Purpose: Find the Balance

People

Profit

Equipment

Customers

Environment

Stakeholders

Upon completion of this course you will be able to:

Identify hazards and a range of Health, Safety,

and Environmental (HSE) problems when at a
job site
Recognize the value of managing HSE risks to
both the employee and customer
Plan projects with HSE as one of the risk
factors
Apply risk management techniques when
making business decisions

Piper Alpha Disaster

Piper Alpha Disaster

Lessons Learned
Safety is a responsibility of Management
A systematic approach to safety is necessary
The quality of management is important
High quality auditing is needed
The sum of the quality of our individual contributions
to the management of safety determines whether the
colleagues we work with live or die.

Value of Good HSE Performance

Moral - Its the right thing to do
Employee Morale
Customer Satisfaction
Improve Job Performance

Incident Cost Iceberg

Injury & Illness Costs

$1
$5 to $50
Ledger Costs
of
Property Damage
(Uninsured Costs)
$1 to $3
Uninsured
Miscellaneous
Costs

Medical
Compensation Costs (Insured Costs)
Environmental Liability Insurance Costs

Building Damage
Remedication Costs (3rd Party Environmental Claims)
Tool and equipment damage
Product and material damage
Production delays and interruptions
Legal expenses
Expenditure of emergency supplies and equipment
Interim equipment rentals
Investigation time
Wages paid for time lost
Cost of hiring and/or training replacements
Overtime
Extra supervisory time
Clerical time
Decreased output of injured worker upon return
Loss of business and good will

Good HSE Performance improves Bottom-Line

IN TIMES OF KEEN COMPETITION AND LOW PROFIT MARGINS, LOSS
CONTROL MAY CONTRIBUTE MORE TO PROFITS THAN AN ORGANIZATIONS
BEST SALESMEN.
It is necessary for the salesman of a business to sell an additional $1,667,000 in products to pay the costs
of $50,000 in annual losses from injury, illness, damage or theft, assuming an average profit on sales of
3%. The amount of sales required to pay for losses will vary with the profit margin.
Yearly
Incident
Costs
$1,000
5,000
10,000
25,000
50,000
100,000
150,000
200,000

PROFIT MARGIN
1%

2%

3%

4%

100,000
500,000
1,00,000
2,500,000
5,000,000
10,000,000
15,000,000
20,000,000

50,000
250,000
500,000
1,250,000
2,500,000
5,000,000
7,500,000
10,000,000

33,000
167,000
333,000
833,000
1,667,000
3,333,000
5,000,000
6,666,000

25,000
125,000
250,000
625,000
1,250,000
2,500,000
3,750,000
5,000,000

5%
20,000
100,000
200,000
500,000
1,000,000
2,000,000
3,000,000
4,000,000

SALES REQUIRED TO COVER LOSSES

This table shows the dollars of sales required to pay for different amounts of costs for accident losses, i.e., if an
organization' profit margin if 5%, it would have to make sales of $500,000 of the costs involved with accidents.

The Riddle
A boy was in an accident and was rushed to
the hospital,
The surgeon said: I cant operate on him, hes
my son.
Yet the surgeon was not the boys father
How can this be?

Solution
The surgeon was the boys mother...
Assumption: Surgeons are men
Lesson: Dont stick with the first solution that
fits. It may limit other solutions to
the
problem.

Safety is NOT the absence

of incidents.
Safety IS the reduction of
risk.

HSE
Policy

Halliburton
Management
System
HSE Risk
Management Guidelines
HSE Standards

1.
Plan

Local Procedures
Process Maps

Halliburton
Management
System Model

6.
Manage
Change
5.
Review

4.
Monitor
Plan

2.
Organize

3.
Implement
Plan

What is a hazard?

A hazard is any existing

or potential condition
which, by itself or by
interacting with other
variables, can result in
death, injuries, damage
to equipment, property,
and the environment.

What is hazard effect?

Hazard effect is the
outcome of the hazard
upon personnel,
equipment, property,
and/or the environment.

Now What?
Identify the Hazard
Recognize the Effect of the Hazard
Recognize the Probability of exposure

Hazard: Meteors
Whats the Effect? Devastating
Then why dont we spend millions building
meteor proof structures to protect our
people and equipment?
What other information is needed to make
a sensible decision or to Assess the
Risk?

Data Collection
Near-Earth Objects (NEO) Assumptions
NOMINAL
Size
Km.
0.25
1.0
2.0

ENERGY
Megatons
102
105
106

FREQUENCY

MORTALITY

Annual
10 -4
5 x 10 -6
10 -6

DAMAGE

Casualties

Dollars

10 5
10 7
3 x 10 9

10 T
1Q
2Q

Intercept System Alternatives

ALTERNATIVE

COST
$

0
1
2
3
4

No Intercept
Panic Mode
Study + Test
Readiness
Build Now

0
Td3
400 M
10 B
T

PROBABILITY OF SUCCESSFUL
INTERCEPT
.25 km. NEO
Ast
Com
0
.8
.8
.99
.99

Legend
M = Million
B = Billion
T = Trillion
Ast = Asteroid
Com = Comet
*Td3 = Trillions of dollars multiplied by the cube of the NEOs diameter
Source: Probability Analysis by G. Friedman based on various studies

0
.4
.4
.9
.9

1 km. NEO
Ast
Com
0
.6
.7
.98
.99

2 km. NEO
Ast
Com

0
.3
.4
.8
.9

Q = Quadrillion

Depending on its size, a near-Earth object hitting the Earth could be devastating (upper). A university risk-management study indicates
that a modest investment could provide a modest-to-high probability of intercepting an asteroid or comet threat (lower).

