How Risk Based Decision Making improves Energy Efficiency in Oil and Gas Industry - Implementing Environmental and Resource Management - page 171

The current oil consumption is at the rate of 0.18 ZJ (1x10 21 J) per year and the
USGS World Energy Assessment Team gave the forecast of global fossil fuel re-
serves in 2005 shown in table 15.1 (OPEC 2005).

Table 15.1. Fossil Fuel Reserves 2005 (source: OPEC 2005 Annual Statistical Bulletin)

Fuel Energy Reserves in ZJ

Coal 290.0

Oil 18.4

Gas 15.7

These statistical data are based on:
1. Present technological capabilities of Oil and Gas exploration and forecasting
2. Present technological capabilities of Oil and Gas extraction, refining and trans-
portation
3. Usage pattern forecasts
If the technological improvements in research and production are taken into con-
sideration, along with a significant increase in efficient renewable energy sources,
thus reducing the rate of depletion of fossil fuels, oil and gas reserves are expected
to be sufficient for more than a century. This surely calls for more focus on the
safety, environmental and energy efficiency issues commonly attributed to oil and
gas projects and in fact significant financial investment is made to identify and
manage such issues over the lifetime of processing and production facilities.

15.3 Risk Based Decision-Making Process

Figure 15.2 shows a graphical representation of the RBDM process. The first step
is to qualitatively identify hazards in a hazard identification workshop. These
qualitatively derived hazards are used to develop the hazard scenarios for the
Quantitative Risk Analysis (QRA). There are many accepted methods for quanti-
fying risk but in general the QRA determines, based on the physical, spatial and
temporal effects of the potential incidents, the probability of negative effects. The
effects which are considered are those which may impact: people, assets, envi-
ronment as well as company reputation (OGP IPIECA 2006). The outcome of this
analysis is the risk associated with each hazard expressed in terms of the relative
potential magnitude of the impact multiplied by the probability of occurrence
(OGP IPIECA 2006). These values are then reported in terms of risk to individuals
and risk to society.
Individual risk criteria and societal risk criteria ( Figure 15.3 ) give the measure
of risk perception of society; these can be monetised by applying cost benefit
analysis methods to give a value to each effected component. For example if an
incident has a potential to cause environmental damage, then the cost of clean-up
could be calculated to provide a comparison point. Again the calculated value of
each component is then summed to provide a theoretical monetary cost of the in-