The record-breaking Texas floods spawned by Hurricane Harvey drove news headlines with many stories of dramatic suffering and bravery. The disaster also presented many complications for companies struggling to service their customers following such a catastrophic event. A failure to rebound quickly can jeopardize customer relationships, and trigger substantial unanticipated expenses. In the oil and gas industry, such unplanned downtime can cost as much as a million dollars an hour.
Listed below are a series of steps designed to support a comprehensive emergency plan for oil and gas companies. These steps emphasize key post-disaster recovery actions needed for safe and quick return to online operations:
Step 1: Assess the situation – Ensure that all employees are accounted for and safe, and check affected sites for structural damage. Then activate the business continuity plan. While the plan is likely to address multiple layers, it is important to immediately ramp-up communications with employees, vendors and appropriate government agencies.
During a disaster like Hurricane Harvey, loss of power results in crippling ripple effects that quickly spread throughout the oil and gas enterprise. An initial assessment of electrical power system critical paths and emergency power systems should take place (like checking for available diesel generator fuel supply levels and available uninterruptible power supply battery capacities, so that employee safety and basic business function can be assured). Loss of power can cause cooling, heating and ventilation systems to fail; instigating fires, explosions and secondary disasters.
Step 2: Implement a mitigation strategy – To limit the level of post disaster business interruption, it is important to determine how operational information flows within a given facility (like a refinery) and to identify where the operational dependencies lie. In oil and gas refinery operations for example, it is critical for monitoring and control systems to still be able to function should the power go out in certain areas of the plant.
Monitoring and control depends upon the ability to receive communications from key operational sensors (like temperature and pressure sensors within tanks where liquids are being processed and moved and where valves are being controlled to open and shut at the proper precise moments). The monitoring systems then gather and assess this control data and provide that data to operators who then view it either on a computer screen or on their mobile devices. Therefore, the IT systems (which may be off site or at least partially in the cloud) need to be up and running. If the area where critical on-site IT components are housed is threatened, then power backup systems need to be in place, inspected and tested on a regular basis to make sure they are good to go in an emergency situation. Formulas for rerouting the information flow should be in place so that a partial collapse in systems does not result in a total collapse in operations.
Step 3: Test the new disaster plan – Any initial disaster will reveal the weaknesses of the existing disaster plan and require a reformulation so that a new plan emerges, one that needs to be subjected to rigorous testing. The testing process itself should be carried-out in an environment that realistically simulates authentic conditions. Testing disaster recovery plans, alarms and procedures, conducting plant inspections and reviewing facility incident reports are examples of business continuity effectiveness measurement practices. Whichever measurements are chosen, it is crucial that management assess the results.
There is a temptation to downplay poor results and offer sympathetic assessments of efforts. However, the time to take corrective actions is immediately after a defect is discovered. Every step that is taken sooner rather than later can save time, money and lives in the future. For example, oil and gas facilities are especially prone to fire risks. In fire scenarios, preventive action calls for periodic inspection of all electric appliances in the facility. What if management decides to perform the inspection less often than prescribed, (i.e., only once a year)? A review of the plant incident reports could disclose that two other appliances caused minor fires in the last three months. An annual review may prove too late to recognize “a gathering storm.” Once the plan has been tested and updated, the test procedures and results should be documented. All personnel required to implement the plan must undergo formal and ongoing training.
To learn more about how Schneider Electric can help the oil and gas industry take steps to mitigate the power-related impacts of a natural disaster, click here. Also, click here for more on how industrial UPS systems can protect your business-critical equipment. For overall best practices in leveraging technology to ensure business continuity, download our complimentary reference guide, “A Practical Guide to Achieving Oil & Gas Operational Efficiency through Digitization.”