A cost-benefit analysis of investing in safety and risk engineering: The case of Oil & Gas transportation services by pipelines

Alexander Guzman, Behrooz Asgari

Research output: Chapter in Book/Report/Conference proceedingConference contribution

5 Citations (Scopus)

Abstract

Most decision frameworks regarding the implementation of activities to mitigate the risk of failure in pipelines are based on a screening process under a considerable degree of uncertainty, which is generally derived from a subjective judgment or lack of sufficient information. Since the screening process is designed mainly to prioritize the risk mitigation activities according to an acceptable level of risk, the risk index cannot be used to perform a cost benefit analysis. Therefore, the current challenge to pipeline operators concerning pipeline sustainability is implementing risk mitigation activities, such as environment protection initiatives or safety measures. This study attempts to introduce a framework to measure the benefits of the investment in safety measures for pipelines using fuzzy logic as a tool for dealing with uncertainty. Thus, this paper provides a way to determine the surplus between the value of mitigated risk and the costs of the activities associated with such mitigation, using the possibility theory from the fuzzy logic to determine the values of the risk. Therefore, it is possible to determine if the costs associated with these risk management activities are reasonable or not, dealing with a degree of uncertainty of the data. The proposed framework is considering variables such as threat and consequence scenarios, probability of adverse events, vulnerability, failure modes, percentages of risk reduction and mitigation costs.

Original languageEnglish
Title of host publicationPICMET 2014 - Portland International Center for Management of Engineering and Technology, Proceedings
Subtitle of host publicationInfrastructure and Service Integration
EditorsDundar F. Kocaoglu, Gary Perman, Dilek Cetindamar Kozanoglu, Tugrul U. Daim, Timothy R. Anderson, Kiyoshi Niwa
PublisherInstitute of Electrical and Electronics Engineers Inc.
Pages1633-1645
Number of pages13
ISBN (Electronic)9781890843304
Publication statusPublished - 2014 Oct 10
Externally publishedYes
Event2014 Portland International Center for Management of Engineering and Technology, PICMET 2014 - Kanazawa, Japan
Duration: 2014 Jul 272014 Jul 31

Publication series

NamePICMET 2014 - Portland International Center for Management of Engineering and Technology, Proceedings: Infrastructure and Service Integration

Other

Other2014 Portland International Center for Management of Engineering and Technology, PICMET 2014
CountryJapan
CityKanazawa
Period14/7/2714/7/31

ASJC Scopus subject areas

  • Management of Technology and Innovation
  • Strategy and Management
  • Transportation

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  • Cite this

    Guzman, A., & Asgari, B. (2014). A cost-benefit analysis of investing in safety and risk engineering: The case of Oil & Gas transportation services by pipelines. In D. F. Kocaoglu, G. Perman, D. C. Kozanoglu, T. U. Daim, T. R. Anderson, & K. Niwa (Eds.), PICMET 2014 - Portland International Center for Management of Engineering and Technology, Proceedings: Infrastructure and Service Integration (pp. 1633-1645). [6921002] (PICMET 2014 - Portland International Center for Management of Engineering and Technology, Proceedings: Infrastructure and Service Integration). Institute of Electrical and Electronics Engineers Inc..