Risk management is an important activity in any business, be it Chemical Process sector such offshore Oil & Gas, onshore processing, petrochemicals, refineries, pharmaceuticals or Nuclear, Aerospace, Transport or Finance sector. Risk management involves several phases starting from identification of risks, then evaluation of risks, controlling and continuous monitoring risks. Various tools are adopted in each of these phases.

Chemical process facilities involve storage and processing of hazardous chemicals, that if released to atmosphere, can have adverse impact on people, assets, environment and thereby affect the reputation of a company.

Quantitative Risk Assessment is a well-known technique for evaluating risks. It involves the following steps:

• Identification of hazards
• Determining loss of containment scenarios
• Determining escalation scenarios
• Determining the consequences for each scenario
• Determining the likelihood of each scenario
• Determining the risk of each scenario to people, assets and environment
• Integrating the risks
• Benchmarking risks against tolerability criteria
• Reducing risks to as low as reasonably practicable (ALARP)

The above-mentioned steps are key to any risk evaluation technique. Various software products provide assistance to competent risk analysts in completing some of these steps systematically and efficiently. However, communicating risks to appropriate level of organization and ensuring that these risks are well controlled is a critical step that requires strong experience in risk management.

Bell Energy not only performs risk evaluation but also advises companies on the management of risks.

Quantitative Risk Assessment have several benefits and should be used as an active tool in decision making. The list below presents some of the main applications of a quantitative risk assessment.

• Supports risk based decision making
• Planning for emergency management
• Predicting losses and environmental impacts
• Evaluating specific engineering controls for risk reduction
• Evaluating operational requirements
• Planning for maintenance and inspections
• Insurance and re-insurance purposes

Quantitative risk assessment, by its nature, introduces challenges of being misunderstood and misused. Some pitfalls of such techniques are listed below:

• False sense of accuracy – QRA provides quantitative sense to risks, but these numbers do not mean anything and should be used only for the purpose of risk comparison and benchmarking.
• False sense of assurance – QRA alone does not manage risk. Similarly, QRA do not conclude that a facility is safe.
• Ignoring uncertainties – QRA uses statistical data and some of the mathematical models adopted in various software are empirical.
• Ignoring the factor of time – QRA is a dynamic tool and risks often increase as time goes by, due to plant ageing

One of the major pitfalls experienced in the growing QRA industry is the over reliance on QRA for risk management, which leads to companies spending disproportionate time and effort in risk evaluation. It is important to note that time should be spent on controlling and monitoring risks.