By Dave Poole
Preamble
A common definition of risk is “a deviation from a desired outcome that can be either positive or negative”. As basic as this definition is, it becomes increasingly challenging to express when you are dealing with such a contentious issue as shipping crude oil in Canadian waters.
What is the “desired outcome” when it comes to shipping crude oil in Canadian waters?
The “desired outcome” depends on your perspective – and perception becomes reality which defines the risk. Depending on which side of the debate you are on regarding the shipment of crude oil in Canadian waters, your perspective of risk will vary. Factor in individual and societal perspectives and you begin to see just how challenging it is to gauge the actual risks in order to make informed decisions.
Can a common frame of reference be defined in order to gauge the risks of shipping crude within Canadian waters?
In the spring of 2017, Dillon Consulting Limited (in partnership with RoyalHaskoningDHV, Maritime Research Institute of the Netherlands and RPS ASA) developed an Area Risk Assessment (ARA) Framework for Transport Canada that answered two questions:
- Where are the most vulnerable areas within Canadian waters to a ship-source oil spill, taking into consideration existing spill preparedness and response activities, local geography, environmental sensitivities, and ship traffic volumes?
- Are existing spill preparedness and response activities sufficient to reduce the inherent risks of a ship-source oil spill and if not, what additional measures are necessary?
Principles of the ARA Framework
The ARA Framework was designed to identify and evaluate the risks (uncertainties) posed by ship-source oil spills, to allow the uncertainties to be characterized and integrated into spill prevention, planning and management.
How do you measure the chances of a ship-source oil spill occurring in Canadian waters?
We took an “evidence-based” approach by analyzing the actual movements of ships within Canadian water using a numerical model that allowed us to spatially analyze and map the frequency of ship-source oil spill scenarios.
The challenge we faced was defining a frequency scale that took into consideration the full range of possible oil spill scenarios. Again, a relatively simple principle, and when we analyzed the shipping traffic, the frequency scale ranged between 1:10 years to capture the smaller volume spills to upward of 1:10 Billion years to capture scenarios involving the full loss of an oil tanker such as an Aframax tanker. This was necessary in order to address one of the fundamental principles of risk:
Less severe events tend to happen more often.
Now, as I mentioned before, perception drives risk, and when you present quantifiable and measurable information such as frequency, it is critical that the context is appropriately defined and easily understood. What I mean is “how large do I want to cast my net to quantify the frequency of a ship sourced oil spill?”…no pun intended. Just like the previous fundamental principle of risk, this one is also true.
Frequency goes up the larger the area you look at.
The best way to explain this is to draw analogies in other areas – provide some context that tie into more of a societal view of what is acceptable and unacceptable view of risk.
Other Perspectives of Risk
Lightning Strikes
According to the National Geographic News, the Earth is struck by lightning approximately 100 times per second. I realize that certain areas of the earth have more of a propensity for lightning strikes than other areas, but with the Earth having a surface area of approximately 510,066,000 square kilometers, various frequency calculations can be made, such as:
- 6.2 lightning strikes each year per square km; or
- 61,907,000 lightning strikes per year in Canada; or
- 3,153,600,000 lightning strikes per year over the entire surface of the Earth.
As you can see, the larger your perspective, the higher the frequency gets. Conversely, the more focused you become, the frequency goes down. As an example, if the question was “What are the odds of someone in the United States being struck by lightning each year?” the answer would be “1 in 700,000”. From a societal perspective, that would seem to be acceptable given that this issue is not at the forefront of society’s collective consciousness.
When it comes to determining what is considered acceptable or tolerable, it’s in the eye of the beholder. However, there are some engineering standards that take a frequency-based perspective when setting design acceptability thresholds, as shown below.
Flood Protection Standards in Canada
- In the province of British Columbia, the 1 in 200 year design flood return period is used for the Management of Flood Protection Works
- In the province of Manitoba, the expansion of the Red River Floodway to protect the City of Winnipeg from overland flooding was designed based on a 1 in 700 year flood event (previously it was 1 in 160 year)
Design of Critical Infrastructure
-The Canadian Standards Association CAN/CSA-Z276-15 for Liquefied natural gas (LNG) – Production, Storage, and Handling establishes essential requirements and minimum standards for the design, installation, and safe operation of liquefied natural gas (LNG) facilities. Earthquake Design Return Period is 1 in 2,475 years to prevent collapse, fire protection system to be operational; and no release of significant quantities of LNG.
The list is by no means exhaustive but does provide some perspective of what society is willing to accept in some areas.
Summary
In the end, a common, objective-based frame of reference to define the risks associated with shipping crude oil in Canadian Waters is critical so that informed decisions can be made in order to properly balance the economic benefits with society’s legitimate concerns. In the current debate, too often information is taken out of context – with other information and facts ignored or dismissed.
For example, I have heard on several occasions that the TransMountain expansion proposed by Kinder Morgan is too risky because there would be an 8-fold increase in tanker traffic. To understand the risks of an 800% increase in the volume of ship traffic, the proper context is needed (as I have previously mentioned), otherwise, one cannot rationalize and technically defend what are the corresponding risks.
Ship traffic is more than just counting the number of ships – the distances that these ships travel has to be taken into consideration. To better gauge the risks of the TransMountain expansion, the question should be:
How much does the expansion of the TransMountain pipeline increase the total number of nautical miles that all ships travel within the southern Coast of British Columbia?
Based on shipping traffic data for the calendar year 2014, all commercial ships within the southern Coast of British Columbia sailed approximately 2.75 million nautical miles, with oil tankers contributing 2% of the total – approximately 55,000 nautical miles.
With the proposed TransMountain expansion, there will be an additional 348 tankers traveling 44,000 nautical miles per year within the southern Coast of British Columbia. While this represents an 800% increase in the number of tankers calling on the new TransMountain pipeline site, this represents a 1.6% increase in the total number of nautical miles sailed within the south Coast of British Columbia.
Depending on the frame of reference you take when determine the risks, your perspective changes, as does how you go about quantifying the risks.
Yes – there will be an 800% increase in the number of tanker ships calling on the expanded TransMountain terminal.
Yes – there will be a 1.6% increase in the total volume of ship traffic within the south Coast of British Columbia due to the TransMountain expansion.
However, you still need to factor the chances of a ship-sourced incident occurring – and the ARA Framework that was developed by Dillon, defines the frequency scale between 1:10 years (for smaller volume oil spills) to 1:10 Billion years (for large volume oil spill such as a full loss of an oil tanker).
Although both answers are correct, the reliance upon a singular line of argument polarizes the debate. “If you can’t prove me wrong, then I must be right”. Balance and a more holistic perspective (i.e. taking the frequency of an oil spill into account) are needed to rationally debate the issues and answer the question “What is the desired outcome when it comes to shipping crude oil in Canadian waters?”
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Source: Dave Poole on LinkedIn
