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Speech

April 2, 2012

The Intersection of Process Safety and Corporate Responsibility

Michael J Dolan

Michael J. Dolan Senior Vice President

American Institute of Chemical Engineers
Houston, Texas

It is an honor for me to be here for this year’s Spring Meeting and for the Global Congress on Process Safety.

Let me begin by thanking the American Institute of Chemical Engineers for doing so much to support our profession, the process industries and the petroleum and petrochemical sectors. It’s fair to say that the chemical engineering profession grew up with this industry. And that throughout the 20th century this organization helped shape and define our profession. I’m confident that chemical engineers will remain indispensable in the 21st century and the AIChE will help grow and guide our profession as it continues to play a key role in meeting society’s needs.

I’m proud to say that I am a chemical engineer, I have been a past member of the AIChE, and I was a practicing chemical engineer for more than 20 years before undertaking business and management challenges.

I look back at that time fondly and rely every day on what I learned as a practicing chemical engineer.
Bhopal India: Chemical plant – December 3, 1984 …nearly 3000 people died from a toxic release in the first few days alone, with many children and elderly killed in a matter of minutes. Tens of thousands more were treated for exposure and inhalation.

Offshore North Sea: the Piper Alpha Platform – July 6, 1988…167 workers on the production platform never returned home to their families in what is still the worst offshore oil disaster in history.

Pasadena Texas: Chemical plant – October 23, 1989…22 men and one woman lost their lives in an inferno sparked by the loss of containment and the release of highly flammable gases.

Texas City: Refinery – March 23, 2005…A devastating explosion and fire claimed 15 lives and injured another 170, an accident investigators blamed on a culture which made too little distinction between personnel and process safety.

Deepwater Horizon Offshore Gulf of Mexico – April 20, 2010…11 workers died, leaving an extended network of grieving friends and families to pick up the pieces of their own shattered lives.

All of these and more are Process Safety failures that have occurred during my working career. Each and every one was preventable with good engineering practice and attention to detail. And beneath each of these is a pyramid of near misses in many plants that could have been equally disastrous.

A large process safety accident can happen in an instant, often the result of some small bit of carelessness or in a push to finish a task on time. Yet an instant is all it takes to claim lives, and to change the lives of family, friends and co-workers forever. An instant is all it takes to change a corporation’s reputation. An instant is all it takes to have an impact on public perceptions of an entire industry or of a profession.

I don’t mention these incidents to point blame.

Instead, I hope to impress upon all of you the need to make the safety and security of our operations even more central to our profession than we already do. In the process, I hope that we might raise the bar on process safety to a new level that all of us – as engineers, as teachers, as member companies, and as an industry – aspire to reach.

What’s important … what the public and shareholders expect…what we are called to do … is to elevate process safety to a central role in our operations and a critical component of corporate social responsibility. This emphasis on process safety must extend from the students in our engineering schools to the engineers in design houses to the shop floor and to the board room.

If we fail to act in this regard, we risk doing a grave disservice to our industry, and to the billions of people around the world who depend on the innovations and the goods we produce.

As the title of my talk suggests, process safety and corporate responsibility are interwoven. The two not only intersect, they mutually reinforce each other. As all of us who work in this profession know, there is little question that a focus on process safety and corporate citizenship drives business success and business results.

I learned this lesson early on. My first job out of school was as a consulting engineer. I traveled the country and the world to provide technical support for new refinery and petrochemical startups. I spent time on the shop floor of a lot of different companies and I noticed that some demonstrated a strong commitment to safety and accountability, while others did not.

I also noticed that companies with high corporate standards operated more safely, more professionally, and, ultimately, more profitably than their competitors. This lesson was reinforced when I joined Mobil Corporation and experienced its corporate culture, driven by a relentless commitment to professional and ethical integrity.

Good safety is good business. It is also the ethical and moral way to do what we do.

Over my career, we have tackled the issue of personnel safety among employees and contractors. Today, for example, the oil and petrochemical industry leads American industry with personnel safety incident rates that are less than half the national average and in many cases pacesetting. Over that same time, our industry has not had the focus on process safety that it should. I’ve seen that begin to change over the last ten years.

Process safety is becoming something foundational and integral to corporate responsibility.

AIChE has a history of taking key enabling steps in the area of safety. AIChE founded the Center for Chemical Process Safety (CCPS) in the wake of the Bhopal incident in 1984. The efforts of the CCPS have helped ensure that a disaster on that scale has not occurred since. But accidents resulting in fatalities and injuries continue and it is incumbent on each of us to take action.

