1. “How Industry Learns” --- Proposed Project --- Karen Paulk, ConocoPhillips, Chair, Process Safety Group & Ron Chittim, API CRE Chairs & Sponsors Workshop May 15, 2011 Seattle, WA

2. “We have a problem with the refinery industry,” (whose investigations of refinery accidents have uncovered a pattern of safety lapse)” “We have decreasing staff levels, disinvestment in safety, a lack of training, and accidents or near-misses — indicators of catastrophe — being ignored” “Serious incidents at refineries continue to occur at alarming frequency” “U.S. oil refiners are compromising mechanical integrity of their equipment by extending cycles on their plants” “Oil industry’s “run to failure” mentality” “It’s all about the money - the refiners run the units longer to sell as much product as possible” “The large number of fatal or catastrophic incidents in the petroleum refining industry indicates the need for a national emphasis program.” Recent Media Quotes from CSB, USW & OSHA

3. Problem Statement Public perception that refineries are not operating safely and responsibly Continued allegations by CSB, USW and others that refiners are not “serious” about safety Not learning lessons from refinery incidents Aging refinery equipment Upcoming 2012 Labor negotiations Health & Safety will be a major focus of USW Refinery safety issue has some attention in Congress

4. Proposed Project – How to Address Problem Statement Focus is on safety first (vs. cost, business impact, etc.) Develop general statements to describe current industry efforts Develop specific statements with clear examples Examples need to be impactful, highlight efforts and must be easily understood Consider both reactive and proactive efforts Sustained “evergreen” effort Address short-term need Develop longer-term plan to formalize effort Result – ready resource that describes “step-change” or significant efforts vs. incremental activities

5. Resources & Information Needed to Address Problem Statement Need input from CRE, PSG & SFPG - as part of standards management efforts, consider identifying: o Improvements in safety or fill a safety gap o Responses to learnings from issues/incidents in refineries o Significant steps taken to improve mechanical integrity o New provisions that monitor condition/prevent failure by triggering maintenance/repair/replacement o Risk prevention & mitigation improvements o Other (?) CRE Sponsors & Subcommittee Chairs – communicate this project to task forces and encourage information collection per above

6. Resources & Information Needed to Address Problem Statement Contact other standards developing organizations and other industry groups for examples of efforts to add to this project Probably consider as a Phase 2 When appropriate, think beyond “standards” (e.g., training, certification, workshops, etc..) API staff will collect input and develop draft communications package for review and comment API staff and committee leadership to develop long-term structure

7. ”Network” of subject matter experts review, update, and strengthen industry standards for refinery maintenance, inspection, and repair Mechanical integrity is addressed through conformance with API equipment specific standards and recommended practices National and regional safety conferences where lessons-learned are shared among industry representatives API’s Inspector Certification Programs have certified about 8000 inspectors in U.S. employed by over 2000 companies API is collecting leading and lagging incident data per API RP 754 – Process Safety Performance Indicators Mechanical integrity of equipment is managed by condition, not age What is Industry Doing to Address “How Industry Learns?” General Statements – Work in Progress

8. PetroArch Database - sustainable documentation of the data that underpins the technical basis of many codes and standards API 510/570 Pressure Vessel and Piping - inclusion of MOC and internal/external auditing language API 580/581 Risk-Based Inspection - what, when, and how to inspect based on documented prioritization using consequence and probability API RP 584 Integrity Operating Windows – establishing damage avoidance parameters API RP 571 Damage Mechanisms - identification and effectiveness [add Process Safety and Fire & Safety examples] What is Industry Doing to Address “How Industry Learns?” Specific Efforts – Potential Examples - work in progress (needs further explanation)

9. Back Up Slides

10. Implement a robust mechanical integrity programs with an emphasis on thorough inspections of critical equipment Monitor process safety performance using appropriate leading and lagging indicators to measure process safety before major accidents occur Maintain an open and trusting safety culture where near-misses and loss of containment incidents are reported and investigated Dr. Moure-Eraso urges companies to take action to prevent accidents, including: