Oil & Gas Operational Reliability & Safety: Learning from - - PowerPoint PPT Presentation

Mission Critical Oil & Gas Operational Reliability & Safety: Learning from the Transformation of Commercial Nuclear Power

Mary Jo Rogers, Ph.D. Partner, Strategic Talent Solutions March 8, 2011

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U.S. Nuclear Industry Capacity Factor

1971 - 2009

90.5

40 50 60 70 80 90 100 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13

Source: Energy Information Administration

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U.S. Nuclear Production Costs

Cents per kilowatt-hour

Total Production Costs = Operations/Maintenance Costs + Fuel Costs

Source: Nuclear Energy Institute

1 2 3 4 5 1995 1997 1999 2001 2003 2005 2007 2009

2.69 2.03

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U.S. Nuclear Industrial Safety Accident Rate

0.38 0.26 0.22 0.23 0.17 0.17 0.21 0.18 0.17 0.12 0.11 0.13 0.10 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

ISAR = Number of accidents resulting in lost work, restricted work, or fatalities per 200,000 worker hours.

Source: World Association of Nuclear Operators

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Admiral Hyman G. Rickover

“Father of the Nuclear Navy”

1900 - 1986

You have to learn from the mistakes

• f others. You won't

live long enough to make them all yourself.

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Keys to the Nuclear Industry’s Transformation

Leadership of change Self-regulation Evolution of safety culture Transforming the role of first-line supervisors

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Keys to the Nuclear Industry’s Transformation Leadership of change

Self-regulation Evolution of safety culture Transforming the role of first-line supervisors

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Keys to the Nuclear Industry’s Transformation

Leadership of change

Self-regulation

Evolution of safety culture Transforming the role of first-line supervisors

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INPO Four Cornerstones

Assessment Analysis Training Assistance

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Keys to the Nuclear Industry’s Transformation

Leadership of change Self-regulation

Evolution of safety culture

Transforming the role of first-line supervisors

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Nuclear Safety Culture

The core values and behaviors resulting from a collective commitment by leaders and individuals to emphasize safety over competing goals to ensure protection of people and the environment.

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• Leadership Commitment to High Standards

for Safety

• Identifying, Tracking and Responding to

Precursors

• Rigorous use of Human Error Prevention

Tools

• Regularly Assessing Safety Culture
• Building Self-Criticality and a Learning

Organization

Improving Safety Culture

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Keys to the Nuclear Industry’s Transformation

Leadership of change Self-regulation Evolution of safety culture Transforming the role of first-line supervisors

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• STS gathered data from 281 first-line supervisors and

their managers.

• Supervisors who felt they had effectively transitioned

into the role of a member of the management team were considered more effective at performing their job.

• Effective supervisors also perceived greater alignment

with the organization in terms of:

• Being treated as a core member of the management

team

• Having sufficient time with their manager
• Being told the reasons behind major decisions

First-Line Supervisor Alignment

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Keys to the Nuclear Industry’s Transformation

Leadership of change Self-regulation Evolution of safety culture Transforming the role of first-line supervisors

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Mary Jo Rogers, Ph.D. Partner, Strategic Talent Solutions 135 South LaSalle, Suite 3450 Chicago, IL 60603 maryjo@strattalent.com Mobile: 312-203-1479 Office: 312-253-3642

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IHS CERA PRESENTATION Mission Critical Oil & Gas Operational Reliability and Safety: Learning from the Transformation of Commercial Nuclear Power

Mary Jo Rogers, Ph.D. Partner, Strategic Talent Solutions March 8, 2011 The political, economic and regulatory atmosphere facing the oil and gas industry is similar to that faced by the nuclear industry in the aftermath of the accidents at Three Mile Island (TMI) and Chernobyl in the 80’s. Despite intense regulatory oversight and public skepticism, nuclear performance improved substantially over the past 30 years. The nuclear industry completely transformed itself so that U.S. nuclear plants are the most productive, reliable and safest they have ever been. For example:

• In the U.S. capacity factor has gone from 56% in 1983 to over 90% in 2009 and has

averaged over 90% for the past 9 years.1

• Nuclear electricity production costs dropped to 2.03 cents per kilowatt-hour in 2009.2
• Nuclear power plants have become one of the safest industrial environments. Nuclear’s

total industrial safety accident rate was 0.1 (industrial accidents per 200, 000 worker- hours) in 2009.3 (You are now safer working at a nuclear site than at an elementary school.)4

