Tuesday, January 28, 2014

LNG Risk Management

By Lieutenant William J. Hickey, USCG

Risk Management has proven to be a critical component to promoting safe shipping. The combination of progress in Arctic shipping, an increasing demand for the use of alternative fuels and currently emerging environmental requirements make risk management an essential tool to ensure safety.

On January 29th, Pacific Maritime Magazine and United States Coast Guard Sector Puget Sound will produce a forum intended to explore the next steps in developing a compliance framework for the use of Liquid Natural Gas (LNG) as a maritime fuel source. The event will offer the maritime industry an opportunity to hear from the regulatory and policymaking community on the anticipated national and local regulatory environment for LNG fueled vessels, LNG fuel bunkering operations, and LNG maritime fueling facilities.

Sector Puget Sound’s holistic approach toward understanding the unique hazards specific to Liquefied Natural Gas (LNG) as a marine fuel is vital to the successful implementation of rules and regulation. LNG possesses many major environmental benefits and economic advantages. Even though there is significant value associated with using LNG as a marine fuel, there are associated hazards that must be managed. Should the United States continue the shift towards alternative fuels, the US Coast Guard is prepared to foster our industry relationships and enforce appropriate safety requirements.

At present time, US Coast Guard Sector Puget Sound’s progressive industry outreach program promotes and enhances our understanding of LNG, and initiates guidelines that will appropriately fit the needs of our customers. With this in mind, Sector Puget Sound’s Officer in Charge Marine Inspection (OCMI) directed a local work group to research, partner, and develop policy that provides industry with a timely regulatory framework to address impending technology.

While there are risks involved in bunkering LNG, they are manageable with proper training and the crew competencies described in 33 Code of Federal Regulations (CFR) 127. Previously, the risk of release during LNG bunkering occurred as a direct result of crew and company inattention. All risks identified with the handling of LNG are serious and demand comprehensive risk assessments and risk management strategies.

LNG Release Risk
A risk involved with LNG is the release of cargo vapor into the atmosphere during bunkering operations. LNG has a unique behavior and we must first understand LNG’s differences and concerns as compared to traditional marine fuels associated with LNG.

Fore example, LNG is cryogenic, and remains a liquid only as long as it is held at extremely low temperatures. At higher temperatures it becomes flammable, and it requires specialized training to handle it properly and safely. The materials used in the movement and storage of the liquefied gas need to be carefully selected, making the equipment involved in all aspects of the fuel’s storage and transportation more expensive.

Some more general concerns include a lack of understanding by the public, coupled with concerns over the hazards of a release. Liquefied natural gas is considered a greenhouse gas, and a single serious incident involving LNG will affect the entire industry negatively.

A demonstration at the American Bureau of Shipping (ABS) Academy in Seattle, WA in June 2013, confirmed significant differences between LNG as compared to other energy resources. ABS used the example of opening and closing a cryogenic valve generally with an operating range of + 80 degrees C to minus 196 degrees C. As the valve is opened, the cryogenic liquid passes through the valve and when the valve is closed it impedes the flow of liquid; during a routine oil and gas process this generally would not be a safety issue. The main difference when dealing with a cryogenic liquid is that this liquid becomes trapped within the valve body. This could be a hazardous condition, because trapped LNG may build pressure as it warms and has the potential to rupture components. This is an example of one of the risks involved in using LNG as a marine fuel. The release of LNG while bunkering can be potentially dangerous based on previous incidents.

Detailed steps to prevent LNG releases while bunkering, and methods to eliminate cargo vapor into the atmosphere while disconnecting transfer arms, is outlined by the Society of International Gas Tanker and Terminal Operators (SIGTTO). SIGGTO provides guidance on the safe operation for disconnecting transfer arms in the “LNG Transfer Arms and Manifold Draining, Purging and Disconnection Procedure.” Although this guidance is based on employing rigid transfer arms at a facility, the principles for hose systems (ship-to-ship, truck-to-ship) are considered to be the same. SIGTTO identified two incidents involving LNG releases while draining and purging of the manifold. These accounts suggested that there was a level of complacency within the crew and management involved which resulted in the release of LNG. The previous incidents provided valuable lessons learned. As a result, we can prevent future incidents by mitigating all aspects of manageable risk.

