The risk assessment process can be used as a strategic planning tool to manage environmental risks in the oil industry. Risk assessment allows for evaluation of clean up levels at contaminated sites based on reducing human health risk to acceptable levels while selecting the most cost effective remedial approach. The use of this approach gives consistency to the management of environmental risks and allows the risk manager to allocate resources so that they will have the greatest impact on reducing risk to human health. This paper discusses the risk assessment process and uses two examples to show how it can be applied to solve environmental problems in the oil field.
The oil industry has recognized the management of risks since its inception. Every capital venture from the purchase of leases to deciding where to drill has an associated risk. These risks are handled by balancing the level of risk with an expected cost and benefit. Historically, companies that have managed their risks have prospered. Over the past several years the oil industry has had to add an environmental risk component to the costs of doing business. To effectively manage environmental risks requires a strategy that is both in compliance with regulations and cost effective. Incorporating risk assessment in the strategic planning process promises to allow for better management of environmental problems in a consistent manner that is cost effective while reducing environmental risks to acceptable levels.
The risk assessment process has been used at agencies such as the Food and Drug Administration, the Office of Safety Health Administration, and the Environmental Protection Agency (EPA) for establishing regulatory limits for hazardous substances in food, the work place, and the environment. Traditionally, risk assessment is human health based and depends upon scientifically generated data to substantiate its results which in turn can be used to back up regulations. The EPA's Risk Assessment Guide provides one such basis for performing environmental risk assessment calculations which is very formal and specific. Risk assessment has been widely used at the national and state level to establish environmental management and planning for a variety of industrial activities.