Strategic and tactical planning in successful environmental project management

tools and case study


Successful project management of environmental projects for this case study focuses on the discharge of environmental liabilities at the lowest total cost. This case study involves an active petroleum refinery built in 1901 on the southwest side of Port Arthur, Texas (about 90 miles east of Houston). Chevron U.S.A. Inc. acquired the refinery in 1985, and subsequently sold the refinery in 1995. Chevron retained the corrective action responsibility for certain past-practice waste management activities in the inactive portions of the refinery. The facility remains an active refinery currently operated by Premcor.

Operations at the refinery have included crude oil refining, lubricant oil and chemical manufacturing, and the operation of a marketing distribution center. Products produced at the refinery historically include gasoline, kerosene, jet fuel, fuel oils, naphtha, and petrochemicals.

The Facility is a 3,800-acre restricted access industrial property with a 17-mile perimeter that is bordered partially by roadways, waterways, recreational and industrial properties, as well as wetland and wildlife management areas.

The refinery incorporates more than 90 environmental units to be addressed during investigation and corrective action closure activities. Several units are considered Priority Action Areas, areas requiring investigation or closure activities being expedited by Chevron; 65 Units are “nonpriority action areas” requiring less expedited response. Other units have been identified as having evidence of a potential release, of phase-separated hydrocarbons (PSH) where liquid hydrocarbons were found in wells or surface soils; and of pre-existing contamination (APCs) identified during cleanup of spills.

A summary of investigation activities conducted at the refinery have resulted in over 15,000 samples of environmental media being collected and analyzed from more than 2,400 borings and 900 monitor wells to develop a complete characterization of the refinery. Potential sources of contamination include several million cubic yards of impacted material (sludge) currently contained in large and small earthen basins.

Overall Planning Process

The Chevron Environmental Project Development and Execution Process© (EPDEP) is a process designed to improve decision-making and execution of projects by fostering better planning, collaboration and communication. EPDEP helps to guide team efforts in selecting the right opportunities through improved decision-making along with improving the overall outcomes by excelling in the execution of a business driven decision. Environmental projects involve a large effort in planning and investigation, not just the construction of facilities. The focus of EPDEP is to improve both the decision-making and execution of projects. If projects only perform one of these dimensions well, either decision-making or execution, the project is less likely to provide a successful business outcome. However, if a planning process is followed well, then execution with excellence and the probability of business success increases dramatically.

In its simplest form, EPDEP is a set of principles that will make a project more efficient. The EPDEP principles are:

•   Focus on key value drivers for the opportunity

•   Use of integrated multifunctional teams

•   Effective input, communication and alignment between teams, decision makers and stakeholders

•   Decision driven, not activity driven—do the work necessary to support the next decision

•   Consistent use of best practices and tools (e.g., Decision Analysis, Benchmarking, Value Engineering).

In addition to these principles, the most common depiction of EPDEP is seen in a six-phase process: Phase A—Identify and Assess Opportunities (strategic planning), Phase B—Site Assessment, Phase C—Generate and Select Alternative(s), Phase D—Develop Preferred Alternative (corrective action design), Phase E—Execute (construction), and Phase F—Operate, Monitor and Evaluate.

The objectives of the six phases are as follows:

Phase A—Identify and Assess Opportunities—Clearly form the goal and objectives to be pursued and ensure alignment with business objectives. Perform a preliminary assessment of uncertainties, associated risks and potential costs.

Exhibit 1. Risk Drivers

Risk Drivers

Phase B—Site Assessment—Collect and assess environmental data to meet project objectives with regulatory and cost considerations.

Phase C—Generate and Select Alternative(s)—Generate alternatives and reduce the uncertainties of each alternative. Develop a value for selected alternatives and select the preferred alternative(s).

Phase D—Develop Preferred Alternative—Fully define the scope of the alternative(s) being pursued and develop detailed execution plans and concept designs. Refine cost estimates and economic analysis to meet funding requirements.

Phase E—Execute—Conduct final design and execution plans. Implement execution plans through corrective action construction. Collect, analyze, and share lesson learned.

