Leak detection systems seem to be viewed by some pipeline companies as a necessary evil. Companies look at how much it will cost to install and operate a leak detection system not at the longer term benefits.
Such systems come in many flavors – with a wide performance range: some systems can detect small leaks quickly while other systems cannot detect small leaks at all and even for larger leaks these systems will take a while to alarm. While most pipeline companies take leak detection performance into account when selecting a system, few companies seem to translate the additional benefits gained by installing a high performance leak detection system into financial benefits.
Recently a customer decided to purchase a very basic leak detection system. The detection capabilities of this system are likely very limited (long detection time, not very sensitive and not much in terms of leak location capabilities). The decision makers seem willing to take a higher risk on not detecting a leak for the purpose of saving money up front. However, when the next leak occurs, the added cost resulting from the relative poor performance of a weaker leak detection system will far outweigh the money saved.
It is possible to calculate the return on investment (ROI) from a leak detection system. Obviously some assumptions must be made in order to make these calculations – the most unknown being: when will I experience my next leak? Then there is the question: how much will a leak detection system actually save my company in terms of avoided lost product, avoiding/reducing fines and clean up costs, reduced damage to public image, etc.
The question is: is ROI considered when selecting a leak detection system and if not why? Is it because we all like to think that leaks won’t happen – therefore it is purely an expense with no financial return? Statistics tell us that it is not that unlikely that a randomly selected pipeline will experience a leak within the next 5 years – whether caused by internal factors (corrosion etc.) or external factors (3rd party interference). For most pipeline companies, it is just a matter of time, and the sooner an incident happens, the higher the ROI…
Comments anyone?
Morten Kristiansen
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