PIPELINERISKASSESSMENT

TheEssentialElements
(FirstpublishedinPipeline&GasJournalMay,2012)

Aninitiativethroughcollaborationof

DNVandW.KentMuhlbauer

infousa@DNV.com
www.dnvusa.com
614.761.1214

PipelineRiskAssessmentTheEssentialElements:AninitiativethroughcollaborationofDNVandW.KentMuhlbauer
DetNorskeVeritasAllrightsreserved.

 GUIDELINESFORPIPELINERISKASSESSMENT
GUIDELINESFORPIPELINERISKASSESSMENT

Aninitiativethroughcollaborationof
Aninitiativethroughcollaborationof

DNVandW.KentMuhlbauer
DNVandW.KentMuhlbauer
UnderstandingPipelineRisk
UnderstandingPipelineRisk

Althoughpipelinescontinuetobethesafestwaytotransportfluidsoverlongdistances,accidentsstillthreatenthe
Althoughpipelinescontinuetobethesafestwaytotransportfluidsoverlongdistances,accidentsstillthreatenthe
publicand/orenvironment,exposingtheindustrytoscrutiny.Concernsaboutmanagingtheserisksarereflectedin
publicand/orenvironment,exposingtheindustrytoscrutiny.Concernsaboutmanagingtheserisksarereflectedin
PHMSAsrecentpublicmeetingsandintheAdvancedNoticeofProposedRuleMaking(ANPRM)ofJanuary,2011.
PHMSAsrecentpublicmeetingsandintheAdvancedNoticeofProposedRuleMaking(ANPRM)ofJanuary,2011.
OneofPHMSAsprimaryaimsistoestablishbetterriskassessmentleadingtoimprovedintegritymanagementand
OneofPHMSAsprimaryaimsistoestablishbetterriskassessmentleadingtoimprovedintegritymanagementand
increasedpublicsafety.
increasedpublicsafety.

EssentialElementsofPipelineRiskAssessment
EssentialElementsofPipelineRiskAssessment

Incollaboration,DNVandW.KentMuhlbauerintroduce
Incollaboration,DNVandW.KentMuhlbauerintroduce
animportantsetofguidelinestoaddressaspectsof
animportantsetofguidelinestoaddressaspectsof
pipelineriskassessmentnotwelldevelopedinexisting
pipelineriskassessmentnotwelldevelopedinexisting
industrystandardsguidelinesthatoptimizetherisk
industrystandardsguidelinesthatoptimizetherisk
assessmenteffortsofbothoperatorsandregulators.
assessmenteffortsofbothoperatorsandregulators.
DNVisagloballeaderinintegrityandriskmanagement
DNVisagloballeaderinintegrityandriskmanagement
whileMr.Muhlbauerisaleadingauthorityonpipeline
whileMr.Muhlbauerisaleadingauthorityonpipeline
riskmanagement.Thisjointeffortprovidesan
riskmanagement.Thisjointeffortprovidesan
immediatelyusefulsetofcommonsensetacticstomake
immediatelyusefulsetofcommonsensetacticstomake
riskassessmentmoremeaningful,defensible,and
riskassessmentmoremeaningful,defensible,and
acceptabletoregulators.Wehaveorientedthese
acceptabletoregulators.Wehaveorientedthese
guidelinestodirectlysatisfyPHMSAsstatedgoalof
guidelinestodirectlysatisfyPHMSAsstatedgoalof
smarterriskassessment.
smarterriskassessment.
Ourguidelinesofferaformalizedprocesswithlogical,
Ourguidelinesofferaformalizedprocesswithlogical,
structuredapproachestoefficientlyintegrateallavailable
structuredapproachestoefficientlyintegrateallavailable
informationintoarobustriskassessment.Theguidelines
informationintoarobustriskassessment.Theguidelines
areintentionallyconciseyetflexible,allowingtailored
areintentionallyconciseyetflexible,allowingtailored
solutionstosituationspecificconcerns.Atthesame
solutionstosituationspecificconcerns.Atthesame
time,anappropriatelevelofstandardizationis
time,anappropriatelevelofstandardizationis
incorporatedtomanageexpectationsofregulatorsaswell
incorporatedtomanageexpectationsofregulatorsaswell
asthoseregulated.
asthoseregulated.
Theseinitialguidelinesestablishabasicriskassessment
Theseinitialguidelinesestablishabasicriskassessment
frameworkfromwhichtobuild.Discussionbeyondthe
frameworkfromwhichtobuild.Discussionbeyondthe
essentialspresentedherewillbeavailableinsubsequent
essentialspresentedherewillbeavailableinsubsequent
guidancedocuments.
guidancedocuments.

