Accumulation risks – when a single event causes an exceptionally large group of related losses – such as the Tianjin Port explosions, are continuing to grow

Tianjin Explosion Highlights Growth of Accumulation Risks

Posted by Eric Haun
Monday, August 17, 2015

The recent catastrophe at the port of Tianjin in China resulted in the loss of more than 120 lives and many more people are still missing.  It is far too early to speculate on the cause (although it appears to be fire-caused explosions of accumulated chemicals/explosives), but the explosions left extensive physical damage as well as the appalling loss of life.
Accumulation risks – when a single event causes an exceptionally large group of related losses – such as this, are continuing to grow, according to the International Union of Marine Insurance (IUMI).

IUMI President, Dieter Berg said, “This extremely sad and regrettable incident demonstrates the persistent growth of accumulation of values in port and storage areas, particularly in highly industrialized regions. Recent examples include the floods in Thailand in 2011 and Hurricane Sandy on the East Coast of the United States in 2012 that caused the biggest marine cat loss ever.”

In the marine sector, the continuous growth of this type of large-scale risk is being driven by the trend for bigger containerships and the construction of extensive freight handling and storage facilities.

Berg continued, “Although we are focusing on losses caused by natural hazards such as flooding or hail, it is human error that is often to blame, particularly around industrial facilities. Manmade losses or damage caused by explosions are hard to model but they are comparable with acts of terrorism. To evaluate worst case scenarios we need to fully understand the value of the goods in the port and all potential exposures before we can calculate adequate premiums. This is becoming more of a challenge as these facilities continue to expand.”

Early reports from Lloyd’s Agency Network state that more than 10,000 motor vehicles were destroyed at Tianjin.

Nick Derrick, Chairman of IUMI’s Cargo Committee said, “With average retail values of $30,000 this could result in a loss of $300 million for vehicles alone. Container losses are likely to be spread among many marine cargo insurers but motor vehicle insurance is a specialist sector and so that market is likely to be hit hard.”

Coast Guard rescues disabled fishing boat 70 miles from Nantucket, Massachusetts

Coast Guard crews aboard cutters Escanaba and Hammerhead safely brought the disabled fishing vessel Challenge to shore Aug. 16, 2014. 

August 17th, 2015

 

BOSTON, MASS.

Coast Guard crews aboard the cutters Escanaba and Hammerhead brought a disabled fishing vessel safely to shore early Monday.

Watchstanders at the Coast Guard Sector Southeastern New England Command Center, in Woods Hole, Massachusetts, received a phone call from the captain of the vessel Challenger Sunday morning, stating a line had fouled their propeller, and they were disabled and adrift 70 miles southeast of Nantucket, Massachusetts.

Search and rescue coordinators from the Sector Southeastern New England command center diverted the Coast Guard Cutter Escanaba and Hammerhead to assist.

The crew of the Escanaba arrived on scene and took the vessel, loaded with 650 pounds of scallops, in a stern tow at 9:30 a.m., Sunday. Later, at about 1 p.m. the crew of the Hammerhead relieved the Escanaba and continued to bring the fishing vessel toward shore.

At around 7:30 a.m., Monday, the crew of the Hammerhead handed off tow to a commercial tow company and the Challenge was successfully brought to harbor in New Bedford, Massachusetts.

“We had a few different crews working together with the Challenge’s crew to complete two different towing evolutions,” said Petty Officer 1st Class Brian Richardson, the operations unit coordinator at Sector Southeastern New England. “Everyone worked very well together to get the crew and the catch back to port safely.”

Pipe insulator and staffing agency Rock Wool cited for exposing workers to amputation hazards in Houston. OSHA cites Rock Wool Manufacturing Co. and C & C Personnel LLC; fines total $85,950

Aug. 17, 2015

Pipe insulator and staffing agency Rock Wool cited for exposing workers to amputation hazards in Houston.
OSHA cites Rock Wool Manufacturing Co. and C & C Personnel LLC; fines total $85,950

Employers' names: Rock Wool Manufacturing Co. and C & C Personnel LLC in Houston, Texas

Citations issued: Aug. 17, 2015

Investigation findings: Rock Wool was cited for seven serious and two repeat violations for exposing workers to a variety of workplace hazards, chief among them struck by and amputation hazards* for failing to protect workers from dangerous machinery. C & C Personnel was cited for four serious violations including failing to establish an energy control program to disable potentially hazardous machinery. The U.S. Department of Labor's Occupational Safety and Health Administration initiated the March 2015 inspection after receiving a complaint. C & C Personnel LLC provided Rock Wood Manufacturing Co. with 53 temporary workers on a daily basis and Rock Wool supervised and assigned these workers their duties.

Proposed Penalties: Rock Wood Manufacturing Co. was fined $64,350, and C & C. Personnel LLC was fined $21,600.

Quote: "Any time a worker is exposed to machinery without proper guarding is one more time that worker is in jeopardy of losing a limb or even a life. Failing to adhere to this commonsense safety requirement will not be tolerated," said Joann Figueroa, OSHA's area director in the Houston North office. "It is the employer's responsibility to find and fix hazards in the workplace."

Link to the citations: http://www.osha.gov/ooc/citations/CandCPersonnelLLC_1047081.pdf*
http://www.osha.gov/ooc/citations/RockWoolManufacturing_1057336.pdf*
http://www.osha.gov/ooc/citations/RockWoolManufacturing_1047033.pdf*
http://www.osha.gov/ooc/citations/CandCPersonnelLLC_1064742.pdf*

Information: Rock Wool Manufacturing, headquartered in Leeds, Alabama, has facilities in Leeds and Houston; and C & C Personnel is headquartered in Texas. Both companies have 15 business days from receipt of its citations to comply, request an informal conference with OSHA's area director, or contest the citations and penalties before the independent Occupational Safety and Health Review Commission.

