CONFIDENTIAL

BASIS AND JUSTIFICATION

RISK BASED FIXED EQUIPMENT INSPECTION PROGRAM

Asset Optimization Consultants, Inc.

16000 Barkers Point Lane
Houston, TX

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Risk Based Inspection Page 2

JUSTIFICATION
An inspection program is intended to detect and evaluate in-service damage to process equipment.
The industry is focusing on improving the safety, reliability and profitability of plants, causing a move
from time based to condition based inspection and monitoring of equipment. A Risk Based
Inspection Program uses both the likelihood and consequence of failure to establish a dynamic
(changing over time) inspection and maintenance strategy. The use of Risk Based programs is
relatively new to the process industry, but there is clear justification for this approach. This document
will focus on fixed equipment inspection, and use piping circuits as an example. Piping is the most
challenging category of process equipment to inspect, primarily because of the number of lines, the
limited accessibility, and the difficulty in defining the limits of a piping circuit. In addition, piping is
involved in the greatest number of incidents causing property damage losses according to the report
“Large Property Damage Losses” by M&M Protection Consultants in 1992. This Risk Based
Inspection approach defines the steps to organize and prioritize all equipment, including piping, to
efficiently comply with Process Safety Management requirements while simultaneously reducing the
cost of the program and the risk of incidents. Such an approach requires measuring and managing
the risk of failures in the operating plant.

The intent of the OSHA and EPA regulations for Process Safety Management is to minimize the risk
of release of highly hazardous chemicals. All categories of equipment which contain or control a
hazardous process, including piping systems, must be covered in a Mechanical Integrity program.
The stated purpose of OSHA 1910.119 is “preventing or minimizing the consequences of catastrophic
releases of toxic, reactive, flammable or explosive chemicals.” Appendix C, section 9 Mechanical
Integrity, states, “Equipment used to process, store, or handle highly hazardous chemicals needs to
be designed, constructed, installed, and maintained to minimize the risk of releases of such
chemicals.”

The more recently enacted Environmental Protection Agency regulation EPA 40 CFR 68 for Accident
Release Prevention closely parallels the OSHA regulation, but adds a new section (Subpart G) titled
Risk Management Plan. This section requires an Offsite Consequence Analysis to calculate worse-
case release scenarios for the site. Worse-case release is defined as “the release of the largest
quantity of a regulated substance from a vessel or process line failure that results in the greatest
distance to an endpoint…” The EPA has defined a consequence analysis of the same type used in
Risk Based Inspection. The shortcoming of a worst case scenario approach is the over-emphasis on
the failure consequence without regard to the probability of the event occurring. True risk
management evaluates both the consequence and likelihood of the event, and the combination
determines the risk.

Both the OSHA and EPA documents require that inspection and test procedures follow recognized
and generally accepted good engineering practices. In Appendix C of the OSHA regulation, good
engineering practice is described. “In other words, what were the codes and standards relied on to
establish good engineering practice. These codes and standards are published by such
organizations as the American Society of Mechanical Engineers, American Petroleum Institute,
American National Standards Institute, National Fire Protection Association, American Society for
Testing and Materials, National Boiler and Pressure Vessel Inspectors, National Association of
Corrosion Engineers, American Society of Exchanger Manufacturers Association, and model building
code groups. In addition, various engineering societies issue technical reports which impact process
design. For example, the American Institute of Chemical Engineers has published technical reports
on topics such as two phase flow for venting devices. This type of technically recognized report
would constitute good engineering practice.”

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The API codes covering the inspection of fixed equipment and piping are clearly the recognized and
generally accepted good engineering practices in their respective areas. They have recently been
revised to acknowledge the use of Risk based methods in inspection programs. The API-570 Piping
Inspection Code was the first API Recommended Practice to take a rudimentary risk management
approach, by categorizing piping on the flammability or toxicity of its contents. Class 1 is the highest
consequence category, and Class 3 is the lowest. The required coverage and frequency of
inspections are based on the fluid categories. In a refinery, most of the process lines are Class 2,
based on flammability. The weakness of the API-570 classification scheme is that it uses contents as
the sole basis for determining categories. As an example, the API-570 classification does not
discriminate between a 10 inch line full of liquid propane (Class 1) and a 2 inch propane vapor line
(Class 1). The risk approach defined in this document, called Criticality Rating, is based on the API
Risk Based Inspection methodology and it does provide significant discrimination between the two
propane lines in the example.

