Risk can also be defined as the product of two factors: the likelihood of an event, and its consequences.
Risk = Likelihood x Consequences
However, if the likelihood (chance) of occurrence is assessed as very low, the risk of a high consequence event will be obscured. There may, in fact, be no distinctive separation between low likelihood / high consequence events and high likelihood / low consequence events. This can be seen in Risk Matrices which have been widely used to provide a semi-quantitative view of likelihood and consequence.
The figure below presents an example risk matrix from a report relating to the Porthos CO2 Storage Project in Offshore Netherlands (Neele et al. 2019). The lowermost left cell, A-5, is defined as having a very low chance of a very large amount of CO2 migrating out of the reservoir. This cell is assigned a medium risk level (colored orange).
Similarly, the uppermost right cell, E1, is assigned a medium risk level. For this cell, there is a very high chance that a negligible amount of CO2 will migrate out of the reservoir. Does it seem reasonable that both of these scenarios pose a medium risk to the project? Even though it’s a low chance, the impact of a large leak will be much more damaging to the project than an almost certain leak of negligible consequence.
Note in the Figure that the corresponding ‘Monitoring Necessity’ and ‘Risk Reduction’ actions for these two scenarios are set to ALARP (As Low As Reasonably Practicable). This is also problematic—it’s much more important to collect data that could herald the approach of a low chance, high impact event than it is to detect high chance, low impact events.
Given the ambiguity of the Risk Matrices, we recommend evaluating the chance of an event separately from its consequences or impact, and will develop this concept in future posts.
Reference: Neele, F., Wildenborg, T., Geel, K., Loeve, D., Peters, L., Kahrobaei, S., Candela, T., Koenen, M., Hopmans, P., van der Valk, K., Orlic, B., Vandeweijer, V. 2019. TNO 2019 R11635 CO2 storage feasibility in the P18-2 depleted gas field.