20 August 2011

Energy Sector: Change Management Risk...

The Energy Sector has operated for years with an "Operations Integrity Management System" framework. The Operational Risk Factors are spelled out clearly:

Behavior-based processes for reducing risks of incidents, including personnel safety, process safety, security, and environmental considerations, are in place. It is expected that:

employees and contractors consistently recognize and proactively mitigate operational, procedural, and physical hazards

employees and contractors proactively and routinely identify and eliminate their at-risk behaviors and those of their co-workers

Human Factors, workforce engagement, and leadership behaviors are addressed

• behaviors, at-risk conditions, and other precursors that can lead to incidents are recorded, analyzed, and addressed

The BP Macondo incident has brought to light several areas that will be more highly scrutinized by federal oversight going forward in the Energy Sector. It is inevitable that those companies operating with deep drilling operations will continue to focus on their decades of experience on a management system that instills both safety and security. This will not be enough however in these desperate times with so many new threats and hazards, in the search for new oil reserves hundreds of miles off shore.

In the U.S., the Workplace Safety Rule was published in the Federal Register on October 15, 2010 to incorporate lessons that have been learned from the Deepwater Horizon disaster. Under the rule, there are four relevant areas that are now covered that the previous regulation did not:

  • Hazard Analysis
  • Management of Change
  • Operating Procedures
  • Mechanical Integrity

We would like to emphasize "Management of Change" and the human factors that are a major challenge to regulate. All operators under U.S. regulation with the enactment of the Drilling Safety Rule and the Workplace Safety Rule, are now required to identify and document potential risks. This will directly impact the accountability for risk assessment and mitigation. These new prescriptive rules for deepwater drilling, directly impact those operators to implement a Safety and Environmental Management System (SEMS) per the law.

Now back to "Management of Change." Change Management is an Operational Risk that has been a continuous challenge. The exception is exemplified by those organizations that have dedicated themselves to a continuous Plan-Do-Check-Act (PDCA) life cycle, inherent to their corporate culture. What are some of the tools and standards that can be implemented in your management system that can assist you in getting to the next level?

Emergencies, crises and disasters like the tsunami in Japan or the recent riots in London, can happen at any time. Organizations around the world are increasingly implementing risk management processes to deal with uncertainty and ensure continuity. But if their suppliers are unable to deliver, or customers unable to purchase, the ability of an organization to achieve its objectives would be compromised. Security management systems for the supply chain to promote resilience at every step of the supply chain, ISO has developed a new standard, ISO 28002:2011, Security management system for the supply chain – Development of resilience in the supply chain.

This International Standard will not only incorporate the PDCA model for quality assurance and change management but also the security of the supply chain. Another area of concern for regulators going forward will be the number of contractors and sub-contractors relationships. A set of global international standards such as ISO 28000 series or ISO 31000 is the correct path for the operator and private sector organization to demonstrate to the U.S. regulators that they are already in the process of managing change effectively in their organization.

Operational Risk Management in the Energy Sector will remain a high priority for the simple fact that it is square one for being a good custodian of the environment and to perpetuate a safe and secure workplace for employees and contractors.

ISO 28002 can be applied to any organization including private, not-for-profit, non governmental, and public sector. Implemented within a management system, the standard enhances an organization’s capacity to manage and survive any disruptive event and take appropriate actions to help ensure its viability and continued operation.

Achieving a continuous change management framework that the regulators will recognize as global best practice and that is monitored consistently, is a prudent strategy for all the members of the Marine Well Containment Company (MWCC). We can only hope, that those who have not yet embarked on this important mission, will be doing so before they take on that next unexplored frontier beyond 5,000 feet below the surface of the ocean.

WASHINGTON — Washington announced on Friday (August 19th, 2011) it would resume the sale of offshore drilling licenses in the Gulf of Mexico, where the BP disaster 16 months ago unleashed the worst maritime oil spill in history.

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