An API effort is underway to develop a Recommended Practice (RP-580) for Risk Based Inspection.
The fourth draft of the Recommended Practice has been written. It is anticipated that a final version
will be issued in 2001. The approach presented in this document is expected to meet the full intent of
the RP when it is issued.

Risk Based Inspection was initially developed for application in the nuclear industry. Probabilistic
Risk Assessments (PRA’s) have been used extensively in the nuclear industry following the Nuclear
Regulatory Commission (NRC) Reactor Safety Study (Wash-1400) in 1975. An outcome of that work
is a recognized good engineering practice from the American Society of Mechanical Engineers
(ASME). Their book titled Risk Based Inspection - Development of Guidelines, was published in
1991. ASME has continued to develop methodology for Risk Based Inspection, primarily for the
nuclear and utility industries.

The American Petroleum Institute (API) wanted an approach more directly suited to the chemical and
refining industry, so they started development of a Risk Based Inspection program in 1993. The
development work was performed as a sponsored project through a special committee on Risk Based
Inspection, under the Committee on Refinery Equipment (CRE). The original deliverable from that
project and a second recognized good engineering practice on risk based inspection was the Base
Resource Document on Risk Based Inspection (BRD). API has released the BRD for public sale
in 1996. An updated version of the BRD was issued in May, 2000.

The API CRE and Inspection Codes Task Group has balloted and approved the validity of Risk Based
Inspection for determining inspection strategies and intervals. API 510, Pressure Vessel Inspection
Code: Maintenance, Inspection, Rating, Repair and Alteration, and API 570, Piping Inspection
Code: Inspection, Repair, Alteration, and Rerating of In-Service Piping Systems, have both
been updated to accept the use of Risk Based Inspection for pressure vessels and piping. In
addition, addendum #3 of API 653, Tank Inspection, Repair, Alteration, and Reconstruction,
(approved in December 1998) allows the use of RBI to establish intervals for internal inspections.
These changes in the current codes recognize that inspection frequencies, procedures, practices,
scope, thoroughness, tools and techniques can all be varied depending upon the level of risk
associated with each piece of equipment. For example, higher risk equipment in corrosive service,
especially those with significantly greater safety consequences of failure, should be inspected more
frequently, more thoroughly, with more precise tools and techniques than lower risk equipment. At
the same time, equipment with minimal safety consequences, should a leak occur, may have

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significantly extended inspection intervals, including the possibility of going beyond the current
maximum inspection intervals (10 years for pressure vessels and piping and 20 years for storage
tanks) defined by the codes when RBI is not used.

The Inspection Codes have placed appropriate requirements on the application of Risk Based
Inspection for the fixed equipment in a refinery or petrochemical plant. Some of the requirements
include:
• A systematic evaluation of both the likelihood of failure and the associated consequence of
failure.
• The likelihood assessment must be based on all forms of degradation that could reasonably be
expected in a particular service.
• The effectiveness of the inspection practices, tools and techniques utilized for finding the
expected and potential degradation mechanisms must be evaluated.
• The likelihood of failure assessment should be repeated each time equipment or process changes
are made that could significantly affect degradation rates or cause premature failure.
• Other factors that should be considered in a RBI assessment include: appropriateness of the
materials of construction, equipment design conditions relative to operating conditions,
appropriateness of the design codes and standards utilized, effectiveness of corrosion monitoring
programs, and the quality of maintenance and inspection QA/QC programs.
• The consequence assessment must consider the potential incidents that may occur as the result
of a fluid release, including explosion, fire, toxic exposure, environmental impact, and other health
effects associated with a failure of the pressure boundary.
• After an effective RBI assessment, the results can be used to establish an inspection strategy that
selects inspection methods, appropriate frequency, the need for pressure testing, and the
prevention and mitigation steps to reduce the risk of a failure.
• The RBI assessment may be used to increase or decrease the inspection intervals described in
the code.
• When used to increase the recommended maximum inspection intervals, the RBI assessment
shall be reviewed and approved by an appropriate engineer and authorized inspector at intervals
not to exceed the maximum recommended by the code.

API 570 is the most widely recognized industry standard for piping inspection, and it is one of the
reference documents used in establishing the technical basis for this Risk Based Inspection program.
The Risk Based program deviates from the typical current industry application of API-570 in the
following major area:
Criticality categories are used to rate piping and equipment items rather than the piping classes
originally established by API 570. The Criticality rating improves the discrimination of the inspection
program by identifying the likelihood as well as the consequence of failure. Inspection efforts will
primarily affect the likelihood of failure, with little effect on the consequence. The purpose of in-
service inspection is to prevent equipment failures. The recent revisions to API 570 recognize the
validity of this approach to prioritize the piping.

