ABS Consulting

Need is real for risk assessments of energy infrastructure

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Courtesy of ABS Consulting

Damage to fixed and floating structures, pipelines, onshore terminals and refineries during the past few hurricane seasons has reinforced the need to develop accurate risk assessments not only to determine overall risks for particular operators but also to identify the components of that risk so that appropriate mitigations can be undertaken. Losses from hurricane damage are not limited to physical damage; the many interconnections between assets in the product chain mean that production losses can impact even those operators that experience little or no physical damage. The 2004 and 2005 hurricane seasons cost the industry approximately $10 billion. These losses should be viewed within the context of the potential for future losses in the short term. The oscillations of the Atlantic Ocean temperatures (which can span decades) coincide with oscillations in the frequency of powerful hurricanes. In the decades of warmer ocean temperatures, the occurrence of Category 3 and higher storms is twice as likely as during periods of cooler emperatures. The current period of armer temperatures means that damaging storms are more likely to occur now and for a number of hurricane seasons to come. Therefore, understanding the hurricane risk associated with oil and gas production operations in the Gulf of Mexico is of even greater importance. Physical damage to offshore assets is generally well understood. The industry has been operating in the Gulf of Mexico for more than 50 years, and there is a wealth of practical experience as well as scientific research to support the way structures are designed and to understand how they’ll respond to extreme events. This long history can also be used to help predict the response of facilities based on their age and other available data.

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