Guidelines for Process Hazards

Analysis, Hazards Identification &

Risk Analysis
by
Nigel Hyatt

J?, DYADEM
© 2003 by CRC Prcss LLC
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 Guidelines for Process Hazards Analysis, Hazards Identification & Risk Analysis
Nigel Hyatt

Copyright O 2003 by Dyadem Press

-
1'' Edition, 8thPrinting March 2004

ISBN 0849319099

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 About the Author

Nigel Hyatt is recognized as a leading authority on Hazards Analysis, Assessment and

Risk Management. Mr. Hyatt is a professional engineer with more than 35 years of
industrial experience in design, operations and engineering in Petrochemical, Refinery,
Oil Production, Offshore, Chemical, Environmental, Power, Biochemical and Food
industries.

Over a 24-year period, Mr. Hyatt worked in a leadership role for two major engineering
companies, managing and completing projects for significant multinational firms. In
1987, he was Risk Analysis Program Manager for a large tar sands expansion study. He
was responsible for the creation, setup and implementation of risk assessment programs
that dealt with many leading consulting conlpanies as well as being focused towards
meeting the needs of insurance companies.

His experience in the field of risk has been particularly focused on Process Hazards
Analysis and facilitation, hazards identification, quantitative risk assessment and risk
management. In addition, he also specializes in the field of incident investigation.
Moreover, Mr. Hyatt was the originator and key designer of PHA-Pro@, one of the
world's best selling hazard identification software tools.

Mr. Hyatt is used to working with, and being responsible for, multi-disciplinary teams of
people. He regularly gives courses on process safety and is particularly interested in
extending the boundaries and methodologies for hazards evaluation and risk assessment.

Mr. Hyatt is registered as a Professional Engineer in Ontario, is a Chartered Engineer of

the U.K. and is also a Member of the Institution of Chemical Engineers. He has 3
children and resides with his wife in Richmond Hill, Ontario.

), DYADEM
© 2003 by CRC Prcss LLC
Table of Contents
Introduction

CHAPTER I
Risk Concepts
Hazardous Event
What is Risk?
Typical Incidents that Concern Us
Industrial lncidents of Major Significance

CHAPTER 2
Regulatory Developments
North America
Bodies and Regulatory Developments in North America
Individual States Legislation in the USA
Occupational Safety and Health Administration (OSHA),
Process Management of Highly Hazardous Regulations -
29 CFR 1910.119
Environmental Protection Agency (EPA), Risk
Management Plan (RMP) Rule - 40 CFR Part 68
United Kingdom
European Commission (EC)

CHAPTER 3
Risk Terminology

© 2003 by CRC Prcss LLC

 CHAPTER 4
Process Hazards & Risk Management Alternatives
Hazards that Concern us
What Increases the Potential for Industrial Facilities to Become
More Hazardous?
What Makes Transportation of Dangerous Goods More
Hazardous?
How are Process Risks Analyzed?
Principle and Practice of Risk Analysis via Quantitative Risk
Assessment
Risk versus Safety: a Comparative View
Risk Management Alternatives for New (Proposed) & Existing
Hazardous Facilities

CHAPTER 5
Identification of Hazards and Structured Hazards Analysis Tools
How do we identify Hazards?
Widely Used Methodologies to Identify Hazards
Preliminary Hazards Analysis (PrHA)
Hazards And Operability Analysis (HAZOP)
Failure Mode and Effects Analysis (FMEA)
What If Analysis
Checklist Analysis
Use of Risk Matrix With Hazards Identification
Example: Liquefied Petroleum Gas (LPG) Rail Car Loading
Terminal

CHAPTER 6
Basics of HAZOP
What Did we Do Before HAZOP Came Along?
How Do We Know If a Plant Is Safe?
HAZOP Methodology
Methodology for Generating Deviations
What Type of HAZOP Should You Use?