The following sections are taken directly from API 570:

Section 3.4.3.2 More CML’s should be selected for piping systems with any of the following
characteristics:
a. Higher potential for creating a safety or environmental emergency in the event of a leak.
b. Higher expected or experienced corrosion rates.
c. Higher potential for localized corrosion.

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d. More complexity in terms of fittings, branches, deadlegs, injection points and other similar items.
e. Higher potential for CUI.

Section 3.4.4.3 Fewer CML’s can be selected for piping systems with any of the following three
characteristics:
a. Lower potential for creating a safety or environmental emergency in the event of a leak.
b. Relatively non-corrosive piping systems.
c. Long, straight-run piping systems.

Section 3.4.3.4 CML’s can be eliminated for piping systems with either of the following two
characteristics:
a. Low potential for creating a safety or environmental emergency in the event of a leak.
b. Non-corrosive systems, as demonstrated by history or similar service, and systems not subject to
changes that could cause corrosion.

The Risk Based Fixed Equipment Inspection program used a systematic, well-developed approach to
provide all of the advantages of the above guidelines that have already been established in API-570.

BASIS FOR THE APPROACH

This Program is based on using a relatively simple method of evaluating the criticality of process
containing equipment to prioritize and manage the inspection program. For fixed equipment,
criticality is measured by the risk of the loss of containment. Risk is defined as the product of two
separate components, the likelihood of failure, and the consequence of failure, should it occur. The
intent of risk based inspection is to understand the risk of each item while managing the factors which
control the likelihood of failure.

A Criticality Rating is assigned to each equipment item by evaluating the risk of a pressure boundary
failure of that item. The Criticality Rating is used to select inspection and maintenance work for each
item so that overall plant maintenance costs are optimized to meet established business goals for
reliability and process safety. Both the probability and consequence of failure are determined in
establishing the Criticality Rating. The following figure shows the matrix used to establish the
criticality rating for each equipment item.

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Reliability Based mechanical Integrity

Criticality Rating

Probability Ranking
1 HIGH Consequence
Consequence
A-Catastrophic
A-Catastrophic
B-Very
B-VerySerious
Serious
2 MED HIGH C-Serious
C-Serious
D-Significant
D-Significant
3 E-Minor
E-Minor
Probability
Probability
1-Very
1-VeryHigh
High
2-High 4 MEDIUM
2-High
3-Moderate
3-Moderate
4-Low LOW
4-Low 5
5-Very
5-VeryLow
Low
E D C B A
Consequence Ranking

Figure 1

Asset Optimization Consultants, Inc. (AOC) has developed simplified methods for classifying
equipment according to the Criticality Rating system shown above. The probability and consequence
rankings are determined independently, and then used to establish the Criticality Category. The
consequence of a failure can be defined based on its effect on safety, environmental impact, or plant
reliability.

A minimum amount of data is required to establish the equipment criticality. The Probability Ranking
is established based on the type of equipment being evaluated, the expected or identified active
failure mechanisms, and the confidence in the prior inspection history. The Consequence Ranking is
based on the release of the contained
process using either a flammable, Criticality Rating for Fixed Equipment
toxic, or “reactive” consequence model.
Plant Database
The process of establishing a Criticality
Rating for Fixed equipment is Probability Ranking Consequence Ranking
illustrated in the Figure 2. •Equipment Type
•Internal Corrosion
•Operating Conditions
•Flammable Consequence
•External Corrosion •Toxic Consequence
•Other Damage Mechanisms

Criticality Category

Inspection Planning / Implementation

Update Database

Figure 2

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PROBABILITY RANKING

The Probability Ranking of fixed equipment items is assumed to start as a “4”, and then is modified
based on the anticipated or identified damage mechanisms and rates, as well as the inspections
which have been performed to confirm the actual damage.