Safety and the Public’s Expectations

Why does attention to process safety matter so much? As more nations seek the benefits of economic growth and development, few industries will have a more important role in shaping the world to come than the process industries.

The products that chemical engineers develop and supply are essential to modern life – what historian Daniel Yergin rightly calls “the bricks and mortar of contemporary civilization.”

And importantly, innovation by chemical engineers will be critical in helping society meet the challenges of a world in which global energy demand is set to grow 30 percent by 2040, according to ExxonMobil’s latest Outlook for Energy.

The world is relying on our contributions to create a better, wealthier, healthier future for all people. But it also demands that we make those contributions through operations that are safe, secure, and environmentally responsible.

Purpose and Challenge

To understand our charge, it will help to remember what chemical engineers are, and the role we play in society, as well as to remember just why the American Institute of Chemical Engineers was founded in the first place back in 1908.

Everyone here has heard the joke that a chemical engineer is someone who does for profit what a chemist does for fun. We can entertain such jokes confident in the high esteem in which the chemical engineering profession is currently held.

But it wasn’t always that way. It is worth recalling the dispute that once played out over whether chemical engineering was even a discipline worthy of formal study.

At the 1904 meeting of the American Chemical Society, a prominent industrial chemist named Hugo Schweitzer declared himself – quote – “absolutely against the introduction of chemical engineering in the education of chemists.”

At that time, the prevailing wisdom held that progress in technical chemistry would best be achieved in research laboratories by researchers without engineering training.

This organization was founded expressly to counter such notions. AIChE’s first order of business was to turn to the universities as the vehicle for legitimizing chemical engineering. Soon after, AIChE saw to it that the discipline of chemical engineering utilized the tool of accreditation to assure course consistency and quality – the first profession to do so.

That set the stage for the organization’s growth, and your success over the many years represents the triumph of the practical application of the knowledge of chemistry for the betterment of society.
It should be noted that a century ago, the challenge for chemical engineers was merely gaining acceptance. To achieve it, AIChE focused on education and the training necessary for chemical engineers. One hundred years later, the challenge is different. Now it’s safety and process safety. But the way we start with meeting that challenge is similar to a century ago by focusing on engineering education.

The Primacy of Safety in Engineering Education

If we believe that process safety is integral to the operations of process companies, then we should also acknowledge that safety must be an integral part of the education of chemical engineers.

For a number of years, ExxonMobil has underwritten the National Safety Council’s Robert W. Campbell Award.

Our sponsorship also extends to supporting the Campbell Institute’s efforts to offer real-life industry case studies and safety oriented curricula to business and engineering school campuses – focused on making the all-important connection between business success and effective safety management systems.

I am heartened by many of the steps our industry has taken in recent years to improve safety education in universities’ engineering programs.

The Safety in Chemical Engineering Education (SAChE) program was launched by AIChE two decades ago to develop ways for process safety to be integrated into undergraduate course offerings.

Working with the U.S. Chemical Safety Board, SAChE recently has begun revising undergraduate curriculum requirements to include addressing process safety hazards. Indeed, in the wake of the 2007 chemical plant explosion at T2 Laboratories in Florida that killed four people, the Chemical Safety Board specifically recommended that AIChE and SAChE work to add reaction hazard awareness to baccalaureate chemical engineering curricular requirements.

I am proud to note that you have exceeded that recommendation. As the CSB recently stated, “AIChE’s proposed changes were approved by the Accreditation Board for Engineering and Technology to revise the chemical engineering requirements for academic accreditation to address the management of all chemical process hazards, not just reactive hazards.”

Until recently process safety has been, in effect, an elective both for engineering students and for engineering schools. And too many elected not to give process safety the attention or the emphasis it deserved. These new requirements are a very positive development, and put us closer to a goal where process safety is a fundamental component of the education of every chemical engineer.

We have to ingrain the value of safety in engineers from their earliest days in the profession, and that’s when they are in school.

The Essential Questions

This is all part of a broader change in how we as an industry have to view process safety. No longer should it be just one important aspect of how we manage our operations. It must be central to what we do.
So we should ask the universities: Are you serious about inculcating a belief in the necessity of safety to your students? Have you embedded process safety throughout your curriculum, and not just in a single course? Are you giving students the tools to understand safety in all aspects of process operations?

While it should start with colleges and universities, it shouldn’t end there. Safety must be a key element of every aspect of every job.

