Risk Mgmt Unit 2: Cascading Risks: Workflows for Risks

Learn to identify and evaluate cascading risks and causal chains is the goal of this unit, with easy-to-use tools for creating flow charts and maps for analysis and decision-making.
• Determine the data you need to understand systemic risks
• Identify the relationships that lead to cascading risks
• Discuss ways do develop workflows of flows of risks
• Identify the locations most likely to trigger cascading failures
• Identify the types of risks associated with the failures
• Describe methods of analyzing cascading risks using several analytical techniques
• Explain how a Bayesian analysis can be effective for identifying relationships

Unit Presentation:
Video:  https://screencast-o-matic.com/watch/cqVZhl3Ozi  

PDF (contains links to readings, etc.) http://zenzebra.net/risk/risk-management-nash-pt2.pdf  

Scenario 2:  Cascading Risks:  Workflows for Risks
Joseph works for Wolf Midstream, which recently diversified into solar and wind energy to generate electricity for the grid in northeastern Texas and southwest Arkansas. 

Things have been going well.  However, the weather forecast says there is a high likelihood of a tornado outbreak near their solar panel farm and also near the Wolf wind farm. Wolf Midstream is connected with Lone Wolf Electric, which owns transmission lines into the small towns and rural homes.

The leadership of Wolf wants a report that provides 3 different scenarios for different levels of storms.  They want to know what all the potential impacts will be, and how they will affect each other.

Your Task: Help Joseph develop a map that shows how damage in one place will affect other places, resulting in causal chains, and cascading failures.

What will Joseph need?
 Which data does she need to collect?
 What kind of maps should she build?
 Use a diagram to show with arrows the cascading failures.
 Then, mark on a map where the problems will occur (after you’ve completed the diagrams).
 
You may wish to create 4 different maps:
 Stage 1: Initial impact
 Stage 2:  Secondary impact
 Stage 3:  What happens after Stage 2 failures occur
 Stage 4:  Final level of outcomes (long-term consequences).

Readings:
“Risk relationships and cascading relationships in critical infrastructures”
https://www.preventionweb.net/english/hyogo/gar/2015/en/bgdocs/McGee%20et%20al.,%202014.pdf

Destruction of infrastructure => disruption of supply chain => disruptions in global / local manufacturing (or mining, etc.)

Bottlenecks (constraints)
Strategic Supply Chain Mapping Approaches
https://pdfs.semanticscholar.org/6cd0/25fd30d1441935eb8bd6f1511cdc22cc0294.pdf

Mapping Supply Chain Constraints in LPG
Analysis of Liquified Petroleum Gas (LPG) Shortage in Ghana: Case of the Ashanti Region
https://www.researchgate.net/publication/267245130_Analysis_of_Liquefied_Petroleum_Gas_LPG_Shortage_in_Ghana_A_Case_of_the_Ashanti_Region

Illustration: 
https://www.researchgate.net/figure/Structure-and-mapping-of-LPG-supply-chain_fig3_267245130
Interventions
Bayesian networks: https://www.kdnuggets.com/software/bayesian.html
Bayesian Network Tools in Java: http://bnj.sourceforge.net/

Getting started: https://www.loginworks.com/blogs/how-to-perform-a-risk-assessment-with-data-analytics/

Texas AM Texarkana TAMUT MBA in Energy Leadership: Click link to apply - more information

For more information about the courses (and this full course), please contact me. 

Risk Mgmt Unit 1: Identifying and Quantifying Risks in the Energy Industry Using Heat Maps

Upon successful completion of this unit, learners will be able to identify and define risks in the energy industry (petroleum, natural gas, alternative), and construct risk heat maps for analysis, strategic planning and decision-making.
 
Unit Presentation: 

Pdf:  (contains links to readings):  http://zenzebra.net/risk/risk-management-nash-pt1.pdf

https://screencast-o-matic.com/watch/cqVZh33OzE

Video: https://screencast-o-matic.com/watch/cqVZh33OzE

Activity:
Scenario 1:  The Real Risks:  Identifying and Quantifying Using Heat Maps

Mark, Tamara, and Talib have put together a small company, Invictus Energy, with the goal of buying two or three small mature fields that also has a pipeline and gas gathering system. 

 Their goal is to revitalize the fields, renegotiate contracts, and then sell the fields and the gas gathering system and pipelines. They have obtained private equity financing, but are a bit alarmed at how much personal "skin in the game" they have to put up.

They are required to put in their own savings and assets, which makes them very nervous. But, they believe they can boost the production and recoverable reserves by 50%.  They are worried because the pumps are old, and the pipeline and gas gathering systems have not had any corrosion control or maintenance in many years.

Your Task:  Help Mark, Tamara, and Talib identify and rank the risks. Then, help them create a heat map so they can make sound financial decisions.
 --What are the kinds of risks that Invictus Energy will face?
 --What is the probability and potential impact of each?
 --What does a risk heat map look like for Invictus?
 --What are 3 or 4 decisions that the heat map can help with?
 
Readings:

Unit Presentation: http://zenzebra.net/risk/risk-management-nash-pt1.pdf

Heat Maps – where how to build them
 https://riskmanagementguru.com/create-risk-heatmap-excel-part-1.html/ 
https://riskmanagementguru.com/create-risk-heatmap-excel-part-2.html/ 

Example: Upstream oil and gas exploration and development
 Geological Risk (model, quality of information, imaging)
 Legal risk (title, etc.)
 Analytics risk (model, organization of information)
 Data Acquisition Risk
 Safety risk
 Drilling Risk (out of zone)
 Hydraulic fracturing risk
 Completion Risk 

Other examples:  Solar and wind energy generation and distribution.

Texas A&M Texarkana MBA in Energy Leadership: Click link to apply - more information

For more information about the courses (and this full course), please contact me.