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How did the nuclear power industry become safer, more reliable and more profitable while under such increased scrutiny and regulation post-TMI? What has nuclear done that is useful to the energy industry? “You have to learn from the mistakes of others. You won’t live long enough to make them all yourselves.” This advice is often attributed to Admiral Hyman G. Rickover, known as the father

• f the nuclear navy. Commercial nuclear power took a lot from the nuclear navy. And so there

are many lessons we can learn from commercial nuclear as it became so effective in an increasingly regulated environment. Our experience and lessons learned through our research program suggest that there are four keys to the nuclear industry’s transformation that can be useful to oil and gas:

• Industry leadership of change
• Self-regulation—and the Institute of Nuclear Power Operations (INPO)
• The evolution of safety culture
• Transforming the front-line supervisor

Role of Industry Leadership Forming INPO. In 1979 after the partial core meltdown of Unit 2 at Three Mile Island, utility CEOs recognized that they were better positioned to address the regulatory and plant performance challenges together than they were individually.5 Utility executives formed the Institute of Nuclear Power Operations (INPO), which was incorporated in 1979, even before the President’s commission released their final report on the TMI accident the end of that year.6 The World Association of Nuclear Operators (WANO) was formed after Chernobyl in 1986. Through INPO, industry leaders took it upon themselves to start figuring out how self- regulation could work and how to address the commission’s recommendations. INPO has

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changed over the years but it took the leadership of the executives at the time to pull together and hammer out the first iterations of the institute. Cooperation and Information Sharing. Industry leaders have continued to play a key role in improving reliability and safety, with ongoing executive support of INPO—and supporting industry cooperation and information sharing. The nuclear industry’s cooperative approach to sharing information, best practices and even resources is a powerful factor in the industry’s sustained performance improvements. A good example of this is River Bend Station, located in St. Francisville, Louisiana and owned and operated by Entergy. In 2006 River Bend had a number of reactivity management issues, which means that they had to take power reductions and shutdowns to deal with problems that were going to impact the reactor fuel. One

• f their reactor operators called someone he had met at a committee meeting he attended, the

Reactivity Control Review Committee (part of the BWR Owner’s Group). He called Ed McVey, the chairman of the committee and Exelon’s manager of reactor engineering oversight for the

• fleet. Note that Exelon and Entergy are competitors. Nonetheless, Ed spent a week with the River

Bend operations department and gave them feedback and suggestions, which they implemented very successfully over the next year. Ed spending a week at River Bend to help them was fully supported all the way up his management chain.7 Nuclear leaders have encouraged cooperation and support for information sharing and the work of INPO. Without chief executive support, INPO would have little influence. While fondness for INPO has ebbed and flowed over the years and industry leaders have challenged INPO to improve itself as well. Yet there is recognition that INPO has helped the industry improve significantly. Cooperation and information sharing are foundational to the effectiveness

• f INPO.

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Self-regulation through INPO INPO and its self-regulatory function have evolved over the years. After it incorporated, INPO developed standards that are distinct from the federal legal requirements of the Nuclear Regulatory Commission (NRC) and other regulatory bodies (e.g., state and environmental).8 INPO’s standard is excellence in operational reliability and safety—ever striving for the best way of doing something that achieves the best results in safety and reliability. And the standards have gotten higher over time as the Institute is continually striving for excellence. INPO has four cornerstones—assessment, analysis, training, and assistance.9 Through its four cornerstones, INPO achieves its industry self-regulatory function and provides assistance in continuously improving industry performance.

• Assessment. Assessment is the primary area where self-regulation is achieved. Every plant in

the country is evaluated according to INPO’s performance objectives and criteria (POs and Cs),

• r standards, every two years. An assessment team looks at the data on the operating units

covering a two-year period and spends two weeks at the site observing how the site functions, using experienced people in each functional area—engineering, operations, maintenance, work control, chemistry, radiation protection, training, etc. The assessment team always includes people from other nuclear sites and companies in addition to INPO personnel.10 The assessment team identifies strengths and areas for improvement (AFIs) and provides feedback to site leadership and separately, to the chief executive officer. The plant’s leadership takes the feedback in the final report and writes a response on how they are going to improve the problem areas. Most plants today put in a lot of effort to fix their AFIs. The plant’s overall production and safety performance improves as it addresses its AFIs. Plants highly rated by INPO have excellent generation and safety results.