So we ask design engineers: Are your designs merely “good enough,” or do they include measures that account for the unlikeliest of middle-of-the-night incidents when something may go wrong? Have we designed our facilities for not just steady state but the transient and riskier activities of startup, shut down and recovery from upset? Have we designed in multiple barriers to avoid loss of containment?

We ask manufacturing engineers and process safety specialists: When you perform risk assessments and HAZOP reviews, do you treat them as just some of the many tasks to be accomplished that day? Or do you bring fresh eyes, critical thinking, and an appreciation for the important consequences and risks that must be understood and properly managed? Are you using the latest tools like transient HAZOPs and are you learning from the root cause analysis of process safety near misses in your facilities?

We ask executives: Are you demonstrating a visible commitment to process safety and operations integrity?

Are you working to implement systems that establish policy, set high expectations, and provide the resources for safe process operations? Are your incentive systems rewarding safe operations? Is safety a core value for your enterprise, or just one of many key priorities? And are you building a culture for process safety along with the one you are building for occupational safety?

And we ask AIChE, the American Fuels and Petrochemical Manufacturers and the American Chemistry Council: Are you doing enough to make process safety a regular focus of meetings such as this? Is process safety just the business of focused “safety” groups, like this week’s Global Congress on Process Safety, or does it find its way into all of the areas where you develop programming and provide technical leadership? Are you doing enough to keep the issue at the forefront throughout the year? Are initiatives such as SAChE and Responsible Care enough, or is there more that can be done?

These questions are as important as the answers they elicit, because asking them is vital to instituting a system and culture of safety that underpins sustained business success.

ExxonMobil Safety Culture

What I’ve just described is an area we work very hard at ExxonMobil, where one of the most important ways we manage risk is by focusing on process safety as the critical element in a comprehensive corporate citizenship approach.

When we overhauled our approach to safety in the wake of the Valdez accident in 1989, we started from first principles to give effect to our long-held commitment to protect lives and protect the environment. … In time we broadened the scope of these efforts to encompass process and procedural improvements. … Now we are focused on fostering a safety culture that drives safe behaviors.

To that end, ExxonMobil has developed a comprehensive management system – known as the Operations Integrity Management System, or OIMS — that guides the activities of each of our more than 80,000 employees, as well as our third-party contractors, around the world. Over time and through constant effort, it has become embedded into everyday work processes at all levels. It ensures we operate the same safe way, every day and everywhere around the globe.

Through OIMS, we focus on leadership and on identifying, assessing, and mitigating risk. We concentrate on the development of, as well as the training for, critical operations and maintenance procedures. We relentlessly work to assess the current mechanical integrity of our facilities, formulating plans and methods to maintain their integrity into the future.

And we carefully design and steward proper management-of-change processes to reinforce strict adherence to approved processes and to avoid incidents.

We work hard at preventing any loss of containment realizing that any release could result in fatalities. This starts by cataloguing the risks and scenarios, and employing a probability-consequence risk matrix to help focus the overall risk reduction effort. Then we identify ways to mitigate the risks, designing-in multiple safety barriers in our operation before relying on the human element. This is a critical feature of our approach and so I will say it again. We identify the risks and worst case outcomes. We prioritize the risks. And we mitigate the risks with multiple engineered barriers backed-up by well-trained human intervention as the last barrier.
In the event of an incident or even a near-miss, we take great pains to investigate all aspects of what transpired, considering both the actual and potential consequences to determine steps to take to prevent similar future occurrences.

Each incident is investigated with the same rigor providing a rich data base that is then shared through our global engineering networks to ensure the learnings are implemented in future design and in our operations around the globe.

What OIMS makes clear is that the only way to improve is to constantly study what works and what doesn’t. Routine assessment of our operations leads to effective implementation and continuous improvement.

We would be doing the industry a disservice if we kept these learnings only to ourselves. So working with the American Petroleum Institute, the American Fuels and Petrochemical Manufacturers and the American Chemistry Council, we share leading indicators of process safety events with an eye to sharing information and preventing future accidents.

To work properly, this safety system must be part of a broader culture of safety, and that starts with leadership – because leadership drives culture, and culture drives behavior. Leaders influence culture by setting expectations, building structure, teaching others, and stewarding results.

This is why the first element of OIMS is “management leadership, commitment, and accountability.” ExxonMobil managers are expected to lead by demonstrating a visible commitment to safety and operations integrity. In our company, all loss of containment and process safety incidents are rigorously analyzed by our experts and shared via our extensive computer based networks.