© 2003 by CRC Prcss LLC

 Steps in the HAZOP Process
Variations in HAZOP Types
Preparation of HAZOP Reports
HAZOP Example

CHAPTER 7
Pitfalls with HAZOP, Optimization of PHAs & Sizing of Nodes
Pitfalls with HAZOP
Optimization: When to Do What
Choosing & Sizing of Nodes for HAZOP

CHAPTER 8
What IflChecklist
What If
Checklist
What If Example

CHAPTER 9
Failure Mode and Effects Analysis
What Is FMEA?
Reasons for Using FMEA
When and Where to Use It?
Regulatory Compliance
Different Types of FMEAs
Methodology
Risk Analysis (prioritizing risks)
FMEA Worksheet Format
FMECA
Benefits of FMEA and FMECA
Pitfalls with FMEA and FMECA
FMEA Terminology
Sample of FMEA Report Using Software

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© 2003 by CRC Prcss LLC
 CHAPTER 10
Screening Level Risk Analysis (SLRA)
Basis
Purpose
When to Use SLRA
SLRA Methodology
Results
Example of SLRA Worksheet

CHAPTER 11
PHA Revalidation
Overview
Objectives of PHA Revalidation
Considerations of PHA Revalidation
Determination of the Scope of PHA Revalidation Study - 6-Step
Approach
PHA Revalidation Checklist of Suggested Items

CHAPTER 12
Management of Change (MOC)
Introduction
Changes Justifying PHAs
MOCs Implementation

CHAPTER 13
Estimation of Time Needed for PHAs
How to estimate the time

CHAPTER 14
Management of Hazards Associated with Location of Process Plant
Buildings
Overview
Major Concerns

© 2003 by CRC Prcss LLC

 API 752 - Management of Hazards Associated with Location of
Process Plant Buildings
Considerations in Hazards Identification
Analysis Process for an Explosion
Analysis Process for a Fire
Analysis Process for a Toxic Release
API 752 Building Checklist
Facility Siting Checklists

CHAPTER 15
PHA Protocols and Administrative and Engineering Controls
PHA Protocols
Administrative and Engineering Controls
Administrative and Engineering Controls as Safeguards
Consequences of Failures of Administrative and Engineering
Controls

CHAPTER 16
Human Factors
Introduction
Human Factors in Relation to PHAs

CHAPTER 17
Loss of Containment
Examples of Loss of Containment
Loss of Containment Calculations
Nomenclature

© 2003 by CRC Prcss LLC

 CHAPTER 18
Managing and Justifying Recommendations
The Dilemma for Management
How to Proceed with Presenting Specific Recommendations to
Management
Correct Descriptions of Recommendations
The Role of Risk Matrices in Indicating Viability of
Recommendations
Validity of Risk Matrices
Use of Financial Risk Matrix
Justification of New Risk Measures

CHAPTER 19
PHA Team Leadership
Objectives of PHA
Opposition of PHAs
Driving Forces Behind PSM
Role of PHA Leader (Facilitator)
PHA Team
Choice of PHA & Factors in Determining Choice
Manage the Time Spent on PHAs
Preparation Before PHA Sessions
PHA Leadership: Responsibility
Analyze Your Performance
Steps for Performance PHA
Main Goal of the PHA: Recommendations & Remedial Actions
Auditing of PHAs

CHAPTER 20
Safety Integrity Levels
Standards
Safety Life Cycle
SIL Assignment Methodologies

© 2003 by CRC Prcss LLC

 New and Existing Systems
SIL Verification
Important Aspects of SIL Application

CHAPTER 21
Layer of Protection Analysis
Introduction
Scenario Development
Consequences and Severity Estimation
Initiating Events and Frequency Estimation
Independent Protection Layers
Applications of LOPA

CHAPTER 22
Quantitative Risk Assessment
Assessing and Managing Risk
Risk Analysis
Calculation of Total Risk
Risk Measurement
Risk Estimation & Acceptability Criteria
Comparative Risk
Uncertainty in Risk Estimation
Risk Assessment Results and Land Use Planning
Risk Acceptability Criteria
Comparative Common Risks
Risk Control (Risk Mitigation)
Relationship between Events (incidents) and Effects (impacts)
True Risk versus Potential Risk
Fault Tree Analysis
Failure Rate Estimation and Reliability Data
Introduction to Consequence Analysis
Consequence Mechanisms

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© 2003 by CRC Prcss LLC
 Fire & Explosion Effects
Explosion Modeling Methods
Consequence Analysis Calculations
Specific Release Scenarios
Use of Consequence Analysis

Appendix I
Deriving Deviations from First Principles
Introduction
Critique of Current Methods of Structured Hazards Analysis
Component Functional Analysis
Component Functionality: a Pivotal Benchmark for establishing
Failure Modes and Deviations
Use and Advantages of Component Functional Analysis over
other methods of Structured Hazards Analysis
Determination of HAZOP Deviations for Parameters and
Operations

Appendix II
Different Types of HAZOP
A. Parametric Deviation Based HAZOP
B. "Creative Identification of Deviations & Disturbances"
Methodology for Performing HAZOPs
C. Procedural HAZOP
D. Knowledge Based HAZOP

References
Regulations and Recommended Practices
Books and Publications
Index

3 DYADEM
© 2003 by CRC Prcss LLC
Introduction

Introduction
Guidelines for Process Hazards Analysis, Hazards IdentiJication & Risk Analysis is a major
update to Dyadem's very popular Process Hazards Analysis Training Manual. It comes at a time
when there is ever increasing awareness of hazardous risks that need to be managed by the
industrial community at large.

The guidelines are driven principally by the need to provide practical guidance to both the novice
and the seasoned risk professional. The guidelines are also considered to be a usehl adjunct to
Dyadem's very widely used PHA-Pro@ software, Internet reference www.dyadem.com.

Chapters 1 to 4 address Risk Concepts, Regulatory Developments, Risk Terminology and

Process Hazards & Risk Management Alternatives. The purpose here is to familiarize the reader
with the technical definition of risk, past industrial incidents and their impacts, the legislation for
which these incidents have acted as catalysts, the language and terms used in the risk field, types
of hazards and simple management strategies.

Chapters 5 to 10 address the different types of structured analytical techniques for conducting
Process Hazards Analyses, such as HAZOP, "What if," Checklist, FMEA and so forth. The
purpose here is to familiarize readers with the different methods so they understand that different
techniques can be used with different applications and for different situations. The user should
understand that an older facility, whose drawings are unobtainable or illegible, places different
demands on a PHA team than say a new facility, where h l l y detailed and extensive CAD
drawings are available, or a facility that is merely at a conceptual phase only without any
drawings. Different situations demand different tools, and this is certainly true in the application
of Process Hazards Analysis tools.

Chapters 11 and 12 deal with the subjects of revalidating PHAs and handling Management of
Change (MOC) issues, where PHAs may, or may not, be required. With revalidation, it is now
understood that there are many issues and concerns with the quality and validity of early PHAs.
In addition, new legislation and increasingly stringent demands have to be met to bring these

© 2003 by CRC Prcss LLC

3 DYADEM
 Introduction

early efforts to an acceptable standard in very many cases. With MOC, companies are
continuously updating and modifying their facilities, and the criteria demanding whether or not
these changes require PHAs are proposed.

Chapter 13 provides a rapid, order-of-magnitude method of estimating the time required for
PHAs. There may, of course, be considerable variance, depending on the experience of the PHA
team and the level of detail considered necessary.

Chapter 14 provides guidance in relation to the Management of Hazards associated with the
Location of Process Plant Buildings, as well as addressing facility siting issues. When assessing
hazards and their impacts on plant personnel and equipment, the overall philosophy of plant
layout has changed considerably. It was once considered to be good practice to have equipment
located as close as possible, with minimum spacing to minimize pipe runs, etc. and thus
minimize plant costs. Incidents, such as Flixborough, 1974, where the control center was located
in the heart of the plant and where there were 100% fatalities, have largely changed this
approach in favor of safer layouts.

