Deloitte and NASA Bring Space-Age Risk Management to Oil and Gas Industry

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Jun 27, 2013, 04:00 ET

HOUSTON, June 27, 2013 /PRNewswire/ -- In a move designed to bring advanced risk-management capabilities to America's energy industry, the Deloitte Center for Energy Solutions and the NASA Johnson Space Center have entered into a strategic alliance to offer services to oil and gas companies.

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These services, which include several operational risk-management offerings, are aimed at companies looking to minimize the risk of catastrophic failures – the kinds of dramatic mishaps that, while highly unlikely, can occur in remote and harsh environments.

"Activities like deep-water drilling, undersea production and pipeline operations all face the same kind of 'black swan' events that pose a threat to space exploration," said David Traylor, a principal at Deloitte & Touche LLP. "Our strategic alliance with NASA will integrate the space agency's 50-plus years of experience preventing and recovering from catastrophic accidents in human space flight into Deloitte's advanced-risk strategies – applying state-of-science capabilities to oil and gas companies back here on earth.

"Ultimately, proactively identifying and mitigating low-probability yet high-impact events can save lives, resources, money, reputation and environmental disruption," he added.

As part of the alliance, Deloitte and NASA will jointly offer a range of services in the quickly evolving risk-sciences arena, such as risk modeling and simulation, to help oil and gas companies eliminate blind spots in their decision making.

Such services apply sophisticated risk-modeling and simulation tools and techniques like Bayesian networks and agent-based modeling to reduce uncertainties in engineering and operations at oil and gas companies – in much the same way NASA has done with its space program.

As part of NASA's 135th and final space shuttle mission, for example, it used risk-modeling and simulation techniques to evaluate the potential risk scenarios of using a Soyuz spacecraft to rescue a stranded crew from the International Space Station – with no backup shuttle capability. This process identified risks linked with the Russian vehicle and helped drive a decision to extend crew time on the space station.

Deloitte and NASA also expect that oil and gas companies will find Deloitte's risk-sensing services valuable in emerging risk identification – a set of complex tools and techniques, like precursor analysis and event-occurrence trending, to highlight changes in risk likelihood.

NASA used these techniques when it was having problems with the space shuttle's attitude-control thrusters, which could limit the ability to control the position of the shuttle while in orbit. Because the thrusters could not be tested on the ground, precursor analysis was used to determine leading indicators and surrounding events preceding thruster usage – allowing the space agency to resolve the problems before future missions.

Deloitte and NASA's offerings will also include what Traylor calls "dynamically improving risk-management techniques," such as artificial-intelligence tools applied to remote decision-support systems.

In addition, Deloitte and NASA will offer services aimed at helping oil and gas companies measure and monitor the effectiveness of their risk culture among their employees and contractors – enabling them to detect whether their work environments and processes are increasing the likelihood of a risk occurring.

NASA regularly measures its own safety culture using these same techniques, including assessment reviews to identify warning signs of "cultural deterioration" that could lead to poor risk decisions.

"NASA is a leader in applying risk strategy to highly complex systems that operate in extremely demanding environments, while Deloitte is a leader in providing valuable professional services to oil and gas companies," said veteran astronaut William "Bill" McArthur, Jr., director of Safety and Mission Assurance at the Johnson Space Center.

"Energy companies facing catastrophic consequences from low probability risks will now have a range of tools and techniques to minimize the probability of these risks and improve their overall safety culture," he added.

NASA also feels that its strategic alliance with Deloitte has the potential for expanding beyond the oil and gas industry – potentially advancing NASA's mission to commercialize its scientific capabilities.

"Deloitte's risk intelligence strength in industries like healthcare and government align with our own Directorates at the Johnson Space Center and represent a fertile opportunity to bring new analytics and modeling services to additional industries," said McArthur.

He also stressed that one of NASA's core values is safety, which serves as a cornerstone of mission success. NASA's collaboration with Deloitte will enforce constant attention to safety as a cornerstone upon which NASA operates. Through the collaboration, NASA will gain knowledge to help prepare for future missions and to enhance current safety and risk mitigation technologies to address the dynamic, harsh, and remote requirements of emergent programs.

About the Johnson Space Center

The Johnson Space Center is home to the International Space Station Program and the primary training facility for NASA's astronaut corps. For more information, visit: www.nasa.gov.

About the Deloitte Center for Energy Solutions

The Deloitte Center for Energy Solutions (the Center) provides a forum for innovation, thought leadership, groundbreaking research, and industry collaboration to help companies solve the most complex energy challenges. Through the Center, Deloitte's Energy & Resources group leads the debate on critical topics on the minds of executives – from the impact of legislative and regulatory policy, to operational efficiency, to sustainable and profitable growth. The Center provides comprehensive solutions through a global network of specialists and thought leaders in Deloitte Touche Tohmatsu Limited member firms. With locations in Houston and Washington, D.C., the Center offers interaction through seminars, roundtables and other forms of engagement, where established and growing companies can come together to learn, discuss and debate. www.deloitte.com/energysolutions.

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

SOURCE Deloitte