Best Methodologies & Processes for your Organization Panelist Speaker Sajjad Gul, Dir. Business Dev. Rob Bartlett, PSM Consultant Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting Zafar Ahmed, Mktng Manager Host

2. Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting About – 360factors

3. Rob Bartlett owns Pareto Engineering & Management Consulting. He uses his over 20 years of experience to partner with companies to create World Class Process Safety Systems. About – Pareto Eng. & Consulting Management Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

4. About Us – Consulting Solutions Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

5. 7 Offices in 4 Countries Our Presence INDUSTRY FOCUSED Chemicals Oil & Gas Mining Manufacturing Manila, Philippines Karachi, Pakistan Austin, TX (US HQ) INDUSTRY FOCUSED $40M+ REVENUE 400+ EMPLOYEES GLOBAL PRESENCE Toronto, Canada Corpus Christi, TX San Diego, CA Houston, TX

6. Client Concentration - Utilities- 40% market share in North America including NERC (regulator) - EHS- 30% of our business comes from EHS solutions Client Concentration - Utilities- 40% market share in North America including NERC (regulator) - EHS- 30% of our business comes from EHS solutions Our Clients & Industry Focus

7. 1984 – Bhopal, India 2000+ fatalities. 170 injuries 2005 – Texas City 15 fatalities. 170 injuries 1974 – Flixborough, England 28 fatalities. unknown injuries 1984 – Mexico City 650 fatalities. unknown injuries 2014 – Texas City 4 fatalities. unknown injuries Why Process Safety? Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

8. Costs and Benefits of Good Safety Performance What we see Direct Costs of Injuries  Medical costs  Wage indemnity  Claims administration fees What we don’t see The Hidden Costs of Injuries  Damaged equipment, vehicles & goods  Lost production and quality  Process interruptions, yield losses  Replacement labor / Overtime  General liability costs  Litigation  Damage to customer relations & public image Direct Cost Indirect Cost 5X Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

9. Process Hazard Analyses The Best Methodologies & Processes for your Organization Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

10. Agenda:  Training Objectives  OSHA Requirements  Methodologies - Basic - Advanced  Keys to Excellent PHAs  Questions Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

11.  At the end of the webinar, we hope that you:  Understand the requirements that OSHA has for PHAs  Understand various tools and methodologies for PHAs that can be used on a Covered Process  Understand a process that can be used to conduct a PHA, from preparation through completion Training Objectives Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

12.  OSHA requires PHAs for PSM-Covered Processes  Invest to reduce risk of catastrophic and serious incidents that effect employees and the community  Invest to reduce risk of significant business interruption caused by incidents You cannot afford an explosion… a toxic release… a fatality… Why spend the time & money on PHAs?

13. Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting  Need PHA on covered processes initially & every 5 years  appropriate to the complexity of the process  identify, evaluate, and control the hazards involved in the process  use one or more of the specified methodologies as appropriate to determine and evaluate the hazards of the process being analyzed  PHA team needs expertise in process as well as PHA methodology OSHA Requirements – 1910.119(e)

14. Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting OSHA Requirements – 1910.119(e) (Contd.)  Need system to “promptly” address recommendations  PHA must address:  hazards of the process;  previous incidents that could have catastrophic consequences  engineering & administrative controls  consequences of failure of controls  facility siting & human factors  qualitative evaluation of a range of the possible safety and health effects of failure of controls on employees

15. Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting  Basic methodologies all have the same approach:  Brainstorm potential deviations  Determine potential consequences of each deviation  Identify any existing safeguards to prevent the deviation  Qualitatively assess the risk of the deviation causing the consequence  If needed, determine recommendations to reduce risk  Methodology chosen depends on:  the level of hazard  the process complexity  level of understanding of the process Basic PHA Methodologies

16.  Checklist - Uses list of hazard review questions to prompt brainstorming for hazards  What-If - Loosely structured or unstructured brainstorming for accident scenarios  What-If/Checklist - Similar to What-If but uses categories to provide more structure than What-If  Hazard & Operability Study (HAZOP) - Uses guidewords to structure brainstorming of deviations  Failure Mode and Effects Analysis (FMEA) - Discusses each mode of potential failure of each component of a process Basic PHA Methodologies (Contd.) Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

17.  Used primarily for scenarios that need quantitative analysis  Layers of Protection (LOPA)  Fault Tree Analysis  Event Tree Analysis  On average, only 1% - 5% of scenarios need this level of analysis  Many PSM processes do not pose an adequate risk to require Rigorous PHA Methodologies

18. Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting Generic PHA Process. Prepare. Conduct PHA. Report & Communicate. Management Review and Implementation

19. Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting  Choose a Facilitator  Can be internal or external resource  Select cross-functional team  Operators  Maintenance  Supervision  Engineering  Others as needed – e.g. chemists, corrosion experts, contractors  Best if Facilitator not filling another role Generic PHA Process - Preparation

20. Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting Generic PHA Process – Preparation (Contd.)  Gather & prepare Process Safety Information (PSI)  Process Flow and Process & Instrumentation Diagrams Verify that they are up-to-date and accurate  Any other pertinent engineering drawings Ventilation Design Fire Suppression System Design Electrical Classification Drawings  Most recent SDS’s Raw materials, intermediates, and final products  Other information should be available if needed

21. Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting Generic PHA Process – Preparation (Contd.)  Define PHA Nodes - Using Process Flow Diagram

22. Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting Generic PHA Process – Preparation (Contd.)  Define PHA Nodes – Using P&IDs

23. Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting Generic PHA Process – Preparation (Contd.)  Prepare a list of all changes (MOCs) completed since the last PHA  Prepare a list of all incidents involved with the process since the last PHA  Include incidents at other similar facilities within the company and from other companies

24. Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting  Gather team in an area separate from the process  Choose PHA Methodology  Generate scenarios and assess risk  Most companies use a risk matrix based on severity and frequency to determine risk  For scenarios that the team deems risk should be reduced, document recommendations Generic PHA Process – Analysis

25.  Example of a What-If Analysis NodeWhat if…ConsequencesSafeguards ReactorOperator fails to close the hatch fully? Escape of flammables into the room with risk of fire/explosion 1)Hatch proximity switch alarms and is interlocked to reactor heat 2)Area is rated Class I, Div. 1 ReactorRupture disk fails and reactor pulls a vacuum? Suck oxygen into an environment with flammable hot flammable liquids 1)Rupture disk tellback alarms if failure under vacuum ReactorReflux valve fails closed? All liquid would boil off and polymer would harden in the reactor – operability issue only 1)Top of column temp controlled by PLC & alarm for high temp Generic PHA Process – Analysis (Contd.) Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

26.  Example of HAZOP NodeVariableKeywordConsequencesSafeguards ReactorPressureHighVessel rupture causing severe injuries and equipment/building damage 1)Pressure control by PLC 2)Rupture Disk with tellback ReactorPressureLowNo consequences of interest1) Vessel rated for full vacuum ReactorTemperatureHighRunaway reaction leading to excessive pressure build-up with potential vessel rupture causing severe injuries and equipment/building damage 1)Temperature control of hot oil system by PLC 2)Rupture Disk with tellback Generic PHA Process – Analysis (Contd.) Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

27.  Example of an FMEA NodeFailure Mode Possible Cause ConsequencesSafeguards Drum packoutIgnition of flammable vapors 1)Static discharge from personnel 2)Static discharge from equipment 3)Static discharge from excessive flow rate Flash fire at drum causing potentially serious injury 1)Operators are bonded to discharge piping 2)-All equip is grounded - Ground Verification System to ground drum 3)Orifice in pipe limits flow to below critical rate Generic PHA Process – Analysis (Contd.)

28.  Risk Rating Example - Severity Generic PHA Process – Analysis (Contd.) Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

29.  Risk Rating Example – Severity Generic PHA Process – Analysis (Contd.) Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

30.  Risk Matrix Example - Frequency Generic PHA Process – Analysis (Contd.) Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

31.  Risk Matrix Example – Risk Ranking Generic PHA Process – Analysis (Contd.) Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

32.  Example of full PHA Worksheet NodeFailure Mode Possible Cause ConsequencesSafeguardsSevFreqRiskRecommendation Drum packout Ignition of flammabl e vapors Static discharge from personnel Flash fire at drum causing potentially serious injury Newson-Gale Ground Verification System 32MBond operators to drum via wrist strap Generic PHA Process – Analysis (Contd.)

33.  If any scenarios are high risk, use an advanced method:  Layers of Protection (LOPA)  Fault Tree Analysis  Event Tree Analysis Generic PHA Process – Analysis (Contd.) Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

34.  Examples of Recommendations  Consider installing proximity switch on valve and interlocking to pump.  Verify that inspection and testing of relief device is adequate.  Consider installing flow meters that can be connected to the PLC and implementing interlocks to prevent overfill.  Keys to success  Do not be too prescriptive  Not every item needs a recommendation – risk or existing safeguards can be adequate Generic PHA Process – Analysis (Contd.) Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

35.  Document PHA with Recommendations  Generate a report that includes: specifics about the PHA sessions (e.g. attendees, job positions, dates and times) fully document all scenarios, risks assessments, & recommendations  Communicate results to Management & Affected Employees  Affected employees include those who work in areas that are or may be effected by scenarios and recommendations Generic PHA Process - Reporting Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

36.  Management Review of PHA Team’s Recommendations  for any rejected, document the reason for rejection  report the results of Management Review to PHA Team to allow for rebuttal if necessary.  Implement accepted Recommendations  no specific requirement for timing  develop closure timing policy based on risk  Once all are complete:  document disposition of all Recommendations in a final report  communicate to Management and all Affected Employees Generic PHA Process - Implementation Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

37.  Choose an excellent, multidisciplinary team  Allow team sufficient time to complete PHA  Always consider previous incidents  Always evaluate designed and engineered safeguards  Always evaluate human errors and Human/Machine Interfaces (HMI)  Include evaluation of relevant external influences (e.g., weather, earthquakes, etc.)  Analyze for hazards during all modes of operation (e.g. start-up, shutdown, emergency shutdown, start-up after an emergency) Keys to Excellent PHAs Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

38. Q&A At the end of the day, safety is all about care, saving lives, families, and the society we operate in. Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting

39. NEXT WEBINAR  Topic: Mechanical Integrity  February 26 at 2:00PM CST  Webinar Invitation will be emailed Copyright: All rights reserved by 360factors Inc., and Pareto Eng. and Management Consulting