SmarterRiskAssessment
SmarterRiskAssessment
Measuresriskinverifiableunits
Measuresriskinverifiableunits
Calculatesfailureprobabilitiesgroundedin
Calculatesfailureprobabilitiesgroundedin

engineeringprinciples
engineeringprinciples
Fullycharacterizesconsequenceoffailure
Fullycharacterizesconsequenceoffailure
Profilesriskalongapipeline
Profilesriskalongapipeline
Integratesallpipelineknowledge
Integratesallpipelineknowledge
Promotesaccuratedecisionmaking
Promotesaccuratedecisionmaking
Controlsthebias
Controlsthebias
Ensuresproperaggregation
Ensuresproperaggregation

IntendedOutcomes
IntendedOutcomes
Efficientandtransparentriskmodeling
Efficientandtransparentriskmodeling
Accurate,verifiable,andcompleteresults
Accurate,verifiable,andcompleteresults
Improvedunderstandingofactualrisk
Improvedunderstandingofactualrisk
Riskbasedinputtoguideintegritydecision
Riskbasedinputtoguideintegritydecision

makingtrueriskmanagement
makingtrueriskmanagement
Optimizedresourceallocationleadingto
Optimizedresourceallocationleadingto

higherlevelsofpublicsafety
higherlevelsofpublicsafety
Appropriatelevelofstandardization
Appropriatelevelofstandardization

facilitatingsmootherregulatoryaudits
facilitatingsmootherregulatoryaudits
Expectationsofregulators,thepublic,and
Expectationsofregulators,thepublic,and

managementfulfilled
managementfulfilled

infousa@DNV.com
infousa@DNV.com
www.dnvusa.com
www.dnvusa.com
614.761.1214
614.761.1214

PipelineRiskAssessmentTheEssentialElements:AninitiativethroughcollaborationofDNVandW.KentMuhlbauer
PipelineRiskAssessmentTheEssentialElements:AninitiativethroughcollaborationofDNVandW.KentMuhlbauer
DetNorskeVeritasAllrightsreserved.
DetNorskeVeritasAllrightsreserved.

1 1

PIPELINERISKASSESSMENTTHEESSENTIALELEMENTS
Thisdocumentsetsforthessentialelementsforapipelineriskassessment.Theirutilizationensuresthat
meaningfulriskestimatesareproduced.Furthermore,adoptionoftheseminimumelementsfacilitates
efficientandconsistentregulatoryoversightandhelpsmanageexpectationsofallstakeholders.
Theessentialelementsareintentionallyaveryshortlist,providingafoundationfromwhichtobuilda
comprehensive(ormodifyanexisting)riskassessmentprogram.Theysupplementexistingindustry
guidancedocumentsonriskassessmentandthereforedonotrepeattheimportantissuesaddressedthere.
Applicationoftheseelementsiseasyandintuitive,asisshowninasamplecasestartingonPage5.These
essentialelementsandotheraspectsofpipelineriskassessmentwillbefullydetailedinsubsequent
guidancedocuments.