Phase F—Operate, Monitor and Evaluate—Monitor performance to ensure project objectives are being met. Benchmark performance. Share results and lessons learned. Continue performance assessment during short and long-term operations and identify other opportunities.

This process is also referred to a phase-gated process since each decision is a “gate” that the team must pass through. The project management team act as gatekeepers to see that the project is ready to move to the next phase. As such, at each decision address a “Stop, Hold, Recycle” question. These are the options, other than to proceed with the project that the project management team can consider. Stop represents halting work because the project is no longer viable; Recycle is to do additional work in the current or a proceeding phase; and Hold is a temporary halt.

Site Strategic Planning

The site strategic plan should provide a concise, quantified overview of exposure for the owner of environmental liability at the site. It presents a compelling end state vision for the site, and provides a risk-based, quantitative rationale for the preferred strategic solution.

Exposure may be characterized by understanding the conceptual site model and the risks that drive the need for management and discharge of environmental liability.

An End State Vision may then be developed to focus on the condition of the site when the environmental liability for the site is discharged. Typically environmental projects are very dynamic, primarily due to the involvement of many stakeholders. Our project needed revisions to plans at all stages of the planning process from the strategic objectives through project execution plans.

Once the starting points (point A) and the final goals (point B) are appropriately defined, we can then devise a path forward for getting from point A to point B. We begin the planning process at a high level (strategic objectives), and then proceed with sequential development of an Implementation Plan for the entire project, tactical plans to align multiple projects, through to detailed project plans in terms of scope, schedule, and budget.

Conceptual Site Model

The conceptual site model provides a multimedia description of both the surface and subsurface aspects of the site. It is used to develop a risk profile that identifies media that may be impacted based the nature and location of sources, the potential mechanisms for transport of contaminants and the potential pathways for exposure to human and ecological receptors. The model provides a pictorial representation of the site and assists in the development of sampling plans.

As an example, the following text provides a summary of the conceptual site model for the Port Arthur facility:

The Port Arthur facility lies in the SE Texas Coastal Plain with a portion lying within the 100-year Floodplain. The land surface gradient is to the south, toward the Gulf of Mexico, and is less than 1 foot per mile. The subsurface 20ft below grade consists of a hard clay (Beaumont Clay). Above the Beaumont Clay, the low-energy depositional environment has formed a soft clay-dominated matrix.

The groundwater table is found within 10ft below-ground surface in saturated clay with silty and sandy layers. Permeabilities are low resulting in limited discharges to surface water bodies and groundwater flow is controlled by regional drainages between <1 and 24 feet per year.

Rainfall is high (typically 60 inches per year) such that precipitation recharge is dominant. Rain falling on nearly 90% of the Facility is collected, treated, and discharged to the Joint Outfall Canal through the stormwater management system operated by Premcor. However, local drinking and industrial use water are produced from surface water intake locations, which are more than three miles upstream to the north of the Facility.

Land for expansion of the industrial facility was developed through placement of “fill” materials that now cover more than 60% of the refinery. Drainage channels were modified during this development—this involved filling of former channels (sometimes with waste materials), and cutting of new channels, which sometimes traversed former waste placement areas. In addition, large areas in the southern part of the facility were used for placement of dredge spoil.

The refinery is protected from a storm surge by a Hurricane Protection Levee that surrounds a large part of the operating area of the facility on the western, southern, and eastern boundaries.

Typically wastes were managed in above grade landfills, former drainage channels, or dedicated excavations. Migration of constituents from placed wastes into soil and groundwater has been very limited.

Risk Drivers

Environmental projects are initiated to mitigate existing risks and/or the threat of future risks. In general, environmental projects do not make money, they spend it. So, the overall goal is to minimize the total cost associated with dealing with these existing and future risks.

The risks can take many different forms. They can be regulatory, site-specific, third-party liability, and “reputation” risk. Drivers and examples associated with these risks are presented in Exhibit 1.

At Port Arthur, the emphasis on the risk drivers has changed several times since the project began. This is further discussed in the section on Change Management.