Chapter 15 provides certain important protocols for conducting PHAs and for guidance on
safeguarding, especially with respect to Administrative and Engineering Controls, as well as
addressing the consequences of failures of such controls.

Chapter 16 addresses human factors. The importance here is not to believe that human error can
be totally eliminated, but rather to analyze for factors that can exacerbate and increase the
chances of error. Once known, these factors can be addressed in order to minimize the potential
for human error.

Chapter 17 deals with Loss of Containment. The different factors to be considered are dealt with
qualitatively. Examples of common hazards, e.g., the storage of anhydrous liquid ammonia,
LPG, where loss of containment might occur, are presented.

Chapter 18 deals with Managing and Justifying Recommendations that result from PHAs. Since
the driving force for risk mitigation and deciding which recommendations should receive priority

© 2003 by CRC Prcss LLC

9DYADEM
Introduction

is somewhat arbitrary, a rationale for applying financial pay-back, based on rate of return applied
to the risk, is presented. Different forms of risk matrices are also presented, and their relative
merits are discussed.

Chapter 19 looks at PHA Team Leadership issues. It gives direction on the role of the PHA
Leader (Facilitator) as well as preparation, setting up, responsibilities, organization and
documentation of PHAs. Frequently, the PHA Team-Leader-to-be is thrust into the role where he
or she responds "Yes, but what am I supposed to do now?" The object of this chapter is to help
such individuals cope and manage what they may regard as an intractable situation.

Chapter 20 provides an overview of the application of Safety Integrity Levels (SILs) in the
process industry and the relevant standards ANSIIISA S84.01 and IEC 6151 1 developed by the
American National Standards Institute 1 Instrument Society of America, and the International
Electrotechnial Commission, respectively.

Chapter 21 provides an overview of Layer of Protection Analysis (LOPA). An example is used

to illustrate the concept of building scenarios in LOPA. This is associated with guidance on
constructing and assigning numerical values to individual scenario components, i.e.,
Consequence, Initiating Event, Enabling Event and Condition, Condition Modifier and
Independent Protection Layer. It also provides recommendations on the expertise required to
conduct LOPA and a template for documenting LOPA.

Chapter 22 addresses some of the basics of Quantitative Risk Assessment (QRA). It is desirable
to understand how hazards, once identified, can be quantified in terms of risk from the
consequences, i.e., impacts, as well as determining their frequency of occurrence, as likelihood.
Although QRA is considered to belong to a more complex form of risk analysis than PHAs, it is
felt that an understanding of the basics of QRA are very important for the risk professional.

Appendix I presents a basic methodology for Deriving Deviations from First Principles. The
corollary to this appendix is that it allows the user to apply HAZOP to various types of systems
or equipment, such as Compressors, Pumps, etc., where it is currently considered to be
ineffectual.

© 2003 by CRC Prcss LLC

9DYADEM
 Introduction

Appendix 11 presents information on the different forms of HAZOP technique currently being
used. Although the Parametric Deviation based method is the most widely used, it is not, for
example, necessarily the best method for analyzing batch processes. The alternatives, together
with their relative merits and an example of Procedural HAZOP, are presented.

© 2003 by CRC Prcss LLC

Introduction

Acknowledgements

I would like to acknowledge the assistance of Dyadem Engineering Corporation (DEC)

personnel in the preparation of these guidelines.

In addition, feedback from members of Dyadem International Ltd. (DIL) as well as DEC and
DIL clientele, typically through PHA-Pro@ software use, PHA Training, PHA Facilitation and
QRA Projects, and from advisers that DEC has used from time-to-time, have all proven
informative.

Nigel Hyatt
Richmond Hill, Ontario
May 2002

Update: To assist the users of this manual, an index has been added. In addition, to accommodate
the duel needs of both SI units and English FPS units, clarification has been provided in Chapter
17 to enable both systems to be used.

March 2004

© 2003 by CRC Prcss LLC

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