August 2013, Vol. 240 No. 8


NASA Teams With Consultancy, Targeting Potential Disasters In Oil And Gas Industry

Erin Nelsen Parekh, Associate Editor

Citing the harsh conditions, complex systems and potentially catastrophic consequences of missteps within the modern oil and gas industry, the National Aeronautic and Space Administration has entered into a contract with Deloitte LLP to offer consulting services through Deloitte to the oil and gas industry, focusing on safety and risk mitigation efforts for “black swan” events, incidents of “low probability and high consequence.”

The partnership, formalized June 27 in a ceremony at Johnson Space Center in Houston, began as Deloitte sought a way to prove out the risk mitigation options it offered.

“When we started talking to the oil and gas industry, they found what Deloitte was telling them very interesting and they were very intrigued about the strategies we were talking about. But their comment to us was, ‘Where have you done this before?’ Well, the problem is nobody’s done this before,” explained Deloitte Principal David Traylor, P.E. “They wanted to make certain that whatever Deloitte brought to them had some practical applications.”

Experience with the technology in real-world applications was limited. Traylor, who lives near Johnson Space Center, said he was discussing the problem with friends who worked there when he learned about the potential to cooperate with NASA.
Deloitte had considered partnering with other organizations, Traylor explained, but “we couldn’t find anybody else that operated international space stations.”
“We couldn’t find anybody else that had these capabilities. They are unique.”
“Our alliance with NASA is designed to bring the most advanced operational risk scientists together with practical applications to help the oil and gas industry in its quest to minimize risks and improve their safety culture and processes,” said John England, vice chairman of oil and gas for Deloitte.

(left to right) William “Bill” McArthur, Jr., Director of JSC’s Safety and Mission Assurance office, David Traylor, Deloitte Principal, John England, Deloitte Oil & Gas Chair and Steve Altemus, Johnson Space Center Deputy Director stand for pictures at press event announcing NASA and Deloitte’s strategic alliance to offer advanced risk-management services to oil and gas companies. Thursday, June 27, 2013 at the Johnson Space Center in Houston, photo by Bill Stafford, courtesy of NASA.

NASA will, in some cases, be working as a reimbursed subcontractor for Deloitte, under a provision of the 1958 National Aeronautics And Space Act authorizing it to engage in any partnership or agreement it deems helpful to its work. (NASA has many Space Act agreements.) The agency is not looking to profit under the partnership, although it will not need to budget its own funds for the effort unless it is an avenue of inquiry they would have pursued regardless, which may prove a benefit during a time of reduced federal spending across the board.

“What we want to gain out of this is more along the line of knowledge and experience,” said retired Col. Bill McArthur, Jr., director of safety and mission assurance for Johnson Space Center. “They bring in strengths in areas that we think complement ours, so what we believe is partnering with them will help maintain the skills that our workforce has, skills that we can then turn right around and translate into mitigating the risks of the programs we currently operate.”

Citing programs underway dealing with deep-space transportation, commercial access to low-Earth orbit, and the continued operation of the International Space Station, McArthur said, “These are all high-risk activities and anything we can do to enhance the expertise and skills of our own people is beneficial.”

“To continue to operate as safely as possible, it’s critical for us at NASA to learn from other organizations that face similar challenges when it comes to maintaining a safe working environment. From this collaboration NASA will gain knowledge to help prepare for future missions and to enhance current safety and risk-mitigation technology to address the dynamic, harsh, and remote requirements of emergent programs.”

The specific services on offer through the partnership center around in-depth analyses of safety culture and processes, modeling known risks and identifying potential new risks. Future offerings might include artificial intelligence-driven methods of advising remote workers and a centralized communication hub for discussions of new risks among different groups.

Predictive analytics, “fancy words for looking into the future,” according to Traylor, will be key, relying on modeling software and simulations, regression analysis and information gathering for the individual situation.

Traylor gave the example of a pipeline operator with thousands of miles in its network. A diagnosis of the safety culture at the pipeline company would “measure and monitor the effectiveness of their risk culture so that objectively they can understand if there’s deterioration, they can detect it. And if they detect deterioration, they can take corrective measures before there is a catastrophic event.”

For companies facing a patchwork of systems and a human resources jumble in the wake of mergers, purchases, staffing crises, new construction booms and regulation changes, blind spots are all too easy to imagine.

McArthur emphasized the exhaustive focus on safety required. Safety culture, he said, is “something of which we’re very proud at NASA. I’m not sure why we’re proud of it because in large part we developed it all the hard way.” Tight schedules and budgets erode safety awareness over time, he said, and to avoid incidents an organization operating in a high-risk arena must guard and monitor the effectiveness of its safety culture.

[inline: NASA engineers during a safety examination. Photographer: Devin Boldt, Photo courtesy of NASA]

“We operated the shuttle program for some thirty-odd years and learned some very painful lessons along the way. But at the end of the shuttle program we had the most remarkable process for making decisions based on doing our best to understand the risk. We had a number of tools, work habits if you will, but a number of processes that we adhered to very rigorously to try to categorize risk in clear, uniform terms.”
The events the partnership services are designed to identify are extraordinary in nature. As McArthur put it, a definitive characteristic of a black swan event is that it is “something that happens that people never even conceived could have happened.“
“You go back at the end and you say, if I’d only done this I could have forecast that black swan event and it never would have happened.”

Such hindsight is unrealistic, since any person is extremely unlikely to be able to grasp the whole potential of a complex engineered system of many dynamic parts under all conditions.

“Many studies have found that 70% of all major accidents are the result of multiple causes,” Traylor said. “It’s not just one thing that happens and goes wrong. It’s multiple things, many times interrelated with each other.” Removing just one of the ingredients in a recipe for disaster might avert the problem before it becomes a reality.

It’s difficult to define metrics for success with such unpredictable variables. Although some disasters evaded may be obvious, for instance if a design redundancy is called into play after a failure of the primary system, there are limits in the ability to quantify it.

“How often has there been a Macondo?” asked McArthur. “If there isn’t one for the next five years does it mean anyone has done something well? Or does it just mean that none happened within those five years?”

Still, success should be clear to those on the inside who face the possibility of catastrophe regularly.

“Long gone are the days where oil and gas could just operate where they were very comfortable and had a lot of experience,” said Traylor. “Quite frankly, if you do things that are repetitive, you can rely on history. But if you are using new technologies, new environments that are at the very emergent state, you’re introducing the potential for new risk, and what’s in the new risk can be catastrophic.”

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