End State Vision

The End State Vision represents a number of facets of the end state for a site. It includes a pictorial representation of the site that relates to future land utilization, and a complete description of land and assets ownership, including risk and operations responsibility

Our current End State Vision is that:

•   Port Arthur (Facility) will likely remain an operating industrial facility with petroleum refining and chemical processing as primary operations for the foreseeable future. Restricted access consistent with an operating industrial facility will be maintained and controlled.

•   There will be no complete risk pathways between refinery-waste impacted material and industrial worker receptors in the facility's industrial areas that are located within the hurricane protection levee.

•   There will be no complete risk pathways between refinery-waste impacted material and ecological receptors within the facility areas that are located outside of the hurricane protection levee.

•   In-situ containment of hydrocarbon-impacted material will be demonstrated in the subsurface media as appropriate.

•   Remedial operations will have been conducted with no safety recordables involving workers or the public, no unauthorized releases to the environment, and no failure to meet agency requirements.

•   All waste management units will be closed and all areas turned over to the property owner for any required post closure care.

•   Chevron is recognized and respected by stakeholders for meeting their obligations at the Facility.

It must be recognized that the End State Vision is likely to change based on tactical plan development, feedback from stakeholders, data collection and evaluation, and regulatory changes. For example, at Port Arthur, we developed an End State Vision, which changed once as the result of an independent review, twice based on feedback from the property owner, and thirdly, based on data collection, land use and ownership changes.

Change Management

Although change management is important in most projects, it is particularly important for environmental projects.

Initially, the Port Arthur program was regulatory driven since, when the Agreed Order became effective in 1997, Chevron was concerned with the potential threat of enforcement actions by both federal and state regulatory agencies and the costs associated with maintaining a remediation program on site for possibly several decades. Consequently, it was decided to expedite the remediation program and discharge environmental liabilities as soon as possible through the formation of Port Arthur Remediation Team (PART), a relatively large organization. Strategic objectives were developed with aggressive target completion dates and fiscal goals to drive behaviors of PART to expedite the remediation program. In addition, to make most efficient and effective use of PART while it exists, the schedule was developed to level project resources and designed for a gradual (i.e., noncyclic) decline in resource demand as the project approaches completion.

During 2000, results of interactions with our primary stakeholders indicated that that they were not aligned with an expedited remediation program and have the ability to prevent PART from attaining the current strategic objectives. This prompted PART to reevaluate the strategy using the decision risk analysis process that addressed the following issues:

•   Timing of potential corrective actions for the remaining priority units

•   Timing of potential corrective actions for the remaining non-priority (RFI) units

•   The required organizational structure to execute the work

•   Whether to conduct corrective actions under the 1993 Risk Reduction Rules or convert to the 1999 Texas Risk Reduction Program

•   Potential approaches for dealing with stakeholder issues.

Recent (2002) changes have the potential to influence the end state for the Port Arthur program yet again, which include:

•   A corporate focus the greatest value

•   Completion of projects that prior to corrective action exhibited unacceptable risk to human and/or ecological receptors or were perceived to

•   A demonstrated track record with the regulatory agencies that has mitigated the threat of some type of enforcement action

•   Lack of stakeholder alignment with an expedited remediation program

•   As the remediation program nears corrective action completion, complex issues arise around post closure care.

We are now revisiting the overall site strategy to identify and evaluate alternatives to expedite remediation through the completion of this program.

Strategic Objectives

In the meantime, we are still pursuing strategic objectives that were developed to expedite the remediation program in response to the potential threat of enforcement by federal and state agencies prior to the Agreed Order (AO). The current objectives, which were designed to make efficient use of the large PART organization and to level project resources, are as follows:

•   Expedite risk-based closure of all waste management units at the lowest total cost and turn over all areas to the property owner for any required post closure care in accordance with the sales agreement

•   Conduct remedial operations with no safety recordables involving workers or the public, no unauthorized releases to the environment, and no failure to meet agency requirements.

•   Comply with requirements of the Agreed Order and meet stakeholder needs.