1. MeasureinVerifiableUnits

Theriskassessmentmustincludeadefinitionoffailureandproduceverifiableestimatesoffailure
potential.Therefore,theriskassessmentmustproduceameasureofprobabilityoffailure(PoF)anda
measureofpotentialconsequence.
Bothmustbeexpressedinverifiableandcommonlyusedmeasurementunits,freefromintermediate
schemes(suchasscoringorpointassignments).Failureprobability,whichcanalsobeexpressedasa
frequency,mustcaptureeffectsoflengthandtime,leadingtoriskestimatessuchasleakspermileper
yearorcosts/kmyear,etc.

2. GroundProbabilityofFailureinSoundEngineeringPrinciples

AllplausiblefailuremechanismsmustbeincludedintheassessmentofPoF.Everyfailuremechanismmust
havethefollowingthreeelementsindependentlymeasured:
Exposure(attack)Thetypeandunmitigatedaggressivenessoftheforceorprocessthatmayprecipitate
failure.Examplemeasurementunitsareeventspermileyearormilsperyearmetalloss.
Mitigation(defense)Thetypeandeffectivenessofeverymitigationmeasuredesignedtoblockor
reduceanexposure.Thebenefitfromeachindependentmitigationmeasure,coupledwiththecombined
effectofallmitigations,istobeestimated.
Resistance(survivability)Theinherentabilityofapipelinetosustainforcesanddeformationsinthe
eventofmitigationfailure.Resistancecharacteristicsaretobeevaluatedseparatelytodeterminethe
probabilityofdamagewithoutfailurevs.damageresultinginfailure.
Foreachtimedependentfailuremechanism,atheoreticalremaininglifeestimatemustbeproducedand
expressedasafunctionoftime.

3. FullyCharacterizeConsequenceofFailure

Theriskassessmentmustidentifyandacknowledgethefullrangeofpossibleconsequencescenarios
associatedwithfailure,includingmostprobableandworstcasescenarios.

PipelineRiskAssessmentTheEssentialElements:AninitiativethroughcollaborationofDNVandW.KentMuhlbauer
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PIPELINERISKASSESSMENTTHEESSENTIALELEMENTS(continued)
4. ProfiletheRiskReality

Theriskassessmentmustproduceacontinuousprofileofchangingrisksalongtheentirepipeline,
recognizingthechangingcharacteristicsofthepipeanditssurroundings.Theriskassessmentmustbe
performedatallpointsalongthepipeline.

5. IntegratePipelineKnowledge

Theassessmentmustincludecomplete,appropriate,andtransparentuseofallavailableinformation.
Appropriatenessisevidentwhentheriskassessmentusesallinformationinsubstantiallythesamewaythat
asubjectmatterexpert(SME)usesinformationtoimprovehisunderstandingofrisk.

6. IncorporateSufficientGranularity

Foranalysispurposes,theriskassessmentmustdividethepipelineintosegmentswhererisksare
unchanging(i.e.allriskvariablesareessentiallyunchangingwithineachsegment).Duetofactorssuchas
hydraulicprofileandvaryingnaturalenvironments,mostpipelineswillnecessitatetheidentificationofat
leastfivetotensegmentspermilewithsomepipelinesrequiringthousandspermile.Compromises
involvingtheuseofaveragesorextremes(i.e.maximums,minimums)tocharacterizeasegmentcan
significantlyweakentheanalysesandaretobeavoided.

7. ControltheBias

Theriskassessmentmuststatethelevelofconservatismemployedinallofitscomponentsinputs,
defaults(appliedintheabsenceofinformation),algorithms,andresults.Theassessmentmustbefreeof
inappropriatebiasthattendstoforceincorrectconclusionsforsomesegments.Forexample,theuseof
weightingsbasedonhistoricalfailurefrequenciesmaymisrepresentlowerfrequencyalbeitimportant
threats.

