Management of Change

1. Management of Change Melissa Heike, M.S. “Working Safe, Preventing Injuries, Increasing Profits” RJR Safety Inc.

2. Overview • What is Management of Change (MOC) • Why do we need MOC • Recognizing Change • The MOC Program • Main Elements • Operation • Keys to Success

3. Management of Change • Policies and procedures which ensure that changes do not result in operations outside of established safety parameters • Essential element in an organization’s process safety system • Managing change can mean managing potential incidents

4. Focus of MOC • To prevent catastrophic accidents and to properly evaluate the concerns of safety and health and to accomplish this review in a timely manner.

5. History of MOC • Early 60s - Formal procedures first introduced in the nuclear power and defense industries. • 1976 - First mention of use within chemical industry at Loss Prevention Symposium • 1985 - CCPA pamphlet, “Essential Components of Safety Assessment Systems • 1990 - API recommended practice “Management of Process Hazards” • 1992 - OSHA 1910.119, “Process Safety Management of Highly Hazardous Chemicals”

6. MOC and PSM • Process Safety Management is a method of identifying, understanding, and controlling process hazards and preventing process-related injuries and accidents • MOC is one of the PSM elements • MOC is different from the other elements • MOC is never complete - must be performed on a continual basis throughout the life of the process.

7. 80% of all large scale accidents in the process industries trace their origins back to “Change”. Change is essential to a company’s survival they have to be able to continuously improve their process and keep up with industry standards. Why do we need MOC? VS.

8. Case Study: Flixborough, 1974 • Vapor cloud explosion - fueled by release of 30 tons of cyclohexane • Largest single loss by fire or explosion in the United Kingdom • killed 28 people • injured 89 others • $63 million in property damage

10. The Flixborough explosion… was the result of an unwise plant maintenance modification. In Hindsight ... • A proper MOC procedure could have prevented this accident. • One of Main recommendations from inquiry • Any modification should be designed, constructed, tested, and maintained to the same standards as the original plant.

11. Does the Oil & Gas Industry ever need to Manage Change?

12. BP Refinery in Texas City, 2005

13. BP Refinery in Texas City- Findings • There were a number of misapplications of the refinery MOC policy for changes pertaining to the blowdown drum, the splitter tower, and occupied trailers. Chemical Safety Board - BP Texas City Final Investigation Report 3/20/2007 pg. 138

14. BP Refinery in Texas City- Findings • Organizational changes that could adversely impact process safety, such as changes in the management structure, budget cuts, etc., generally were not evaluated. Chemical Safety Board - BP Texas City Final Investigation Report 3/20/2007 pg. 139

15. Macondo Blowout and Explosion, 2010

16. Lessons not learned…. “Despite some significant progress with process safety indicator implementation in the downstream oil industry… in the offshore sector -BP, Transocean, industry associations, and the regulator had not effectively learned critical lessons of Texas City and other serious process incidents at the time of the Macondo blowout.” Chemical Safety Board findings 7/24/12

17. Lessons not learned… “Systems for managing the safety of process changes were inadequate.  The plan to complete and “temporarily abandon” the Macondo drilling operation was changed five times during the week before the disaster, but there is no available documentation that management of change procedures or formal hazard assessments were conducted.” Chemical Safety Board findings 7/24/12

18. What is Change? • Most difficult part of Management of Change is recognizing change. • Need to be able to distinguish between a change that requires approval using the MOC procedure and one that does not.

19. Recognizing Change 5-10 potentially high risk 50-100 MOC 1000 Work Orders

20. Replacements-in-kind • Defined - a replacement that satisfies the design specifications. • Examples • raising reactor temperature within safe operating envelope • replacing equipment or piping meeting the same specifications as the original

21. Change • Change is an alteration or adjustment to any component, variable or property within an existing system (except those within clearly defined boundaries or responsibilities). • Examples • changes that alter production rates • changes involving safety relief or vent systems • deteriorating materials

22. Main Types of Changes • Change of Process Technology • Change of Facility • Organizational Change • Variance Procedures

23. Permanent vs. Temporary • MOC should be conducted on both permanent and temporary changes.

24. Key Elements of a Program • Identification System • Change Control Mechanism • Training • Information Management System • Auditing The requirements for each element should be detailed in a company’s MOC policy.

25. Identification System • Screening process for identifying changes. • Includes risk ranking process based on effect item could have on safety of process • Requires clear, written, definition of system boundaries and what constitutes “change”

26. Change Control Mechanism • Explains how to manage the change. • Must clearly identify: • the work flow procedures (MOC form) • responsibility and authority • approval level

27. Training • Anyone who could affect a change must be properly trained in the Management of Change system • Commitment from all levels of management and staff

28. Information Management System • “Status Accounting” • Software/documentation that tracks all changes and their progress • Allows access to most current information • ie. If two changes are inter-related they will be aware of one another

29. Auditing • Ensures system is working as it should • MOC system should be constantly evolving and improving in efficiency and effectiveness • Verifies changes are assessed accurately • More often while the system is new to ensure all the “bugs” are found

30. Operating the MOC system • A MOC system is very dependent on the specific company • no two systems will be the same • ie. one company could require 1 signature for approval while another could require 5. • They are all based on the same fundamental principles

31. MOC Form • A MOC form is used by many companies to guide employees through the procedure • The MOC form should include: • Description, purpose, and technical basis for the change • Assigned level of risk • Safety, Environmental, and Health impacts • Necessary time period for the change • Authorization for the proposed change

32. Ranking changes • Must delineate changes • small • medium • large • Don’t manage all changes with same rigor • Hazard analysis method and level of approval dependent on type of change.

33. Determine Hazard Level • Examples of yes/no questions to determine the hazard level: • Does the change introduce a significant source of energy (chemical, mechanical, thermal, electrical)? • Does the change result in any increase of toxic, flammable, or reactive material? • Does the change significantly increase the potential for personnel exposure to a hazardous material?

34. Determine Potential Severity • Examples of yes/no questions used to determine potential severity level: • Could the change take the process outside the safe operating envelope? • Does the change significantly alter the heat and material balance? • Does the change introduce new molecules?

35. Risk Matrix Severity of Change Low High Degree of Low Risk Level 1 Risk Level 2 HazardHigh Risk Level 3 Risk Level 4 Risk Level Type of Safety Review Authorization 1 Simple Checklist Shift Supervisor 2 What-if Checklist Unit Supervisor 3 FMEA or HAZOP analysis Area Supervisor 4 HAZOP with consequence analysis Plant manager

36. A successful MOC program is dependent on ... • Management Support • Implementation not just documentation • Understanding and utilization of developed procedures • Training • Essential to keep stakeholders informed throughout the MOC process.

37. Simplicity • A modest MOC system that is regularly used and works is much better than an elaborate, sophisticated system with an impeccable paper trail that is occasionally winked at, bypassed, or sometimes totally ignored.

38. Conclusions ! • Unmanaged process and organizational modifications have been a major cause of accidents. • A formal method to deal with change will help prevent future accidents from occurring. • Change is unavoidable in our industry • all organizations should have a MOC program.

39. Questions or Comments?Thank you Melissa Heike, M.S. “Working Safe, Preventing Injuries, Increasing Profits” RJR Safety Inc