Implementation Planning

Now that the End State Vision is identified, the decision-making process understood and the strategic plans developed, the planning to reach the strategic objectives can be conducted. The implementation plan is the tool used by the project management team to establish project priorities and track overall project performance. As with most projects, changes always occur during the life of a project. These changes are realized by:

•   New Information

•   Stakeholder(s) input

•   Change in Objectives

•   Outside influences (like weather during construction phases)

•   New Economic Constraints

•   New Schedule Constraints

•   Changes in Priorities

•   Changes in Resources.

The implementation plan is a tool to manage change. If a constraint or objective changes, the impact of this change on the total project can be defined and contingency plans can be developed to lessen the impact of the change.

Basically, the implementation plan is a resource-loaded schedule that is developed and baselined at the beginning of the project. The implementation plan for the Port Arthur Facility was developed based on the following inputs:

•   Environmental Regulatory Agreed Order

•   Identified Priority Project Units

•   Perimeter Project Units

•   Landowner Interface Issues

•   Regulatory Advocacy Team

•   Strategic Plans and Strategic Planning Team

•   Project Leadership Team

•   Cash Flow

•   Consistent with Decision-Making Process

•   Presumptive Corrective Action at all 90 project sites (units)

•   Assumed productivity

•   Assumed Stakeholder Review and Approval Timelines.

Each project, 90 in all, is loaded into the implementation plan with activities and milestones. Key regulatory milestones were frozen commitments in the plan and could not be changed. Resource loading was by total dollars, total dollars by project entity (client, design, construction), and by cost category (labor, expenses, materials, equipment, and subcontractors). The implementation plan could then be used as a resource-balancing tool as well as for tracking progress and forecasting. The baselined implementation plan was used for the tracking of progress by using percent complete statusing and the successful completion of project milestones. In addition, the plan can now be used to manage uncertainty, change and contingency. For example:

•   Uncertainty: The amount of material to treat in an environmental corrective action is usually very uncertain, even with substantial investigation to quantify the volume. Generally, the quantities increase, increasing the cost of the project. This increase cost impacts the available funds for other projects, and some projects must be slowed or deferred to not exceed annual budget commitments. The implementation plan is then used to shift planned and potential projects with the year to meet the objectives. This shift always impacts the out years of the overall project and forces other adjustments to be made to stay within the established budget, schedule and resource constraints.

•   Change: At the beginning of each year of work, a number of projects are planned to be started and completed. Stakeholder influence can change the mix of the projects in any given year. Typically, 60% of the scope is changed over the course of a year. Here again, the implementation plan is used to shift planned and potential projects to stay with the overall project constraints.

Exhibit 2. High-Level Tactics

High-Level Tactics

•   Contingency: Knowing that change and uncertainty are influencing elements of the overall project, the implementation plan can be used to conduct “what-if” scenarios. This contingency planning is essential to the overall success of the project and allows the program management team to anticipate changes and have solutions readily available when the changes occur. It also allows the team to bracket the expected range of impact over any given year with a set of estimated influences (uncertainty and stakeholder input).

Tactical Planning

To implement a program with an annual budget of approximately $50 million requires a large number of discrete projects that need to be linked and aligned with the overall strategic objectives. Alignment and cost effective implementation cannot be achieved by communication of high-level strategic objectives alone. It requires the development of consistent interpretations of the high level objectives by individuals who have institutional knowledge of the site and the project. We used several types of tactical plans:

•   High-level tactics that provide focus toward the end point of the project and the basis for metrics employed by upper management to assess the overall progress of the project

•   Facilitywide tactics for broad media or risk categories that were useful as a communication tool with the regulatory agencies and other stakeholders and provided a basis for consistency for the large number of projects

•   Project tactical plans that defined the overall goals for each project, in alignment with the high-level objectives, that essentially functioned as the Request for Proposal (RFP). Project teams produced a scope, schedule, and budget for funding approval in response to the tactical plan.

High-Level Tactics

The following high-level tactics were developed as the project began (see Exhibit 2). Note that we track progress toward these tactics at least every six months.

Facility-Wide Tactics

Groundwater: Although waste disposal practices have probably occurred over the entire life span of the facility, no significant, widespread dissolved groundwater impact has been observed, even in those areas with large oily waste disposal pits. Also, only minimal exceedences of dissolved phase constituents have been observed for groundwater in direct contact with PSH and oily wastes. Further, step-out groundwater samples obtained as close as 50ft from locations with detectable levels of hazardous constituents have typically been at or below detection.