The following data is required to perform the probability rating for the fixed equipment items:

Data Requirements
Probability rating for fixed equipment
The inside diameter
The wall thickness
The design pressure
The material of construction and tensile strength
The prior inspection history (number and confidence of previous
inspections) for each damage mechanism
The number of years in service
Internal Corrosion Evaluation
The internal corrosion rate
External Corrosion Evaluation
The external corrosion rate
Corrosion Under Insulation Evaluation
Whether the item is insulated and coated under the insulation
The operating temperature
The humidity of the area
Environmental Cracking Evaluation
The type of environmental cracking expected
The potential for the cracking to occur in the asset being evaluated
Whether damage was found in the last inspection

The Probability analysis starts by calculating the required minimum wall thickness based on the
greater of the code calculation for the pressure stresses or the structural minimum. AOC uses the
following default structural minimums:

Nominal Pipe Size Structural Minimum

1 ½“ or less 0.62
2-8” 0.94
8 “ and larger 0.125

Internal Corrosion

The wall loss is calculated, based on the assumed or measured corrosion rate times the years in the
current service. As a check, the ratio of the remaining wall to minimum wall is calculated. If the wall
ratio is found to be below 1.0, the equipment item in question is reviewed to determine if the data is
correct and the item is safe for ongoing operation.

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Next, the fractional wall loss is calculated, based on the estimated wall loss divided by the original
wall thickness.

The number of inspections performed on the equipment item for the purpose of detecting and
quantifying internal corrosion are counted. A confidence level, from low to very high, is assigned to
the prior internal inspection history. The fractional wall loss in conjunction with the number and
confidence of inspections is used to look-up an internal corrosion factor in a table from the API Base
Resource Document on Risk Based Inspection.

The Internal Corrosion Probability Category is modified from the original “4” as follows:

Internal Corrosion Factor Internal Corrosion

Probability Category
1-9 4
10-99 3
100-999 2
1000 + 1

The Internal Corrosion Probability Category can then be reduced by one category if the wall ratio is
greater than 1.5 and the corrosion rate is less than 0.005 ipy.

External Corrosion

A similar process is used to evaluate the external corrosion, starting by predicting a corrosion rate for
the steel under the insulation, based on operating temperature and humidity. The predicted corrosion
rate varies from 0.001 to 0.014 inch per year, depending on the temperature and humidity. The
concept of “external” age allows the external corrosion to be de-coupled from internal corrosion.
External age can be considered as the years since the exterior surface of the equipment was known
to be in “like new” condition. This could be based on installation age, or the date the equipment was
recoated and insulated. A paint or coating under the insulation provides credit for Corrosion Under
Insulation by reducing the “external” age in service to the original age less the anticipated life of the
coating. Coating life is anticipated to be 1 to 10 years, depending on the type of system which has
been applied. The condition of the insulation weather barrier is brought into the inspection planning
after a formal visual inspection of the equipment has documented its condition.

The external wall loss is calculated, based on the predicted corrosion rate times the “external” age of
the equipment item. Next, the fractional wall loss is calculated, based on the estimated external wall
loss divided by the original wall thickness. The number of inspections performed on the equipment
item for the purpose of detecting and quantifying external corrosion is counted, and the confidence
level is assigned to the prior external inspection history. The fractional wall loss in conjunction with
the number and confidence of inspections is used to look-up the external corrosion factor in the same
corrosion table.

The external corrosion probability category is established in exactly the same manner as the internal
corrosion category.

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Environmental Cracking

The analysis assumes that the combination of materials, process environment (including upsets), and
stresses determine the susceptibility for environmental cracking. A Probability Category is calculated
for an environmental cracking mechanism by evaluating the initial potential for environmental cracking
and the prior inspection history, determining the current potential for environmental cracking, and
calculating the corrosion factor due to the current environmental cracking potential and the adjusted
years since the last environmental cracking inspection. The environmental cracking mechanisms
included in RBI software may include: Wet H2S, Chloride Stress Corrosion (ClSCC) Cracking,
Caustic Cracking, Amine Cracking, Polythionic Acid (PTA) SCC, Carbonate Cracking, and Hydrogen
Stress Cracking from Hydrofluoric Acid.

Initial Potential for Environmental Cracking:

During the corrosion study of the unit, the initial potential for Environmental Cracking in an equipment
item prior to having inspection history can be evaluated using the following table.