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The impetus to improve and follow INPO’s counsel has come in part from peer pressure. For example, every year the CEOs of nuclear companies attend an INPO conference developed exclusively for the CEOs, Chief Nuclear Officers and Senior VPs. INPO has a closed session with the CEOs and INPO presents a forced ranking of best to worst performers. Lower performing plants and the utilities that own them are challenged to improve. Industry leaders must maintain a sense that they are still “hostages of each other,” or the peer pressure would not have much effect. “Hostages of each other,” is the title of a book by Joseph Rees (1994), where he describes how the industry changed after INPO because leaders felt that if one plant has a disastrous incident, the entire industry will be seriously impacted.

• Analysis. INPO tracks events and plant performance metrics. There is an INPO index that

includes 10 different metrics, ranging from unit capability, safety system availability to chemistry effectiveness, which are reported and trended monthly. This detailed tracking helps INPO trend reliability and process safety issues. INPO uses the data to provide feedback and guidance to individual sites and the industry in general, and keep track of the progress of problem plants.

• Training. Improved training for operators was one of the main recommendations of the

Kemeny Commission that studied the TMI accident.11 INPO has two training roles, in one they provide the evaluation and accreditation of site training programs for Operations and Maintenance and Technical. Accredited programs are evaluated every four years. INPO established the training program requirements for the industry but the companies themselves developed the programs. Secondly, INPO provides some training directly, for example, for supervisors and new plant managers.

• Assistance. In INPO’s assistance cornerstone, they provide assistance to lower performing

plants by offering insights, suggestions, additional contacts and resources. Problem plants are

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formally identified and also receive additional oversight to help make sure they are taking necessary actions to improve. Evolution of Nuclear Safety Culture Nuclear’s safety culture has improved over the years, even before INPO then the NRC

• fficially defined it and began to evaluate it. Nuclear safety culture is defined by INPO as “an
• rganization’s values and behaviors—modeled by its leaders and internalized by its members—

that serve to make nuclear safety the overriding priority.”12 INPO also developed the principles

• f nuclear safety culture that most sites in the industry made good use of to educate their
• rganizations and communicate expectations around safety culture.

Last fall, the NRC released its official definition of safety culture as “the core values and behaviors resulting from a collective commitment by leaders and individuals to emphasize safety

• ver competing goals to ensure protection of people and the environment.”13 INPO and the NRC

agree that safety culture includes having a safety conscious work environment (SCWE), which is where people feel free to raise safety concerns without fear of retribution. Safety culture does not just mean industrial, personnel or personal safety—avoiding accidents and injuries, but also includes process safety. In nuclear, process safety is essentially process rigor—defining the right way and safe way of doing something, whether it is technical, mechanical or physical, doing it that way and then making sure it is being done that way. In my observation and work with 31 different stations in the U.S. and England, building a stronger safety culture translates into getting better safety results and production results in the long run. Based on our experience, here are five ways to improve safety culture:

• Leadership commitment to high standards for safety—not by words alone, but

by what leaders do and by what decisions are made. Building a stronger safety

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culture requires that management and leadership have high standards around safety and reliability—and hold the organization to those standards.

• Identifying, tracking and responding to precursors, small events—this is

critical so that you can avoid major events by addressing smaller problems when they are less severe and before they have the opportunity to contribute to a significant accident.

• Rigorous use of human error prevention tools—human error prevention tools

are simple practices that nuclear has built into many of its procedures, to help protect safety and reliability. These tools include peer check, three-way communication, and procedure adherence. Plants that make error prevention tools part of daily business tend to be safer and more reliable.

• Regularly assessing safety culture—evaluate how safety norms and attitudes are

actually demonstrated daily in behavior, decision-making and in progress on safety results. The regular assessment feedback helps identify gaps in safety culture and areas in the organization that are more at risk.

