Baker & O'Brien Releases Second Quarter 2017 Edition of Energy Expert: Issues in Focus
August 9, 2017
This quarter’s Energy Expert newsletter profiles several of Baker & O’Brien’s recent engagements that we hope you will find interesting and thought provoking:
- In the lead article, Bill Jackson explains how first appearances can be deceptive when investigating the root cause of an incident. A root cause analysis (RCA) can identify hidden underlying faults that, when corrected, will prevent reoccurrences. The article reviews an example where an RCA of a fire and explosion was able to identify hidden deficiencies in the plant’s control systems, in which modifications had not been properly integrated.
- Next, Dave Morgan discusses how plant modifications and upgrades, if not properly engineered, can compromise the safety of a plant. This can be especially true when there is a change of ownership that may affect legacy knowledge of original plant design and process information. To ensure the mechanical integrity and safe operation of a facility, changes at a refinery need to be reviewed methodically to ascertain their effect on the existing equipment, such as metallurgy and safety systems. Utilization of process safety management (PSM) principles is essential to properly evaluate changes in operating conditions. Failure to do so can lead to a catastrophic loss like the one we investigated at a refinery in North America.
- Finally, Peter Halliday describes how the value of residual fuel oil left for an extended period in storage tanks can be difficult to assess. This was a key cost component of a power plant decommissioning contract. When the plant was demolished, a contractor was hired to decommission the obsolete fuel oil tanks and dispose of the residual fuel oil left in the tank bottoms. The valuation of this residual fuel oil, which was for the contractor's account, was not as straightforward as anticipated.
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