Cracking Initial Material / Environmental Criteria

Mechanism Potential
for
Mechanism
H H2S > 50 ppm, free H2O, Not PWHT, HCN > 20 ppm or pH <
5.5.
Wet H2S (Blistering, M H2S > 50 ppm, free H2O, PWHT, HCN > 20 ppm or pH < 5.5.
SOHIC, HIC, SSC)
Or Cracking Agent > 50 ppm, free H2O, Not PWHT, HCN < 20
ppm, no erosion (i.e. stable scale).
L H2S > 20 ppm and < 50 ppm, free H2O, PWHT or complies
with MR-0175, HCN < 20 ppm.
H Chloride (Cl-) concentration > 50 ppm, temperature > 140°F
plus residual stress and dissolved O2 > 10 ppm, all austenitic
stainless steels (304, 316, 321, 347).
Chloride Stress M Chloride (Cl-) concentration 25 - 50 ppm, dissolved O2 < 10
Corrosion Cracking ppm, temperature > 140°F plus residual stress.
(Cl SCC)
L Chloride (Cl-) concentration 5 - 25 ppm, dissolved O2 < 0.1
ppm, pH > 9.0, temperature > 120°F.
H Carbon steel or 300 series SS at temperatures > 200°F and
all concentrations of caustic. Steaming out caustic systems,
and operation upsets, Not PWHT.
Caustic Cracking M Carbon steel at temperatures < 200°F and < 30% caustic
concentration, PWHT of CS welds and bends.
L Operating Temperatures < 110°F and up to 50% caustic
concentration, or temperatures < 150°F and caustic
concentration < 20%.

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Cracking Initial Material / Environmental Criteria

Mechanism Potential
for
Mechanism
H Carbon steel not PWHT and MEA all concentrations and
temperatures or DEA/MDEA > 140°F.
Amine Cracking M Carbon steel not PWHT and operating temperature 125 to
(ASCC) 150°F for all types of amines.
L Carbon steel PWHT regardless of operating temperature and
concentration.
H Sensitized austenitic SS are likely when: surface has iron
sulfide scale, operating temperature > 800°F process upsets
with air and water ingress, poor caustic wash procedures.
Polythionic Acid M Sensitized austenitic SS and non-thermally stabilized 321 and
SCC (PTA) 347 are possible when: surface has iron sulfide scale, higher
upset temperatures, some process upsets with air and water
ingress, good caustic wash procedures.
L A chance for Sensitized SS and thermally stabilized 321 and
347 when: surface has iron sulfide scale, stable operation (no
process upsets), good caustic wash procedures.
H Carbon Steel not PWHT, pH > 8.0 and carbonate/bicarbonate
> 100 ppm.
Carbonate Cracking M Carbon steel PWHT for narrow welds only, pH > 8.0, and
carbonate/bicarbonate > 400 ppm.
L Carbon steel PWHT for wide bands (20”), pH > 8.0, and
carbonate/bicarbonate > 400 ppm.
H Carbon Steel not PWHT with > 50 ppm O2, or with > 20 ppm
Arsenic, or for concentrated HF with > 7% H2O, or for trace
amounts of HF (up to 5%)
Hydrogen Stress M Carbon Steel PWHT with > 50 ppm O2, or with > 20 ppm
Cracking (HSC) – Arsenic, or for concentrated HF with > 7% H2O, or for trace
Hydrofluoric Acid amounts of HF (up to 5%)
L Carbon Steel PWHT, regardless of concentration

The prior environmental cracking inspection history is evaluated for each piece of equipment by
identifying the number of prior inspections, their corresponding inspection confidence, and any
damage found as a result of the inspection. This information, along with the prior potential, is used in
the Environmental Cracking Technical Module to determine the current potential for environmental
cracking and the adjusted years since the last inspection. The corrosion factor for environmental
cracking is calculated by using the current potential for environmental cracking and the adjusted
years since the last inspection.

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The Environmental Cracking Probability Category is calculated as follows:

Environmental Cracking Environmental Cracking

Damage Factor Probability Category
1-9 4
10-99 3
100-999 2
1000 + 1

Other Damage Mechanisms

Other Damage Mechanisms that are identified as potential or active for the equipment item can be
assigned and tracked in RBI software. The following mechanisms are included in the program:
• Brittle Fracture
• Carburization
• Creep
• Erosion
• Graphitization
• Hot Hydrogen Attack
• Hydrogen Embrittlement
• Hydrogen Induced Cracking
• Liquid Metal Embrittlement
• Mechanical Fatigue
• Phase Change Embrittlement
• Stress Corrosion Cracking
• Temper Embrittlement
• Thermal Fatigue

The user assigns the probability of failure category for other damage mechanisms. It is determined
using an engineering assessment outside of the application. The assigned category ranges from 4
(low) to 1 (very high).