Phase-Separated Hydrocarbons (PSH): The source of PSH to wells, surface water bodies, and seeps appear to predominantly be secondary porosity features (i.e., cracks or voids created by clay desiccation or buried vegetation and debris). Much of the PSH likely originated from oily wastes historically brought to the site in the form of dredge spoils and made land for facility expansion. There is not a typical, facilitywide PSH plume similar to that observed beneath many other oil refineries, but rather appears to be a result of the groundwater table being located so close to the ground surface combined with the low permeability of the shallow subsurface. The observed occurrences of PSH appear to be limited in aerial extent and more related to individual waste disposal areas. This is supported by the observed limited occurrence of dissolved-phase hydrocarbon constituents in groundwater.

Human Health Risk Assessment (HHRA): The HHRA strategy is to:

•   Limit the scope of corrective action based on the need to control human health exposure to acceptable levels

•   Comply with the requirements of the Agreed Order and the Texas Risk Reduction Standards (1993)

•   Maximize the use of site-specific assumptions for exposure based on continued industrial use of the property

•   Exclude areas from HHRA if they are currently active units (e.g., conveyance ditches) or regulated under the federal Clean Water Act.

Ecological Risk Assessment (ERA): The ERA strategy is to:

•   Comply with the requirements of the Agreed Order and the recent guidance developed under the Texas Risk Reduction Program (1999)

•   Exclude areas from ERA if they are managed industrial areas, do not contain refinery-related materials, or are regulated under the federal Clean Water Act

•   Include Ecological Services Analysis with offsite restoration as an alternative to mitigate unacceptable ecological risk.

Project Tactical Plans

The process that we developed at Port Arthur utilizes tactical plans that are prepared at a level of detail sufficient to ensure alignment with the strategic objectives and facilitate development of a scope, schedule, and budget to implement the work. However, the tactical plan is designed to provide maximum flexibility to the project manager to encourage ownership in the project and foster creative solutions.

The tactical plan is typically prepared by onsite technical program staff with extensive institutional knowledge of the site. External resources are acquired for niche expertise as needed. The plan provides key project direction, but can be updated by the project team. Stakeholder input and new information often leads to such changes. Milestones are selected to provide for communication between the program staff and the project team to ensure continued alignment and opportunity for feedback.

The project tactical plan, a document of 10 pages or less, typically includes clear and concise direction regarding the following elements:

•   Objectives of the project

•   Background information

•   Program strategy alignment

•   Drivers for action

•   Key stakeholders

•   Assumptions

•   Uncertainties and countermeasures

•   Critical success factors

•   Tactics (as developed) with recommended approach

•   Milestone schedule

•   Budget

•   Potential breakthrough opportunities.

Case Study Successes

Initial strategic planning for the Port Arthur Remediation Project in 1995 resulted in a plan to complete the project in 40 years for well over a billion dollars. Using the strategic, tactical and implementation tools described in this paper the plan has resulted in the following successes:

•   A 75% reduction in total project schedule

•   Managed about 50 to 60 projects each year with an individual project cost of from about $200,000 to just over $10 MM

•   Managed change where 60% of the project scope changed over each year of the project

•   Meet annual project budget within 2% of January commitments

•   Met all environmental regulatory milestones

•   Met 95% of all project milestones

•   Reduced the cost of corrective action by 65% over the last seven years.

The safety strategies and implementation have resulted in no lost time accidents in seven years of construction and with a recordable incident rate of 0.34.


In summary, the Port Arthur Remediation Team has effectively used the tools: strategic planning, implementation planning, and tactical planning to manage a complex project with many uncertainties and stakeholder influences. These tools have assisted the team to reduce cost, reduce schedule and accomplish a large amount of corrective action investigation and remedial construction work to meet the project strategic and business objectives.

Proceedings of the Project Management Institute Annual Seminars & Symposium
October 3–10, 2002 · San Antonio, Texas, USA



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