Global warming and pollution has led companies to rethink their activities concerning green methods of production. Carbon dioxide emissions are the leading cause of global warming and the dangers of global warming have been documented for a long time. Governments have come up with restrictions on emissions, which have forced companies to re-think the way they do production. Quest carbon capture and storage project is one example of how companies are re-thinking their strategy and practice towards carbon emissions. This project is developed by Shell for its Athabasca oil sands project (AOSP) in Alberta. It is the first carbon capture and storage project designed commercially for an oil sands venue. The process of processing sands to get bitumen leads to extensive carbon emissions. The aim of the quest CCS is to cut carbon emissions from its plant by 35% or one million tones which is an equivalent of removing 175000 vehicles from the road each year.
The construction of this site will enable the company to continue extracting oil from the sand mines with relatively low carbon emissions. This is beneficial for the company as it enables it to meet environmental regulations without affecting oil production. Carbon emissions are now highly taxed by the government and development of the project will lead to huge cost savings for the company. This is because the taxes due for emissions will be reduced. The creation of the plant will also create employment for the people who will ensure that it runs properly. Finally, the project establishes Shell as a leading innovator in green technologies. This enhances the brand of the company to the public.
Risk analysis Quest
Risk can be described as the likelihood that a negative occurrence will happen at any given time. It is a result of threats and dangers that the event is exposed to at the time. Risk analysis can be described as the science of assessing the risks something is exposed to and quantifying the risk and establishing measures to militate against the risk. According to Maylor (2010), risk analysis can be divided into three distinct stages. These are; risk identification, risk quantification and risk mitigation. When identifying a risk, we look at the hazards that the risk is associated with. Generally, there are three types of hazards. These are natural hazards, technological hazards and social hazards (Alexander 2002).
Natural hazards are those that humans have no control over. These can include earthquakes, volcanoes, floods and storms. Technological hazards are those caused by a failure of technology such as failed equipment, oil spills, human error and structural failure among others. Social hazards are those hazards that arise from ideological differences in people such as bombing, terrorism and hostage taking (Prah, 2005).
All these hazards put some risk to the project. There can be a risk of equipment failure, building collapses, technological failure among others. After a risk has been identified, the likelihood of it happening is quantified. For example, the chances of equipment failure for a new technology are high because the equipment may not have been extensively tested in the field. This would result in the likelihood of equipment failure in a new technology being high. On the other hand, a building built with the strongest materials to the exact specifications of engineers should be able to perform its tasks easily. The likelihood of a building collapse would therefore be considered low. After all the risks have been identified, mitigation measures have to be decided to minimize the damage if the risk actually occurs (Pinkowski, 2008).
The quest CCS project is located in Alberta in the Canada. This is the first commercial CCS project to be carried out at an oil sands facility anywhere in the world. Alberta is not a very seismologic ally active region in the world. Despite these, there were 819-recorded earthquakes between 1919 and 2013. Although this is not a hugely significant figure, it means that the installation will be a risk from earthquakes. The seismic activity involved usually involves small tremors and many residents may not be aware.
However, for such a project as Quest CCS, this is very significant. The smallest earth movements can have catastrophic results in such a huge installation. The Athabasca region also has a lot of ground water. Mount Athabasca is in a unique position where water from its peaks flows in three directions to three oceans. West flowing rivers flow into the Pacific Ocean, east flowing rivers flow into the Arctic Ocean and southeast flowing rivers flow into the Atlantic Ocean. This is also a natural hazard that the project has to deal with. The following table presents the type of hazards, the probability of the hazard happening and the impact the hazard actually occurring would cause.
Some risks can be avoided right from the word go. If the plant is performing activities that do not form part of its core business, the risk can be eliminated by avoiding taking part in these activities. If it is part of the business, ways that are less risky should be considered. This helps the company to avoid losses associated with it (Ritchie, 2009).
If a risk is low, it can be considered to be a business cost. Business by its nature is risky and an investor should know the risks they can take and those which to avoid. Low risks are usually accepted as part of business. Where a company has accepted a risk as a business cost, it should have some form of plan to recover if the risk actually happens (Schneid & Collins, 2001).
Transference involves transferring any losses to a third party. This is usually done by taking out insurance policies. Risk can also be transferred by using third parties. For example, Shell is a petroleum company. When it needs to build facilities, it contracts building firms whose core business is building. In this way, the risk is transferred to the building company contracted. Other services that can be contracted to third parties can include accounting, payroll services and cleaning services (Skinner & Mersham, 2002).
A control is a procedure used to either prevent a risk from occurring or detect a risk after it has occurred. A control can be use to manage the risk after it has already occurred. Controls are usually applied to risks that have been identified as part of the core business of the firm. For example in oil drilling, the chances of oil spills occurring are high but they are part of the core business. In order to totally eliminate the risk, the activity of oil drilling would have to stop. However, controls to detect and deal with oil spills are used to manage the risk. The procedures that detail the actions to be carried out, such as sealing the oil well are the control measures (Haddow, Bullock & Coppola, 2008).
The leading risk of this project is technological failure. This could result in the technology not working the way it is supposed to. If there are problems in capturing and storing carbon, the company can face huge losses. The total cost of the facility is estimated at $ 1.3 billion. The other big risk could be a structural failure on the buildings or installations made. Both these failures would not have a high risk when concerned with human life. However, the losses could be catastrophic for the business. Shell and the Canadian government have agreed to share the initial costs of the project as well as the technology. Failure on the technological part would leave shell facing huge financial losses.
For example, a failure in the 60 km underground pipeline that transports carbon dioxide from the upgrading plant to the final storage area could lead to huge losses. Estimated financial losses due to damage to this pipeline are estimated at $10 million. The company has set aside $ 5 million to cover for any such risk. At peak construction time, there will be at least 700 workers on site. The risk to any of the workers can be considered as low. The chances of small injuries is 20% that of serious injury is 5% and risk of death on site is 1%. Considering compensation for small injuries is $1000, serious injury is $10000 and death is $100000.
In case of emergency, fire-fighting equipment, personal protective equipment, earth moving equipment and medical equipment are available in sufficient quantities.
The Alberta railway line and Alberta regional airport are located in the vicinity of the facility and can be used for evacuation purposes in case of an emergency.
In any disaster management plan, communication is very important. An emergency operations centre will be established offsite to help in case of disaster happening. The operations centre will be able to provide staff on the ground dealing with the emergency with all the information they need. This facility will contain maps and plans of the site. This will be used to guide the people on the ground. The communication link from the emergency operation centre to the site will be a reliable link. Finally, the duties of each individual involved will be clear to make it easier to work under pressure. Communication with the outside world will also be handled from the emergency operations centre (Hagar, 2012).
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