Combined Probability Category

The Internal Corrosion, External Corrosion, Environmental Cracking, and Other Damage Mechanism
Probability Categories are independently determined and tracked, then combined to determine the
Combined Probability Category for the asset or equipment component being evaluated. The
combined Probability Category is the highest (lowest numerical) Priority Category for the four
individual categories. When two or more individual priority categories have the same highest value
less than “4”, the combined category is one level higher (numerically lower) than the highest individual
categories.

CONSEQUENCE RANKING

The consequence analysis in the criticality rating program is performed to aid in establishing a relative
ranking of the equipment items on the basis of risk. The consequence analysis is a simplified,

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creditable estimate of what might be expected to happen if a loss of containment were to occur in the
equipment being evaluated. The estimate is then converted to one of five Consequence Categories
which provide a relatively ranking of consequence of failure of the equipment item being analyzed.

The following data is required to perform the consequence rating for the fixed equipment items:

Required Data for

Consequence Analysis

Representative Fluid
Initial State of Representative Fluid
Mixed Toxic Fluid
% Toxic composition
Operating Pressure
Operating Temperature
Fluid Inventory
Leak Duration
Final State of Representative Fluid

The contents of the equipment need to be characterized as a representative fluid. Hazardous fluids
generally fall into one of two categories, flammable or toxic. The main constituent of the process will
generally also be the representative fluid. Occasionally a stream may contain a mixture of flammable
or inert fluids and a toxic fluid, such as a natural gas containing H2S. With such a mixed stream,
models have been developed to simultaneously analyze both the flammable and toxic consequences.
The representative fluid is selected as the major component of the mixed stream, and the flammable
and toxic consequences are both modeled.

In addition to the safety consequences of a release of a hazardous fluid, a production loss

consequence can be assigned to the equipment being analyzed. The final consequence category is
based on the higher of the flammable, toxic or production loss consequence.

Fluids in many process facilities, especially refineries and petrochemical plants, are commonly
mixtures of various hydrocarbons. For hydrocarbons, the representative fluid should match the
molecular weight and volatility of the stream as closely as possible. Flammable consequence results
are not highly sensitive to the exact material selected, provided the molecular weights are similar,
because air dispersion properties and heats of combustion are similar for all hydrocarbons with
similar molecular weights.

It is important to the consequence calculation that the correct initial state of the fluid (i.e., gas or
liquid) be selected. The initial state of the fluid is generally determined from the process conditions
(pressure, temperature and composition).

The program has a look-up table for all of the listed representative fluids to provide the required fluid
properties for the consequence analysis.

Assuming a default inventory of 40,000 lb. for a liquid system and 10,000 lb for a vapor system can
approximate the fluid available for release. These are generally conservative numbers that are based
on AOC experience in analyzing many systems across a broad spectrum of process plants. In

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smaller operations and many batch plants the nominal liquid and vapor inventories can be set at
lower values on a plant-by-plant basis. An alternate method for evaluating inventory is estimated by
grouping the equipment items in the operating unit into process systems and assuming that each item
associated with a system could potentially release the complete system inventory in the event of a
loss of containment.

Single leak sizes are associated with each category of equipment, based on a frequency-weighted
average of the “generic” failure frequencies in the BRD.

The consequence analysis models all releases as continuous. A continuous release is one that
occurs over a measurable period of time, allowing a liquid to form a pool on the ground or a gas to
disperse in the atmosphere.

Release rates depend upon the physical properties of the material, the initial phase, and the process
conditions. Three release rate equations are provided, and the appropriate equation is selected,
based on whether the fluid is liquid or a gas in the equipment, and if it is a gas, whether it will
experience sonic or subsonic flow.

Once the release rate is calculated, the next step is to estimate the duration of the release. The
release duration is set by the shorter of the two criteria:
1. The length of time it takes to detect and isolate the leak.
or
2. The length of time it takes to deinventory the system.

Unless better information is provided during the study, the default values of the detection and
isolation times for a release are set to 5 minutes each.

The amount of fluid released as a result of a leak is calculated simply by multiplying the release rate
times the release duration. The consequence analysis uses a simplified method to calculate the leak
quantity based on the assumption that the release rate is constant over the duration of the release.
This is a conservative assumption, since generally the release rate will decrease with time as the
pressure declines during an event.

The final phase of the fluid after a release is determined from the phase of the fluid at steady-state
ambient conditions.