Fire Risk
This incident occurred while draining and purging the manifolds at the end of loading. The weather conditions were dry and very still, with no wind. The purging was proceeding with the vents and manifold drains to atmosphere open. Progress of the operation was slower than normal as a result of problems with the nitrogen supply. (There may also have been some pressure to complete the operation to avoid delay to sailing.) A member of the ship’s staff approached the vent to check with a gas detector when the gas cloud ignited, source unknown. The fire was very short lasting, really only a flash fire, and had largely burnt out before the fixed shore monitor was brought into operation. However, the crewmember involved suffered serious burns. Despite thorough investigations, the source of ignition has never been definitively identified. It may have been some unexplained fault with the gas detector or it may have been static electricity. Another possibility was a spark generated by a dropped object. No evidence could be discovered to support any of these hypotheses.

Vapor Release Risk
The Secretariat has recently become aware of another incident. During the draining and purging operation after cargo discharge a release of LNG and vapor occurred. The LNG came into contact with two persons, and several persons were located inside the vapor release. Fortunately, no one was hurt and there was no ignition of the vapor.

The immediate causes for the release were identified as:
• Failure to drain the piping between the ship’s ESD valve and the double shut valve

• Failure to close the hard arm vent valve when the methane content was greater than the agreed percentage by volume

• Opening an ESD valve with hard arm vent open.

 Root causes for the release were identified as:
• Failure to comply with established procedures

• Failure to have adequate procedures

• Competence of personnel undertaking the operation

Manageable Risk 
In Vice Admiral John P. Currier’s, US Coast Guard paper on “Risk Management for the Proficient Operator,” VADM Currier presents the concept of “The Risk Spectrum,” and the two elements of operational risk: those that are manageable and those that are beyond our control. Although this article was intended for US Coast Guard use, the element of manageable risk must be understood while bunkering LNG. Examples of these risks are provided in the table below:

For LNG bunkering operations to be conducted safely, it is essential that a detailed procedure is established, there is good communication between shore to ship or ship to ship, and that the crew is competent and has been trained to procedure. It is necessary that operators assess their competency management systems to ensure LNG transfer personnel are reserved for the most exceptional talents of their trade and are appropriately trained. In “Understanding the human element in LNG Bunkering,” published by Lloyd’s Register Consulting, they have found that, “There are many advantages of an effective competency management system, for example, improvement of staff motivation, a framework for staff development, reduction of incidents and accidents.”

This study also revealed, “Significant consequences can arise when competence is not managed following the introduction of new procedures and equipment.” It would be common to recognize companies that are now utilizing LNG as a marine fuel for the first time, and how proficiency must be managed effectively throughout an organization for a successful transition. VADM Currier acknowledges that there are certain unmanageable risks involved that are beyond crew or operator’s control. However, the Coast Guard’s operational risk model proves to be critical to mission success. By adopting this model for LNG operations, it increases the safety of personnel, property and environment.

Current LNG Regulations
LNG regulations that currently govern crew competency are explained in 33 CFR 127. Two elements of VADM Currier’s manageable risk model can be applied to LNG operations; Crew Selection and Qualification/ Proficiency. US LNG bunkering operations require persons in charge (PIC), to have at least 48hrs of LNG transfer experience, possesses professional knowledge of LNG hazards, have an extensive understanding of existing and ever-changing laws and regulations such as 33 Code of Federal Regulation 127 Subpart B; and complete familiarity and working knowledge of the operators vessel/facility Operations Manual & Emergency Manual procedures “examined” by the US Coast Guard Captain of the Port (COTP).

The operator is responsible to ensure that all employees involved in transfer operations have training which includes but are not limited to Advanced LNG firefighting procedures, LNG properties and hazards, training and a general working knowledge of the company’s, Operations Manual and Emergency Manual, security violations & security procedures, LNG vessel design and transfer operations, LNG release response procedures, first aid procedures that include response and treatment for frostbite, burns, cardio-pulmonary resuscitation and transporting injured personnel. These standards and other factors will be assessed by the COTP and his designated representatives to ensure safe operations when handling, transferring or transporting LNG.

Risk Management is essential to promoting safe LNG shipping and to overall LNG operations in the United States. USCG Sector Puget Sound COTP and OCMI are proactively engaged in a progressive industry outreach program to promote LNG as a marine fuel. The USCG recognizes there are credible risks involved with LNG and its unique chemical behavior are comparatively different to traditional marine fuels. These hazards can be managed successfully through effective risk management and its feature of crew proficiency for LNG operations.

Lieutenant William J. Hickey is a Marine Inspector at Sector Puget Sound. He is a graduate of SUNY Maritime College where he earned a B.E. in Mechanical Engineering and a USCG Third Assistant Engineers License. He was previously stationed at Marine Safety Unit Texas City.