Incorporating Future Climate Scenarios in Oil Industry’s Risk Assessment: A Greek Refinery Case Study

Abstract

The impacts of climate change are anticipated to become stronger in the future, leading to higher costs and more severe accidents in the oil industry’s facilities and surrounding communities. Motivated by this, the main objective of this paper is to develop, for the oil industry, a risk assessment methodology that considers future climate projections. In the context of an action research effort, carried out in a refinery in Greece, we adapted the organization’s extant risk management approach based on the Risk Assessment Matrix (RAM) and suggested a risk quantification process that incorporates future climate projections. The Climate Risk Assessment Matrix (CRAM) was developed to be used to assess the exposure of the facility’s assets, including human resources, to future climate risks. To evaluate CRAM, a comparison with RAM for the specific organization for the period 1980–2004 was made. Next, the application of CRAM for the period 2025–2049 indicated that, even though the resilience of the operations of the company to extreme conditions seems adequate at present, increased attention should be paid in the future to the resilience of refinery processes, the cooling system, and human resources. Beyond the specific case, the paper provides lessons for similar organizations and infrastructures located elsewhere.

Organising for Resilience to Climate Change in Critical Infrastructures: The Application of Viable System Model in an Oil Refinery

“…The design effort was assigned to a team of managers and external academics and researchers that used the concepts of the Viable Systems Methodology and elements of the related VIPLAN method, in the context of an action research study. Before moving to the design of viable organisation, the project commenced by determining the effects and risks of climate change to the oil industry in general and to the specific company in particular (Katopodis and Sfetsos 2019;Katopodis et al 2021).…”

“…The regulatory/supporting functions for the primary activities were: knowledge of internal (refinery) resource assessment w.r.t. climate-induced hazards development (auditing process); development of future climate scenarios to identify potential hazards; development of Climate Risk Assessment Matrices (CRAM) (Katopodis et al 2021) in order to prioritise hazards and responses; training of the "dedicated" CRPO representatives and managers and also the rest of the employees in the units; determination of the thresholds for the human and non-human assets (again w.r.t. climate-related hazards); development of recovery procedures comprising the elements depicted above; coordination of the recovery processes that extend to more than one formal units and areas; maintenance of the facilities at the state assumed in resilience provision decisions; and, determination, at the strategic level, of the resilience requirements for the entire facility, i.e.…”

“…At the last stage of the research method applied, after revisiting Table 5 and reflecting on the degree of response of the design to the corresponding questions, the response and viability of the CRPO to the effects of future climate scenarios was examined in a simulation study. Climate simulations with the Advanced Weather Research and Forecasting (WRF-ARW) (v3.6.1)model, forced by EC-EARTH, which was dynamically downscaled to the region of Greece at a scale of 5 × 5 km 2 ,were performed for the future period (2025-2049), for two RCPs (4.5 W/m2 and 8.5 W/m2) (Katopodis et al 2021). External academic researchers were involved in this endeavour, supported by the management of the HSE department (System 4).…”

Risk Assessment in Industry Using Expected Utility: An Application to Accidents’ Risk Analysis

“…The values for C are determined based on the classification of different risk categories by assigning a value between 0 (negligible impact) and 1 (high or catastrophic impact) to C. This classification can be performed by experts in the various technological areas and several tables with decision criteria have been developed to facilitate the assessment and to evaluate the consequences of risk (see e.g. [5], [6], [7], [8], [9]). Some tables, for example, consist of 4 risk categories: catastrophic, critical, marginal, negligible and the risk factor RF ranges then between 0 and 1, where 0 means that there is no risk and 1 means that there is a high or maximal risk [9].…”