• Building self-criticality and a learning orientation—this involves plants and

companies being willing to be open about performance and thus to be more critical about what their issues may be. With greater self-criticality, the operation can pre-empt problems because they identify them proactively. They are more

• pen to feedback from others in the interest of learning and improving.

Professionalism and Elevation of the First-line Supervisor The fourth key to the transformation of the nuclear industry is the transformation of the first-line supervisor (FLS). Years ago, the FLS was a foreman or step-up lineman, still a union guy who was not aligned with senior management but was a more experienced pair of hands

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working alongside the craftsmen and expediting work. After the accident at TMI, there was a push for more extensive training, greater professionalism, and a more important role for the FLS.14 The nuclear supervisor subsequently became better trained but, in 2004 (revised in 2007), INPO developed guidelines for excellence in nuclear supervisor performance after they concluded based on their analyses, that supervisor weaknesses were one of the most common causes linked to plant performance problems.15 INPO emphasized that the supervisors need to be in the field but also need to have a greater oversight role, confront worker behaviors, and be more aligned with site leadership. In our research on what makes front-line supervisors (n = 281) most effective, we found that supervisors who felt more like they were a member of the management team (and had made that transition), were more effective at performing their job. And the most powerful ways to get supervisors to show that alignment were to treat supervisors as core members of the management team, to give supervisors enough time with their own managers, and to tell supervisors the reasons behind major decisions.16 Shift change. And a final word on “shift change.” I understand that you are challenged, as nuclear has been, with the aging workforce, where highly experienced supervisors and workers are at or nearing retirement. The seasoned front-line supervisor or worker may not feel motivated to take on a lot of responsibility or stick their neck out. What we have seen work in this situation is pairing the experienced workers with the new talent, in a mentoring capacity that mimics the apprenticeship model. In this way, they be more apt to get engaged because they have a junior counterpart looking up to them. They may be more likely to feel needed in a way that isn’t as physically demanding but taps into their wisdom and potential legacy. Summary

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The nuclear industry has changed dramatically since TMI and both reliability and safety have improved significantly in a highly regulated environment. The oil and gas industry does not need to be afraid to learn from nuclear—you can take what is useful and leave the rest. Four areas that I believe you can use are:

• Taking leadership of change—and thereby taking control of your future
• Self-regulation—use lessons learned from the formation of INPO
• Building safety culture that gets results
• Transforming the front-line supervisor

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References

1 U.S. Energy Information Administration 2010. Nuclear Power Plant Operations, 1957-2009. 2Nuclear Energy Institute (NEI) May 2010. U.S. Electricity Production Costs and Components

1994-2009.

3 Institute of Nuclear Power Operations (INPO). 2009. Annual Report. Nuclear Safety: Setting

the Global Standard.

4 U.S. Department of Labor Bureau of Labor Statistics. 2008. Injury and illness data. 5Rees, J. V. 1994. Hostages of Each Other. The University of Chicago Press. 6Ellis, J. O. 2010. The Role of the Institute of Nuclear Power Operations in Self-Regulation of

the Commercial Nuclear Power Industry. Remarks before the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, August 25.

7McVey, Edward. Interviewed by Mary Jo Rogers on January 31, 2011. 8Rees, J. V. 1994. Hostages of Each Other. The University of Chicago Press. 9Ellis, J. O. 2010. The Role of the Institute of Nuclear Power Operations in Self-Regulation of

the Commercial Nuclear Power Industry. Remarks before the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, August 25.

10Purcell, Richard. Interviewed by Mary Jo Rogers on November 24, 2010. 11Report of the President’s Commission on the Accident at Three Mile Island. October 1979.

Washington D.C.

• 12INPO. 2004. Principles for a Strong Nuclear Safety Culture.

13 Federal Register (Vol. 75, No. 180) September 17, 2010. Nuclear Regulatory Commission

(NRC) Revised Draft Safety Culture Policy Statement: Request for Comments.

14Report of the President’s Commission on the Accident at Three Mile Island. October 1979.

Washington D.C.

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15Institute of Nuclear Power Operations. 2007. Guidelines for Effective Nuclear Supervisor

Performance, November.

16Rogers, M. J. & Fearing, B. K. 2010. The comprehensive study of nuclear supervisor

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