8. UnmaskAggregation

Aproperprocessforaggregationoftherisksfrommultiplepipelinesegmentsmustbeincluded.Fora
varietyofpurposes,summarizationoftheriskspresentedbymultiplesegmentsisdesirable(e.g.fromtrap
totrap).Suchsummariesmustavoidsimplestatistics(i.e.averages,maximums,etc.)orweightedstatistics
(lengthweightedaverages,etc.)thatmaymasktherealriskspresentedbythecollectionofsegments.Use
ofsuchsummarizationstrategiesoftenleadstoincorrectconclusionsandistobeavoided.

AnEssentialElementsSampleCasecanbefoundstartingonPage5.

PipelineRiskAssessmentTheEssentialElements:AninitiativethroughcollaborationofDNVandW.KentMuhlbauer
DetNorskeVeritasAllrightsreserved.

Expectationsforpipelineriskassessmentgobeyondmanypipelineoperatorscurrent
methodologies.TheDNV/Muhlbauerteamstandsreadytoimproveexistingriskassessment
programsortohelpestablishnew,comprehensiveprograms.
DNVisrecognizedbypipelineoperatorsandregulatorsalikefor
itscredibility,reliabilityandtechnicalexpertise.Ournear150
yearheritageasanindependentfoundationhasgarnereda
reputationasatrusted3rdparty.
DNVacquireditsNorthAmericanpipelinebusinessunit,
(previouslyCCTechnologies)in2005.Ourresearchscientists
andengineeringsubjectmatterexperts(SMEs)arebackedby
industryleadinglaboratoriesformaterials/technologytesting
andverification,failureanalysis,degradation,mechanical
integrityandriskmanagement.
DNVhasbeenformidablyinvolvedinthepostfailureresponse
and/orforensicinvestigationofvirtuallyeverymajorUS
pipelinefailureoverthepastquartercentury.

W.KentMuhlbauerisaninternationallyrecognizedauthority
onpipelineriskmanagementandishighlysoughtafterasan
author,lecturerandconsultant.Heactsasadvisortoprivate
industry,governmentalagenciesandacademiaworldwide.
Mr.Muhlbauerhasextensivebackgroundinpipelinedesign,
operationsandmaintenance,havingheldtechnicaland
managementpositionsinapipelineoperatingcompanyfor
manyyearspriortobecomingariskmanagementconsultant.
Mr.Muhlbauerspublishedworks,includingPipelineRisk
ManagementManualnowinits3rdedition,arelargely
consideredbythepipelineindustryasgotosourcesfor
pipelineriskmanagement.

Thiscollaborationlooksforwardtocontinuingsupportofthiscriticalissueandallothertechnical
aspectsofpipeliningworldwide.

infousa@DNV.com
www.dnvusa.com
614.761.1214

PipelineRiskAssessmentTheEssentialElements:AninitiativethroughcollaborationofDNVandW.KentMuhlbauer
DetNorskeVeritasAllrightsreserved.

SampleCase:
PipelineRiskAssessment
ThefollowingexampleillustratestheapplicationoftheEssentialElementsinapipelineriskassessment.
TheElementsareinherentlyflexibleallowingforalternative,yeteffective,approacheswhilethe
methodologyestablishesadesirablelevelofrigorforassessingrisk.Allriskcalculationsareefficiently
performedinavarietyofsoftwareenvironmentsnospecializedsoftwareisrequired.
Scenario:
A120milepipelineistohaveariskassessmentperformed.For
theassessment,failureisdefinedaslossofintegrityleadingtolossofpipeline
product.Consequencesaremeasuredaspotentialharmtopublichealth,
propertyandtheenvironment.

