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The impact of Covid-19 on Process Industries

The priorities and short-term objectives of manufacturers around the world have significantly changed due to Covid-19.

Many governments have imposed lockdowns on their populations in a bid to prevent virus transmission and to try and ensure that health providers are not overrun with people requiring hospital admission.

The lockdown of people, restrictions on working and concerns regarding infection from Covid-19 have made it very challenging and even impossible for many large maintenance events to proceed as planned.

In the UK, the Centre for Economics and Business Research models indicate that the lockdown is currently reducing economic output by 31% ( 6th of April 2020). The lockdown is estimated to have reduced manufacturing production in the UK by 69% with an economic cost of over £500m per day Ref [1].

The demand for fuel has plummeted during the lockdown and the Petrol Retailers Association is indicating that many petrol stations will be forced to close due to a lack of sales [3].

The oil price has crashed from $65 per barrel in early January to $27 per barrel at the beginning of April and even into negative territory in the US. [2] UK energy demand was down 13% on 25th of March compared to comparable days [4]. The chemicals sector saw reductions in output in January and February largely due to a slowdown in China, and now this is affecting Europe and the US.

ABB Survey results regarding inspection, maintenance and shutdown postponement

In a recent webinar (1st of April 2020), ABB polled participants regarding the deferral of statutory equipment inspections or large maintenance events. 51% of companies were intending to defer individual inspections or a large maintenance event with a further 36% still deciding.

The biggest concern is that Covid-19 will cause an infection of plant personnel (37%) causing a lack of resources now or possibly later in the year (38%).

Most companies (91%) are therefore intending to postpone their shutdowns with 37% aiming for a deferral of 3 to 6 months, a further 29% going for 6 to 9 months and 26% for 9 to 12 months.

The biggest issue with delaying a shutdown is seen as deferring statutory inspections (58%), plant availability / reliability (22%) or plant HSE issues (14%).

Regulatory Position for Postponement – Pressure Systems

Many companies find themselves urgently needing to decide whether to postpone major maintenance interventions because of the various impacts of Covid-19. The consequences of postponement need careful review and planning.

For the UK, onshore operators, following the Pressure Systems Safety Regulations (PSSR) 2000, postponement of equipment inspection can be carried out (according to Reg 9(7)) subject to agreement between the ‘Competent Person’ and the ‘User’ if this does not give rise to danger; there is only one postponement made for any one examination; the enforcing authority is notified by the ‘User’ in writing before the due date.

The UK HSE (Regulator) position currently remains the same – there is no derogation – although the regulator understands the pressures on operators in the current situation.

Postponement of equipment inspection under Control of Major Accident Hazards Regulations (COMAH) 2015, is essentially the same as PSSR where “relevant good practices must be adopted as a minimum” except that there is no specific requirement for notification of the HSE.

For offshore installations the Hazardous Installations Directorate (HID) Inspection Guide Offshore – Inspection of Maintenance Management is useful and states: “If inspection of items cannot be completed, there should be an assessment of the risk this presents. Where the risk is acceptable a deferral may be possible.”

Two further useful points are:

• “Non-Safety Critical Equipment related inspections should have a level of risk assessment appropriate and proportionate to the likelihood and consequences of any failure.”
• “Risk assessment must also be in place for the cumulative effect of inability to achieve the inspection programme.”

Preparing a Technical Case for Inspection Postponement

A technical case for inspection needs to be prepared to demonstrate that the safety risks are low for the postponement period.

Consider the required postponement period, inspection history, maintenance and operating history and data availability.

Using the collected data, determine whether there has been any deterioration and whether this will remain within acceptable limits up to the next inspection.

Around 30% of postponements will require further mitigating actions such as additional inspection, operational monitoring, changes to the mode of operation, de-rating of equipment, restricted personnel access and contingency planning in case of failure.

It is likely that not all inspections can be postponed. Some items will be high risk or approaching end of life where a technical justification for deferral cannot be made.

For large numbers of items an approach based on criticality assessment can be used to focus resources more effectively on higher risk items.

ABB’s survey results indicated that most people are looking for guidance on legal compliance during the current Covid-19 pandemic (52%) with more clarity on how long this is going to last (24%).

ABB will attempt to bring any guidance from the HSE or other bodies to customers’ attention.

The uncertainty regarding how long the present pandemic will last, and if indeed it will return is unknown. It is certain that when Covid-19 does abate, it will have caused business and industry upheaval and the world will be a different place.

Authors:

Martin Brown, Principal Lead Consultant – Integrity Management, ABB
Andy Fisher, Inspection Consultant, ABB

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References:

[1] CEBR “As the UK remains in lockdown, Government may need to target more support at manufacturing sector” 6 April 2020. https://cebr.com/reports/as-the-uk-remains-in-lockdown-government-may-need-to-target-more-support-at-manufacturing-sector/

[2] BBC News “Coronavirus: Oil prices surge on hopes of a price war truce” 2 April 2020. https://www.bbc.co.uk/news/business-52115442 Data Source: Bloomberg 2 April 2020 09:30 GMT

[3] ITV Report 1 April 2020 at 12:03am “Petrol stations ‘will have to close due to impact of coronavirus’” https://www.itv.com/news/2020-04-01/petrol-stations-will-have-to-close-due-to-impact-of-covid-19/
[4] Energy Live News 3 April 2020 “Coronavirus lockdown ‘knocks electricity demand by 13%’” https://www.energylivenews.com/2020/04/03/coronavirus-lockdown-knocks-electricity-demand-by-13/

Please contact Alan D’Ambrogio alan.dambrogio@gb.abb.com

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