How Risk Based Decision Making improves Energy Efficiency in Oil and Gas Industry - Implementing Environmental and Resource Management - page 173

15.4 ALARP Principle
The first question to be asked is why use ALARP. The following two objectives of
ALARP Demonstration help answer this question:
1. The hazards associated with a facility can be in large number. Not all the haz-
ards would require a reduction in the risk associated with them as that would
mean an excessive financial burden. Hence to avoid this, the hazards have to be
classified according to the risks associated with them; only those hazards with a
significant level of risk are then targeted. After identifying the risks to be re-
duced, all the measures that could reduce the likelihood of occurrence and/or
severity will become the subject of study. A prerequisite for conducting an
ALARP Demonstration is the identification of potential risk reduction meas-
ures. Figure 15.4 shows the usual order of effectiveness of the risk reduction
strategies (Das 2007).
2. Using different tools for the appraisal of such measures will result in 'Reasona-
bly Practicable' measure of risk reduction. It is possible that sometimes a com-
bination of these strategies is required to achieve the desired risk reduction. A
broader risk management program also ensures that existing controls are being
correctly practiced to ensure acceptable risks remain in the tolerable zone.
Fig. 15.4. Risk Management Strategies for risk reduction (source: Das 2007)
The ALARP principle is based on criteria which segregates the risk into intoler-
able, tolerable and acceptable zones (see Figure 15.3 ). The risks falling in the tol-
erable region are desired to be reduced to As Low As Reasonably Practicable
based on company values. 'Reasonably Practicable' calls for all potential risk
management strategies (inherent, active, passive and procedural) to be identified
to reduce the risks and to weigh the risk reduction benefits against the cost of im-
plementation, including the time and effort needed to achieve the level of risk re-
duction. This can be done by comparing the theoretical financial cost of a potential
incident, calculated in the QRA, with the cost of implementation. Thus the result
is the financial feasibility of risk reduction implementation based on the potential
cost of the hazards associated with the process. The document R2P2, issued by