'Failure'and'Consequences'
clearlydefined

Verifiablemeasurementunitsfortheassessmentareasfollows:

MEASUREMENT UNITS
Risk
ProbabilityofFailure(PoF)
ConsequenceofFailure(CoF)
TimetoFailure(TTF)
Exposure
Mitigation
Resistance

$/year
failures/mileyear
$/failure
years
events/mileyear ormpy
%
%

Measuringinverifiableunits
keepsprocesshonest:

Fulldataintegration

Minimumdata(asdefined,forexample,inASMEB31.8S)arecollectedand

Sufficientresolution

includeSubjectMatterExpert(SME)estimateswheremeasurementdataare

unavailable.Thecollecteddatashowchangesinriskalongthepipelineroute
6,530segmentsarecreatedbythechangingdatawithanaveragelengthof87
ft.Thisensuresthatariskprofilewithadequatediscriminationisgenerated.
ThelevelofconservatismusedisdefinedasP90forallinputsthatarenot
basedonactualmeasurements.Thismeansthatanunderestimationofactual
riskwillariseonlyonceforeveryteninputs(i.e.theinputwillonly
underestimatethetruevalue10%ofthetimeandoverestimateactualrisk
90%ofthetime).Theriskassessorshavechosenthislevelofconservatismto
accountforplausible(albeitextreme)conditionsandensurethatrisksarenot
underestimated.
Forassessingprobabilityoffailure(PoF)fromtimeindependentfailure

Understandableterms
Calibratedtoreality
Meaningful,applicableresults

BiasControl:Clearlydefined
levelofconservatism

Groundingin
soundengineeringprinciples:

Providesafirmbasisin
science
Helpsprovidearational,
defensibleassessment

mechanisms,thetoplevelequationselectedbyriskassessorsisasfollows:
PoFtimeindependent=exposurex(1mitigation)x(1resistance)

Pipeline Risk Assessment The Essential Elements: An initiative through collaboration of DNV and W. Kent Muhlbauer
Det Norske Veritas

All rights reserved.

Thisequationisappliedtoeverytimeindependentthreatateverypointalong
thepipeline.AsanexampleforapplyingthistoPoFduetothirdparty
damage,thefollowinginputsareidentified(bySMEs)forcertainportionsof
thesubjectpipeline.Here,byindependentlymeasuringtheattacks,defenses
andsurvivability,theanalysispromotesafullunderstandingofthePoF:

Exposure(unmitigatedattack)isestimatedtobethree(3)third
partydamageeventspermileyear.

Usingamitigation(defense)effectivenessanalysis,SMEsestimate
that1in50oftheseexposureswillnotbesuccessfullypreventedby
existingmitigationmeasures.Thisresultsinanoverallmitigation
effectivenessestimateof98%mitigated.

Oftheexposuresthatresultincontactwiththepipe,SMEsperform
ananalysistoestimatethat1in4willresultinfailure,notjust
damage.Thisestimateincludesthepossiblepresenceofweaknesses
duetothreatinteractionand/ormanufacturingandconstruction
issues.So,thepipelineinthisareaisjudgedtohavea75%resistance
tofailure(survivability)fromthismechanism,oncecontactoccurs.

ts

GainfullunderstandingofPoF:
Measuretheattacks,defenses,
andsurvivabilityindependently

Produceusefulestimates
evenwhendataisscarce

Verifiableunitsofmeasure,
evenforestimates

Theseinputsresultinthefollowingassessment:
PoFthirdpartydamage=(3damageeventspermileyear)x(198%mitigated)x(175%resistive)=
1.5%(0.015)permileyear(afailureevery67yearsatthislocation)
Notethatausefulintermediatecalculation,probabilityofdamage(damage
shortoffailure),emergesfromthisassessmentandcanbeverifiedbyfuture
inspections.
ProbabilityofDamagethirdparty=(3damageeventspermileyear)x(198%mitigated)=
0.06damageevents/mileyear(damageoccurringaboutonceevery17years)
InassessingPoFduetotimedependentfailuremechanisms,thepreviousalgorithmsareslightlymodified:
PoFtimedependent=(TTFtimedependent)
TTFtimedependent=resistance/[exposurex(1mitigation)]
Tocontinuetheexample,SMEshavedeterminedthat,atcertainlocationsalongthe120milepipeline,soil
corrosivityleadsto5mpyexternalcorrosionexposure(ifunmitigated).ExaminationofcoatingandCP
effectivenessleadsSMEstoestimateamitigationeffectivenessof90%atthissamplelocation.Pipestrength
obtainedfrominspections,pressuretests,andmanufacture/constructionconsiderations,adjustedforuncertainty,
resultinaneffectivepipewallthicknessestimateof0.220(remainingresistance).

