RISK

Risk Management In The Oil And Gas Industry

Over the past decade, the oil and gas industry has grown rapidly. Accompanying that rapid expansion has been a sharp increase in the number of on-the-job deaths and injuries. While these occupations are dangerous by nature, many blame the high fatality rate on lax safety regulations set forth by the Occupational Safety and Health Administration (OSHA).

While the regulations put in place by OSHA have done wonders for the health and safety of workers in other dangerous industries, such as construction, they fail to address many of the health and safety hazards specific to workers in the oil and gas extraction industry. Though the oil and gas industry are considered a part of the mining industry, and experience similar fatality rates, they aren’t subject to the stringent regulations and frequent inspections that are required by the Mine Safety and Health Administration (MSHA). According to MSHA, underground mines are subject to mandatory inspections four times a year. These are in addition to any inspections conducted in response to complaints or fatalities. OSHA has no mandatory inspections, and because worksites in the industry are often mobile and remote, many sites go unchecked. In the fiscal year of 2014, OSHA completed a mere 663 inspections in the oil and gas extraction industries.

Between 2003 and 2010, the U.S. oil and gas extraction industry had a fatality rate that was seven times higher than all other industries, and the numbers continue to increase. In 2012, the death rates of oil and gas workers hit an all- time high of 142 deaths in a single year. While the death rate dropped slightly in 2013, the Bureau of Labor Statistics reported 181 oil and gas extraction workers died on the job in 2014, 17% more than the year before.

Based on a yearly report released by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) titled “Death on the Job: The Toll of Neglect”, stated “The escalating fatalities and injuries in the oil and gas extraction industry demand intensive and comprehensive intervention.” It also stated, “Without action, the workplace fatality crisis in this industry will only get worse as production intensifies and expands.”

While federal agencies are continuing their efforts to address the health and safety issues that plague the rapidly expanding oil and gas extraction industry, there are still many improvements to be made. The first approach to safety is implementing a risk management system for their workers. When it comes to creating a successful risk management system, there are seven key steps. The first is planning. Identify the people who are taking part in the risk management process and gather information on health and safety as it relates to the gas and oil industry. Then, define strategies and workflows that stay in line with the company’s business and legal requirements.

The next step is to identify the possible safety and health hazards in the workplace through area inspections and by reviewing previous accident and illness records. The most common cause of death in the oil and gas extraction industry is trauma, typically occurring when workers are struck by tools or equipment. Between 2013 and 2014 OSHA investigated 44 fatalities and 20 were trauma related. Other risks to worker safety include motor vehicle accidents, falls, and explosions or fires from the presence of highly combustible hydrocarbons. In addition to that, reports from the National Institute of Occupational Safety and Health (NIOSH), as well as investigations conducted by OSHA, found that many worker deaths were written off as cardiac arrhythmia or respiratory failure, but were actually caused by exposure to chemicals.

The third step to creating a successful risk management system is the risk assessment. Evaluate the risks arising from each identified hazard, the existing precautionary measures in place to prevent them, and how they failed. Then, rank the risks based on severity. The next step is to record the findings of the risk assessment in order to define control measures, conduct internal review audits, and for regulatory purposes.

The death rate dropped slightly in 2013, the Bureau of Labor Statistics reported 181 oil and gas extraction workers died on the job in 2014, 17% more than the year before.

Step five is risk control, by defining and implementing preventative measures to eliminate or minimize the risk of an accident. Step six is having a follow-up assessment ensuring that the control measures implemented are being used and are effective.

The final step is to monitor and review the risk management system that has been put in place, updating the risk assessment regularly. A successful risk management system should increase the safety of workers and encourage them to follow consistent health and safety practices. With enough diligence, the oil and gas extraction industry could continue to grow at its current pace without compromising worker safety.

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