Getting in the Ballpark

There exists a type of risk analysis that is even more preliminary than a rudimentary assessment. This might be termed more of a risk conceptualization rather than assessment and is based solely on basic deductive reasoning. Illustrated by an example, an analyst may posit that a pipeline’s future risks will mirror the losses shown by recent historical annual US gas transmission pipeline experience. He assumes that the subject pipeline ‘behaves’ as an average[1] US gas transmission pipeline. Under this assumption, he deduces that future risks on the subject pipeline are 1.2 significant leak/ruptures per 2,000 mile-years that generate $1,200/mile-year of losses. He scales these values to the length of his subject pipeline and uses results in decision-making.

A similar approach is the use of historical leak/break rates to predict future behavior of sections of distribution pipeline systems. With larger counts of leak/break events, these produce more statistically valid summaries and are sometimes used to understand system deterioration rates.

These generalized, statistical approaches obviously are limited, especially when applied to a particular pipeline segment (see numerous discussions later in this text regarding pitfalls associated with use of general statistics in this way). They do, however offer useful risk context, providing insights into behaviors of populations of components over long periods of time. In the absence of any other information, this approach provides estimates that may often be a close approximation—perhaps within an order of magnitude or so—of average future performance of many pipelines.

[1]     Actually, more of a ‘composite’ performance since the vast majority of miles of pipeline have incident rates and losses much lower than implied by an average