Pipeline Risk Assessment The Essential Elements: An initiative through collaboration of DNV and W. Kent Muhlbauer
Det Norske Veritas

All rights reserved.

UseoftheseinputsinthePoFassessmentisshownbelow:
TTF=220mils/[5mpyx(190%)]=440years
PoF=1/TTF1=[5mpyx(190%)]/220mils=0.23%PoF
AswiththetimeindependentPoFestimates,theseequationsareappliedfor
eachtimedependentthreat(i.e.corrosionandcracking)atalllocationsalongthe
120milepipeline.
Next,potentialconsequencesareassessed.Fullycharacterizingconsequence
offailureprovidestheopportunityfortheoperatortoconsiderconsequence
controlasanelementofriskmanagement.Usingquantifiablemeasuresof
consequenceensurestheresultsarerobustandforcesconsistencyinselecting
preventionandmitigationmeasures.
Inthiscase,SMEshaveanalyzedpotentialconsequencesanddeterminedthe
rangeofpossibleconsequencesgeneratedbyvariousfailurescenarios.This
companyhasdecidedtomonetizeallpotentialconsequencesintheirrisk
assessments.Afterassignmentofprobabilitiestoeachscenario,apointestimate
representingthedistributionofallfuturescenariosyieldsthevalueof$11,500
perfailureatthissamplelocation.

Riskassessmentusesdataas
wouldanSME

Properaggregationof
riskestimates

Riskestimatesinverifiableunits

Generateariskprofiletovisualize
changingrisksalongthepipeline

Criticalinputfor
definingstrategicfocus:

Atthislocation,theabovemethodologiesareappliedandtotalrisksare

Maintenance
Operational
Regulatory
Riskinformeddecisions

estimatedtobe0.008failures /yearx$11,500/failure=$92/year.
Riskassessorsrepeatthesamplecalculationsshownaboveforeverythreatoneachofthe6,530segments
comprisingthispipeline.ToestimatePoFforanyportionofthe120milepipelinei.e.aggregationfortrapto
trapPoFaprobabilisticsummationisusedtoensurethatlengtheffectsandtheprobabilisticnatureofestimates
areappropriatelyconsidered.Toestimatetotalrisk,anexpectedlosscalculationforthefull120milesyieldsa
valueof$25,100/yearwithpermilevaluesrangingfrom$42/mileyearto$1,208/mileyearforspecificportionsof
thesystem.
Thecompanyusesthesevaluestocompareto,amongotherbenchmarks,aUSnationalaverageof$350/mileyear
forsimilarpipelines.
ThissamplecaseillustratestheintendedapplicationofTheEssentialElementsofPipelineRiskAssessment,first
publishedinPipeline&GasJournal(May,2012)andfoundintheprecedingpages.TheEssentialElementscan
alsobefoundathttp://www.dnvusa.com/news_events/news/2012/PipelineRiskAssessnebt.asp.

PoFas1/TTFisoneofmanypossiblerelationshipsrelatingPoFtoTTF.

Theaggregateofallfailuremechanismspotentiallycausingfailureonthispipelinesegment

Pipeline Risk Assessment The Essential Elements: An initiative through collaboration of DNV and W. Kent Muhlbauer
Det Norske Veritas

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7
Reprinted with permission from Pipeline & Gas Journal, May 2012. On the web at www.pgjonline.com.
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