Hydrocarbon accidents cost industry US$34bn

The 100 largest accidents in the hydrocarbon industry are estimated to have cost the industry more than US$34 billion, a new publication from insurance provider Marsh shows.

The data was published in The 100 Largest Losses 1974-2013 Large property damage losses in the Hydrocarbon Industry 23rd Edition. Marsh’s energy loss database holds almost 10,000 records of losses spanning a period of more than 40 years.

The total accumulated value of the 100 largest losses between 1974 and 2013 is estimated by Marsh at more than US$34 billion.

The losses are dominated by the upstream (34%) and refining sectors (29%), with the petrochemical sector accounting for nearly a quarter of losses (23%). Gas processing (9%) and distribution sectors (5%) accounted for more than one in six of all losses.

Marsh reported that eight new losses have entered the 100 largest losses list since 2011, including the Sendai refinery in Japan, the Geismar petrochemical facility in the US and La Plata refinery in Argentina.

The Piper Alpha Disaster in the North Sea tops the list with estimated losses of US$1.8 billion, followed by the Pasadena petrochemical plant explosion in Texas, which incurred losses of US$1.4 billion.

The hydrocarbon industry is playing a leading role at Hazards 24, a process safety event for the chemical and process industries. Speakers from the hydrocarbon sector include representatives from BP, Shell and Oil and Gas UK.

Hazards 24, which is organised by the Institution of Chemical Engineers (IChemE), will feature more than 60 technical presentations from process safety experts to share best practice and research.

“Marsh’s latest report is another stark reminder of the sheer scale of financial loss resulting from process safety incidents. In reality, the financial loss is even greater, with 10,000 incidents recorded by Marsh over the past 40 years,” Andrew Furlong, IChemE’s director of policy and communication, said.

“In 2014 there are sobering anniversaries of major disasters from recent decades, including Flixborough, Bhopal and Exxon Valdez.

“However, it is the elimination of loss of life and serious injury that should be the priority of everyone in the chemical and process industries. With over 100 recorded accidents so far in 2014 resulting in over 400 deaths and injuries, we all need to do more to improve safety for everyone involved in these hazardous but vital industries.”

Hazards 24 is being held from 7 to 9 May 2014 at Scotland’s Edinburgh International Conference Centre.