To ask questions; obtain compliance assistance; file a complaint or report amputations, eye loss, workplace hospitalizations, fatalities or situations posing imminent danger to workers, the public should call OSHA's toll-free hotline at 800-321-OSHA (6742) or the agency's Houston North office at 936-760-3800. For more information, visit http://www.osha.gov.

Explosions, fire at the DrillChem chemical plant near Houston, Texas

Posted 1:22 am, August 16, 2015, by CNN Wire

CONROE, TEXAS

A massive fire broke out Friday at a Texas chemical plant, producing numerous explosions and huge plumes of smoke.

Mike Legoudes, fire marshal for the city of Conroe, said it appears nobody was inside the DrillChem plant and that nobody was injured. Conroe is about 40 miles north of Houston.

DrillChem makes products for the oil and gas industry. Legoudes said hazmat crews didn’t find anything dangerous but are trying to contain runoff as a precautionary measure.

Legoudes said the fire department received the call at 4:45 p.m. CT and arrived a few minutes later to find two 10,000-square-foot buildings engulfed in flames. The last employee is thought to have left at 4 p.m., he said.

The cause of the fire has not been determined.

On Facebook, the Montgomery County Fire Marshal’s Office reported the explosions from what it characterized as a “multiple-alarm commercial fire.”

BSEE Approves Updated Permit for Exploration Activities in Arctic Waters Under Rigorous Safety Requirements

AUGUST 17, 2015

WASHINGTON, DC

After extensive review and under a robust array of safety requirements, Bureau of Safety and Environmental Enforcement (BSEE) Director Brian Salerno today announced that Shell has received approval of one Application for Permit to Modify (APM) to conduct exploratory drilling activities into potential oil-bearing zones offshore Alaska at one of the wells at the Burger Prospect, Burger J. The company remains limited to the top section of the Burger V well.

Shell submitted an APM on August 6 to modify the Burger J Application for Permit to Drill (APD), which previously restricted Shell from drilling into oil-bearing zones since a capping stack was not on hand and deployable within 24 hours, as required by BSEE. A capping stack is a critical piece of emergency response equipment designed to shut in a well in the unlikely event of a loss of well control. The capping stack, staged on the vessel M/V Fennica, is now in the region and capable of being deployed within 24 hours.

“Activities conducted offshore Alaska are being held to the highest safety, environmental protection, and emergency response standards,” said Salerno. “Now that the required well control system is in place and can be deployed, Shell will be allowed to explore into oil-bearing zones for Burger J. We will continue to monitor their work around the clock to ensure the utmost safety and environmental stewardship.”

Shell is still prohibited from simultaneous drilling at Burger J and V, in accordance with the approved APDs, which define limitations related to marine mammal protection consistent with requirements established by the U.S. Fish and Wildlife Service (USFWS). Consistent with regulatory requirements, a USFWS Letter of Authorization (LOA) issued on June 30 requires Shell to maintain a minimum spacing of 15 miles between active drill rigs during exploration activities to avoid significant effects on walruses in the region.

Under the LOA, Shell is also required to have trained wildlife observers on all drilling units and support vessels to minimize impacts to protected species. Shell must stay within explicitly outlined vessel operating speeds and report daily regarding all vessel transits.

To ensure compliance with this and other conditions, BSEE safety inspectors have been present on the drilling units Noble Discoverer and Transocean Polar Pioneer 24 hours a day, seven days a week to provide continuous oversight and monitoring of all approved activities. The inspectors are authorized to take immediate action to ensure compliance and safety, including cessation of all drilling activities, if necessary. BSEE experts have been engaged in thorough inspections of both drilling units and Shell’s response equipment.

The Burger Prospect is located in about 140 feet of water, 70 miles northwest of the village of Wainwright.

BSEE’s close oversight of drilling operations in the Chukchi Sea this year is consistent with its continuing efforts over the past five years to upgrade safety standards to improve the safety of offshore oil and gas development. In addition, building on the lessons learned from Shell’s 2012 drilling operations in the offshore Arctic and incorporating the recommendations of a Departmental review of those activities, the Bureau of Ocean Energy Management (BOEM) on May 11, 2015, provided conditional approval of Shell’s Exploration Plan, which established numerous additional stringent safety requirements: 

All phases of an offshore Arctic program – preparations, drilling, maritime and emergency response operations – must be integrated and subject to strong operator management and government oversight, as detailed in Shell’s Integrated Operations Plan;
A shortened drilling season to allow time for open-water emergency response and relief rig operations late in the drilling season before projected ice encroachment;
Capping stack must be pre-staged and available for use within 24 hours;
A tested subsea containment system must be deployable within eight days;
The capability to drill a same season relief well;
A robust suite of measures to avoid and minimize adverse impacts to marine mammals and their habitat, impacts to Native subsistence activities, and other environmental impacts; and

Drilling units and their supporting vessels must depart the Chukchi Sea at the conclusion of each exploration drilling season.

The Department has also published proposed regulations to ensure that future exploratory drilling activities on the U.S. Arctic Outer Continental Shelf are done safely and responsibly, subject to strong and proven operational standards and Shell’s Chukchi Sea operations are being held to many of standards in the proposed regulations.

The APM and decision letter can be found here.