TABLE OF CONTENTS Once a risk assessment has been completed and the results analyzed (see Chapter 8), the natural next step is risk management: What, if anything, should be done about this risk picture that has now been painted? This chapter explores some techniques and issues regarding the management of pipeline risks.
Risk management implies the need for judgment of risk levels, perhaps by the establishment of acceptable or tolerable risk levels. This is an enormously complex issue. This chapter discusses but will not resolve nor even do justice to the many high-quality books and countless articles written on the subject. Nor will the following paragraphs fully explore the many and often subtle socioeconomic, political, and philosophical aspects of decisions regarding risks. Rather, the intention here is to equip the practicing pipeline risk manager with concepts that will help him better understand risk issues and interact more effectively with risk managers from other industries. Many challenging questions are implied in risk management:
Where and when should resources be applied?
How much urgency should be attached to any specific risk mitigation?
Should only the worst segments be addressed first?
Should resources be diverted from less risky segments in order to better mitigate risks in higher risk areas?
How much will risk change if we do nothing differently?
It must be recognized that a finite amount of resources can be spent on pipeline risk reduction. Beyond some point, expenditures no longer make sense from a business or...