The consequence of a flammable release is also a function of how likely the release is be ignited.
The probability of ignition is a function of the representative fluid being considered for release and its
operating temperature. In general, as the temperature of the released fluid increases, the probability
of ignition increases. Proximity to ignition sources is covered in the RBI analysis by allowing a
selection of “Near Ignition Source”, which sets the probability of ignition for that release scenario to
1.0.

The flammable and toxic consequence computations have been simplified by using the methods
developed in the RMP Offsite Consequence Analysis Guidance Document, published by the U.S.
Environmental Protection Agency (EPA) on May 24, 1996. Unlike the EPA Risk Management Plan
(RMP) Analysis, conservative cases rather than worse case scenarios are modeled, since the
released inventories are realistic rather than worse case.

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In the release of a flammable gas or volatile flammable liquid, the total released quantity is assumed
to form a vapor cloud. The entire contents of the cloud are assumed to be within the flammability
limits, and the cloud is assumed to explode. For this analysis, 10 percent of the flammable vapor in
the cloud is assumed to participate in the explosion (i.e. a yield factor of 0.10). Consequence
distances to an overpressure level of 1 psi are then calculated. This threshold is considered the
pressure that might cause broken windows, resulting in injury to persons in the affected area.

In the release of flammable liquids or a condensing flammable vapor, the total quantity of the
flammable substance is assumed to form a liquid pool, which is assumed to have a probability of
ignition as defined above. Consequence distances are calculated based on a heat radiation level of
5,000 watts per square meter, which could cause second-degree burns from a 40-second exposure.

For toxic fluids, consequence is also measured in terms of the area affected by the release. Release
outcomes are simplified by assuming that a release in which the final phase is a gas can be
estimated from pre-calculated dispersion modeling using a standard set of atmospheric and
topographical conditions. A release with a liquid final phase can be modeled as a liquid pool with a
release rate from the pool to the atmosphere estimated as the rate of evaporation from the pool.

Meteorological conditions for the analysis are defined as atmospheric stability class F (stable
atmosphere), wind speed of 3.4 miles per hour, and ambient air temperature of 77 °F. The
topography is assumed to be urban (congested) conditions. The toxic endpoint (in mg/l in air) for
each regulated substance is established based on the threshold for serious injury from exposure to
the substance in air. The distance to the toxic endpoint for each listed substance is provided as a
lookup table. The distance is converted into an affected area by assuming an elliptical release
pattern with a 10 to 1 aspect ratio.

Both the flammable and toxic affected area are converted into a consequence category using an
order of magnitude increase in the affected area to change from one category to the next. The five
Consequence Categories go from “A” to “E”. The calibration of the categories was established by
running a wide range of consequence analysis for typical refinery and chemical plant processes and
selecting the ranges that gave a consistent distribution across the consequence categories.

Production Loss Consequence

For cases where an out-of-service equipment item would cause a business interruption, a production
loss consequence can be applied. The consequence will be based on the lost production and
maintenance costs associated with the down time.

Value of Production Loss / Production Loss

Maintenance Costs Consequence Category
> = $10,000,000 A
< $10,000,000 and > = $1,000,000 B
< $1,000,000 and > = $100,000 C
< $100,000 and > = $10,000 D
< $10,000 E

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Consequence Analysis - Heat Exchanger Bundles

A potential failure of a tube in the heat exchanger bundle is evaluated for safety consequence. The
safety consequence analysis looks at the likely leak direction (shell-to-tube or tube-to-shell) and the
hazard of the combined fluids. The analysis includes fluids which are flammable (such as
hydrocarbons), or toxic (such as H2S), or a combination of flammable and toxic fluids. The following
table provides an overview of the Safety Consequence Ranking.

Measures of Safety Consequences

Category Flammable Toxic

A Tube leak could cause a
catastrophic loss of containment or
violent chemical reaction
B Major Flammable HC vapor leak
into a utility system
(Leak rate > 100 lb/min)
C Major Flammable HC liquid leak into
a utility system
(Leak rate > 100 lb/min)
Minor Flammable HC vapor leak into
a utility system
(Leak rate < 100 lb/min)
Tube leak could cause a catastrophic loss
of containment or violent chemical reaction
Major toxic leak into a utility system
(Toxic Leak rate > 5 lb/min)
Minor toxic leak into a utility system
(Toxic Leak rate < 5 lb/min)
(Minor component of mixed process
stream is non water-soluble toxic)
Major toxic leak into a process system
(Toxic Leak rate > 5 lb/min)
Minor toxic leak into a process system
(Toxic Leak rate < 5 lb/min)