Incidents are reported monthly to our company Presidents, our Management Committee and our Chairman and CEO. Progress on process risk reduction and process safety management is a key component in the evaluation of all our managers, supervisors and executives.

But management alone cannot drive an entire culture. For a culture to flourish, safety must be embedded as a core value throughout the workforce supported by each person’s commitment to stay safe and to be responsible for the safety of those around them.

The structure for safety we have instituted at ExxonMobil through our Operation Integrity and Management System is aimed at making sure safe behaviors are internalized by every employee and contractor on our sites.
Our approach to safety and operational excellence is still a work in progress, of course. And it will always be. But I believe our approach so far offers a model for others in the petroleum and petrochemical industry. Over the last ten years we have had a full court press on the identification and mitigation of process safety risk.
In our Refineries and Chemical plants, we have permanently mitigated over 90% of the most significant risks in those operations, and have temporary risk mitigation strategies in place as the balance of the identified risk is worked through engineering, modification and implementation. Importantly, we promote ongoing risk discovery through formal processes we all use as well as through operational and experiential means, so that each source of previously unidentified process risk can be mitigated appropriately.

Taking Up This Moral Charge

Ladies and gentlemen, I submit to you that we have an imperative as an industry to commit ourselves to a safety-centric approach to process operations.

If we fail to take up this moral charge, we risk the welfare of our employees and communities, we risk alienating the public and demeaning our profession, and we risk inviting government action that imposes well-intentioned but often times misguided regulations and requirements.

To its credit, AIChE has taken important strides in this regard with the creation of the Center for Chemical Process Safety.

The American Chemistry Council, too, should be commended for its Responsible Care efforts in recent years. Responsible Care provides member companies a structured framework to achieve world-class operational performance in an evergreen process of continuous improvement.

No less important, the very existence of the Responsible Care program – and the commitment of member companies to its goals – affords the industry a great degree of credibility with government officials on a wide range of operational issues. It helps give us a voice in shaping regulatory frameworks around the world. Beyond that, it provides a seal of quality that offers assurance to customers and communities.

It is our responsibility in the process industry to operate safely and responsibly. It is your responsibility as a practicing chemical engineer or as a leader in the process industry to ensure that process safety is integral to every aspect of what you and your company do. It is quite simply a moral and ethical obligation that we in this room all share.

Conclusion

Let me close by recounting a tradition from Canada that I think communicates the moral duty that falls to us.
When an engineering student graduates in Canada, he or she takes part in a special ceremony hosted by practicing engineers to welcome the new graduates to the profession and, in light of the history of industrial accidents, remind them of their ethical duties. The ceremony is called the “Ritual of the Calling of an Engineer.” If you ask your colleagues in Canada they will say that this was in many ways a more meaningful ceremony than their graduation itself.

Like the Hippocratic Oath taken by doctors, the “Ritual of the Calling of an Engineer” invites graduates to understand the ethics and obligations of their engineering profession.

On this occasion, the engineering graduate receives a ring to wear on the little finger of the working hand. The ring is designed to rub against the drawings and designs of the engineer, serving as a constant reminder of the ceremony – and the ethical obligations of our profession every day.

I have always admired this ritual. It helps instill in our upcoming engineers the values that are central to our profession. It ensures they keep these values in mind throughout the course of their careers. And you will notice that Canadian engineers wear their ring proudly as it rubs across the work they do, the designs they complete, the drawings they approve.

I like this ritual because it supports a basic truth – that instilling core values in young engineers is the way to guarantee the long-term health of both our profession, and the process industry.

As someone who has been around this industry now for 37 years, I have come to appreciate this truth more than ever. So I want to leave you today by recalling what Dr. Charles McKenna, one of the founding fathers of AIChE, told the very first meeting of this society in 1908.

Dr. McKenna said, “The noblest aim before us … the one which most amply justifies us before all the world, is our ambition for the enlightenment and ample equipment of our successors; that is, for the improvement and the training of the Chemical Engineer of the future.”

This is our calling. This is our duty. By our words and by our actions we can teach our sons and daughters … so we must take as our solemn responsibility the need to teach the new generations of engineers who will replace us and, hopefully, build on our accomplishments in a manner that exemplifies safety, ethics, and corporate responsibility.

Let us dedicate ourselves to elevating the core values of personnel safety and process safety to a central operating principle of all our endeavors.

Let us dedicate ourselves to making the process industries the pacesetters of safe operations.
And let us simply dedicate ourselves to a future where Nobody in our plants or in our host communities Gets Hurt.

Thank you for your kind attention.

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