0
.5
.6
.98
.98

0
.2
.3
.6
.7

To Assess Risk,
You Need to Know:
The Seriousness of the Effect
and
The Probability of Occurrence

Risk
A thing is safe if risks
are judged to be
acceptable

Simple Risk Assessment of Meteor Hazard

Hig
h
Low

High

Low

Very Low

(high - high)

(low - high)

(Very low - high)

(high - low)

(low - low)

(Very low - low)

Hazard Severity Categories

(From Halliburton Standard C1S3)

I.

Catastrophic

II. Critical
III. Marginal
IV. Negligible

What do these words mean?

Can we quantify them?
We can, but first we need
to know if the target of
the effect is a:

I.
II.
III.
IV.

Catastrophic
Critical
Marginal
Negligible

ARD
Z
A
H

Person

Equipment

Environment

Potential Consequences
Hazard
Severity Descriptive
Word
Category

II

III

IV

Catastrophic

Personnel
Illness/injury
Fatality or
Permanent
Disabling Injury
or Illness

Equipment
Loss(s)

Environmental

>$1,000,000

Any incident that potentially harms or

adversely effects the general public and has
the potential for widespread public concern
of Halliburton operations. Can have serious
economic liability on the operation.
Any incident that potentially harms or
adversely effects trained employees and
the environment at our facility. Requires
specialized expertise or resources for
correction.

Critical

Severe Injury
or Illness

$200,000
to
$1,000,000

Marginal

Minor Injury or
Illness

$10,000
to
$200,000

Any incident that presents limited harm

to the environment and requires general
expertise and resources for correction.

Negligible

No Injury
or Illness

<$10,000

Any incident that presents limited harm

to the environment but requires minor
corrective actions (CPI).

Risk Probability Rating

A
B
C
D
E
F

- Frequent contact with the hazard

- Reasonably Probable contact with the hazard
- Occasional contact with the hazard
- Remote chance of contact with the hazard
- Extremely Improbable contact with the hazard
- Impossible to have contact with the hazard

Probability Rating
Likely to occur repeatedly
during activity/operation

Frequent

Reasonably
Probable

Likely to occur several times

Occasional

Likely to occur sometime

Remote

Extremely
Improbable

Impossible

Not likely, but possible

Probability of occurrence
cannot be distinguished
from zero
Impossible to have contact
with the hazard

Risk Analysis Matrix

Potential Consequences
Hazard
Severity Descriptive
Word
Category
I

Personnel
Illness/injury

Fatality or
Permanent
Catastrophic
Disabling Injury
or Illness

Equipment
Loss(s)

Environmental

>$1,000,000

Any incident that potentially harms or

adversely effects the general public and has
the potential for widespread public concern
of Halliburton operations. Can have serious
economic liability on the operation.
Any incident that presents limited harm to
the environment at our facility and requires
specialized expertise or resources for
correction.

II

Critical

Severe Injury
or Illness

$200,000
to
$1,000,000

III

Marginal

Minor Injury
or Illness

$10,000
to
$200,000

Any incident that presents limited harm to

the environment and requires general
expertise and resources for correction.

IV

Negligible

No Injury
or Illness

<$10,000

Any incident that represents limited harm to

the environment but requires minor
corrective actions (CPI).

Probability Rating
A
B
C
Frequent Reasonably Occasional
Probable

D
Remote

E
F
Extremely Impossible
Improbable

1
2
3

Note the numbers 1,2 and 3...These numbers represent the Risk Priority Code

Note the numbers 1,2 and 3...These numbers represent the Risk Priority Code

RPC = Risk Priority Code

CODE ACTION REQUIRED
1
HIGH RISK: Imperative to suppress
risk
to lower level.
2
MEDIUM RISK: Operation may
require
waiver endorsed by
management.
3
LOW RISK: Operation Permissible
NOTE:
Risk priority code of less than 3
is not
acceptable for hazards that
target personnel.

Whats Next?
Reduction of Hazards by using controls.
What are some categories of controls that can
be used to reduce Hazards?

Hazard Control
Elimination
Desirable
Controls

Substitution
Engineering controls
Administrative controls

Less
Desirable
Controls

Personnel protective equipment

A combination of control measures may be required

to reduce the risk to an acceptable level.

Substitution
Water-based chemicals - for solvent-based
Unleaded gas - for leaded gas
Non flammable chemicals - for flammable
chemicals
Non leaded paint - for leaded paint
Water-based coolant - for oil-based coolant
Automatic truck wash- for spray wand

Engineering Controls
Secondary
Containment
Roof over Secondary
Containment
Substitution of
chemicals - use less
hazardous chemicals

Dust Collectors
Scrubbers
Redesign Equipment
Machine guards
Ventilation
Deadman switch

Hazard Controls -

Well Control

Administrative Controls
Safe Work Practices
Rotate Personnel

Segregate chemicals
Use bulk chemicals
Have competent personnel
Follow step-by-step work procedures
Have contingency plans

Associated Problems
Subject to human error
Procedures not followed
Procedures not updated
Plans become obsolete and not updated
Plans and procedures not enforced by
Management

Personal Protective Equipment

Hard hats
Safety glasses
Gloves
Steel-toed boots
Respirators
Hearing protection

Associated Problems
Does not reduce the hazard
Exposes the employee to the hazard (failure
of equipment)
Gives false sense of security
May not be available
May not have adequate selection of
different types, so not used

The most desirable methods for

reducing hazards are:
Eliminate the hazards
Use engineering controls

Risk is related to ignorance...

thus to remove ignorance is
also to remove risk