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Can digital technology help oil and gas bounce back after three major safety incidents?

As the oil and gas sector reflects on three serious process safety events (PSE), we spoke to Stuart Gregg, Oil and Gas Innovation Director at Axora about the potential for stricter regulatory scrutiny and how digital technologies can make equipment safer.

29 April 2021


contact-Matthew Blenkarn

Matthew Blenkarn

Content Producer

The oil and gas sector had already faced two large scale process safety events (PSE) before the first quarter of 2021 even began. On 5 December 2020, a storage tank at a Magellan petroleum facility in Texas caught fire and exploded, injuring seven. Days later, National Petroleum’s Sea Lots compound in Trinidad faced a similar event when a storage tank explosion injured three contractors. And 2021 hasn’t been much better so far: on 29 March, another explosion at the Balongan refinery in Indonesia left five in serious condition.

In all of these cases, the origins of the blasts were traced back to hydrocarbon inventory in the form of storage tanks. Each PSE resulted in evacuations and multiple serious injuries, not to mention the costly damage and operational disruption caused.

For Axora Energy Innovation Director Stuart Gregg, this series of events underline one thing: the sector must do more to prevent PSE and protect operations.

“Three large storage tank PSEs taking place in such quick succession tells me that there is a trend emerging, and it tells me there is a gap,” he says.

“What these recent events clearly highlight is that in spite of safety progress over the years, the industry has major gaps in terms of strategy, training and competence. Having grabbed global headlines, these three events must now be analysed by oil and gas organisations around the world to help ensure that this streak does not continue.”

New regulations will be enforced by national governing bodies around the world, and organisations lagging behind will have to strive to up their game.

Is new legislation on the horizon?

Legislation may help make that happen. New laws have played a central role in filling gaps in safety procedures in previous years, encouraging organisations to adopt stronger safety measures. Gregg says that full investigations into the root causes of the three incidents are expected to take place, the findings of which, along with industry learnings, will likely inform new procedures.

“New regulations will be enforced by national governing bodies around the world, and organisations lagging behind will have to strive to up their game,” he says.

There’s no doubt safety in the industry has improved dramatically, but in light of recent events, they may become integral to compliance in the future.

While the PSE in Texas, Trinidad and Indonesia have attracted attention in recent months, other 21st-century incidents have also focused the industry’s attention on human error and oversight. The Buncefield incident of 2005 is a prime example; the Hertfordshire Oil Storage Terminal suffered a massive blast, which the BBC has described as the “largest explosion ever in Europe during peacetime.”

Investigators traced the cause of the event back to a valve opening where a simple piece of analogue levelling equipment failed. Today, organisations have to prove that the associated equipment is operational and efficient. Energy companies have made gradual progress in digitising that equipment, but Gregg notes that they may need to go further, especially in the wake of potential legislative changes.

“There’s no doubt safety in the industry has improved dramatically,” Gregg says. “But in light of recent events, they may become integral to compliance in the future.”

The future of safety is digital

As the energy industry faces greater pressure from both legislators and regulators, digital transformation may offer a path forward. Gregg observes that a loss of primary containment (LOPC) is usually the result of either human error or equipment failure. Internal erosion or external corrosion are usually responsible for the latter outcome, so companies have turned to technologies like ultrasonic sensors to prevent, monitor and address wear.

Others have taken different approaches to prevent LOPC. Some leverage data to detect potential pipework failures and generate early warning alerts, enabling them to carry out vital predictive maintenance. Many organisations have also improved the surface coating used for primary pipework to limit corrosion, as well as evaluating insulation that can result in premature wear.

These LOPC prevention techniques have shown significant promise over the past decade and a half, Gregg says. An OGUK report shows that in 2004, the oil and gas sector suffered more than 250 hydrocarbon releases. Such releases have declined significantly through 2019, when fewer than 100 releases occurred and only three were classified as major. Still, Gregg adds, one LOPC is one too many.

“While this is a sign of extensive progress, the industry must work to drive these figures down as far as possible,” he says.

By inserting effective digital technologies at the right stages [...] the probability of major incidents can be reduced significantly.

Of course, companies can’t just turn to digital solutions to prevent equipment failure. Human error remains a threat that’s impossible to eliminate. But Gregg points out that with the right technology deployed throughout production, companies can prevent human mistakes from becoming catalysts for a crisis.

“I’ve been involved in the investigation of a lot of serious incidents, including those with fatalities. I can honestly say that every case has involved human error,” he says. “By inserting effective digital technologies at the right stages in these processes, with the right installation, testing and monitoring, the probability of major incidents can be reduced significantly.”

The obstacles to digital transformation

Even with the potential of digital technology, significant safety challenges lie ahead for the sector. Many organisations are now operating with equipment that has reached the end of its design life, which Gregg compares to a car running with over 200,000 miles on its odometer. Companies must maintain their ageing equipment at a much higher standard while also complying with relevant regulatory rules. These factors put organisations in a tricky situation, as they must balance risk and cost.

Digital transformation is still the best way out of that bind, but companies can still be slow to adopt it. Trust is part of the problem; when failure can result in a major safety incident, Gregg says, it can be difficult to have faith in technology alone.

Digital technology has a huge part to play in the future of the industry, but it must be fit for purpose, highly reliable, and proven under real conditions.

“Many operators are still very nervous about installing a digital transducer or sensor, walking away, and relying on it to tell them when a piece of equipment or pipework is going to fail,” he says.

Because of this widespread reticence toward technology, it’s becoming more common for companies to refrain from fully embracing the advantages of digital. As a result, operators have implemented solutions to cut costs and increase efficiency, but end-to-end autonomous systems have yet to operate on a large scale. In order to truly make an impact on PSE, organisations and digital solution providers alike must do more to develop and deploy the technology of tomorrow, Gregg says.

“Digital technology has a huge part to play in the future of the industry, but it must be fit for purpose, highly reliable, and proven under real conditions. If recent events teach organisations in the industry anything, it’s that they can’t afford to let their guard down.”

This article is a part of our Innovation Leaders in safety series. To view the report and further interviews and insights into safety solutions, visit our Innovation Leaders page here.  

29 April 2021

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