D Minor Flammable HC liquid leak into Leak into a toxic system

a utility system
(Leak rate < 100 lb/min)
Major utility leak into a HC system
(Leak rate > 100 lb/min)
E Minor utility leak into a HC system
(Leak rate < 100 lb/min)

Product Loss Consequence

A leak in a heat exchanger bundle is typically small, but it can result in a significant loss of product
since the leak may be active for a significant period of time. The fluid leak rate is a function of the
physical properties of the leaking fluid, the differential pressure across the tube wall, and the effective
leak size in the bundle. The leak is modeled as starting at a diameter equal to the nominal tube wall
thickness at a predicted failure date and enlarging with time. The predicted failure date is the last
tube bundle inspection date plus half of the planned inspection interval. The rate of increase of the
leak size is based on the combined corrosion rate on the inside and outside of the tube. The Average
Leak Rate is based on the leak size on the date at the midpoint of the predicted failure date and the
planned inspection date.

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If the combined corrosion rate < 0.005 ipy, the Corrosion Category is "Low";
If the combined corrosion rate is > = 0.005 and < 0.010 ipy, the Corrosion Category is "Medium";
If the combined corrosion rate is >= 0.010 ipy, the Corrosion Category is "High".

The Average Leak Rate is based on the leak size on the date at the midpoint of the predicted failure
date and the planned inspection date.

Value of Lost Product = (0.5) X [(Unit Value - Leaking Product) X (Average Leak Rate) X (Bundle
Inspection Interval)]

The Product Leak Consequence Category is calculated based on the following table:

Value of Lost Product Product Leak Consequence Category

> = $10,000,000 A
< $10,000,000 and > = $1,000,000 B
< $1,000,000 and > = $100,000 C
< $100,000 and > = $10,000 D
< $10,000 E

Consequence Analysis – Storage Tank Bottom

A leak in the tank bottom should be considered a persistent leak to the ground, resulting in an
environmental consequence. The interesting case is when a low volatility liquid leaks directly to the
ground, with no membrane or slab to prevent the fluid from contaminating the soil, and making it
difficult to detect the leak. In that case, the fluid leak rate is a function of the hole size in the bottom
of the tank.

The leak is modeled as starting at a diameter equal to the tank floor thickness at a predicted failure
date and enlarging with time. The predicted failure date is the last tank floor inspection date plus half
of the planned inspection interval. The rate of increase of the leak size is based on the combined
corrosion rate on the inside and outside of the tank floor.
The volume released will be calculated taking soil type and condition in the affected area into
consideration. The total volume of liquid that leaks into the ground is the product of the leak rate
multiplied by the time it takes to detect and correct the leak. The detection time is assumed to be the
tank bottom inspection frequency unless other formal methods are in place for monitoring for tank
bottom leaks. It is conservatively assumed that the tank could start leaking at ½ the inspection
interval. The effect of the release will include an evaluation of where the leak might ultimately end up,
such as ground only, public surface water (stream, river or lake), or underground water table. Credit
will be applied for leak detection systems when applicable. The following table can then be use to
establish the leak rate as a function of soil type and inspection interval:

Average Leak Rate Estimates in Gal / Day

Inspection Interval Clay Sand or Silt

5 years .08 15
10 years .11 22
15 years .16 31
20 years .23 44

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If the leak estimated above were to occur, it is assumed that it would continue to leak until detected at
the next inspection interval. The effect of the release will include an evaluation of where the leak
might ultimately end up, such as ground only, public surface water (stream, river or lake), or
underground water table. Credit will be applied for leak detection systems when applicable. The
consequence will be based on the cost to clean up the affected area plus any other associated costs.
Based on data available in the US, the cost of cleaning up the contaminated soil can be estimated at
$65 per gallon for a typical hydrocarbon.

The Storage Tank Bottom Environmental Consequence is estimated as the average leak rate
multiplied by the duration of the leak (1/2 the inspection interval) multiplied by the unit cleanup cost.

The consequence category is determined from the following table:

Clean up Costs Consequence Category

> $10,000,000 A
$1,000,000 to $10,000,000 B
$100,000 to $1,000,000 C
$10,000 to $100,000 D
< $10,000 E

The Combined Consequence Category for the item being evaluated is the highest category of any of
the individual consequences that have been evaluated.

Asset Optimization Consultants, Inc. Houston, TX