CSB: Offshore regulatory reforms since Macondo accident fall short

Offshore oil and gas regulatory changes since the 2010 Macondo deepwater oil well accident and crude oil spill do not do enough to place the onus on industry to reduce risk, nor sufficiently empower the federal regulator to proactively oversee industry’s efforts to prevent a similar disaster, the US Chemical Safety Board said in a draft report.

US offshore oil and gas regulations have been moving toward a performance-based approach, but the US Bureau of Safety and Environmental Enforcement needs to pursue key regulatory attributes for the changes to be effective, CSB Chair Vanessa Allen Sutherland said as the independent federal chemical, refining, and industrial accidents investigation board released Volumes 3 and 4 of its Macondo report on Apr. 13.

“These include an adaptable oversight approach that continuously strives to reduce risk, proactive tools to evaluate and monitor safety performance, and meaningful worker participation. Successful safety and risk management will take a tripartite effort by industry, BSEE, and the workforce,” she continued. “Ultimately, this will require a culture shift for everyone.”

The Macondo deepwater well blew out and exploded on Apr. 20, 2010, killing 11 and destroying the Deepwater Horizon semisubmersible rig which sank and set off a 5 million bbl spill into the Gulf of Mexico that took 87 days to cap and several more months to clean up.

CSB investigators called for federal regulators, offshore well operators, drilling contractors, and service and supply companies to better manage drilling equipment in their initial report on the accident (OGJ Online, June 5, 2014). They identified a type of pipe buckling they called effective compression which they said could compromise proper functioning of other blowout preventers being used worldwide.

The board issued its latest report the day before the US Department of the Interior and BSEE announced its long-awaited final offshore oil and gas well control rule. It also came about a month after a Government Accountability Office investigation concluded that BSEE’s ongoing efforts to upgrade federal offshore oil and gas regulatory enforcement have been compromised by limited progress in improving its investigation capabilities (OGJ Online, Mar. 16, 2016).

Post-Macondo reorganization

BSEE was one of three new agencies the US Department of the Interior formed in the months after the Macondo accident and spill as then-Secretary Ken Salazar determined that the US Minerals Management Service, which was supposed to manage US Outer Continental Shelf activity and resources, was ineffective because it had too many contradictory responsibilities.

OCS royalty and revenue management moved into the new Office of Natural Resources Revenue. The Bureau of Ocean Energy Management was established to handle offshore oil, gas, and mineral leasing. BSEE took over offshore safety and environmental oversight.

BSEE quickly put additional regulations in place, but the CSB found in its latest report that they are lacking key concepts which are necessary to reduce risks more effectively. “[R]ecent changes to the U.S. offshore regulator’s organization and regulations, particularly the establishment of [Safety and Environmental Management Systems], do not go far enough to ensure effective industry management and control of major hazards or prevent possible future Macondo-type incidents,” the draft concluded.

In fact, said CSB’s investigators, many of the risk management policies drilling contractor Transocean Ltd. and well operator BP PLC had in place before the disaster would have satisfied the new post-Macondo federal requirements. A BSEE audit also found that some companies still place more emphasis on documenting regulatory compliance than actually managing risks, they noted.

“Zero incidents for a day, month, or even years do not preclude a company from facing a potentially catastrophic incident tomorrow,” CSB Lead Investigator and Human Factors Specialist Cheryl MacKenzie said. “Compliance isn’t a paper exercise and it isn’t a fixed target. Circumstances – the work environment, technology and the workforce – inevitably change. Companies’ risk reduction efforts must keep up, and BSSE must continually engage industry in proactive ways to improve offshore safety.”

BSEE’s new regulations established activity-based safety and environmental management system elements, but lacked risk reduction requirements and did not address the human and organizational factors that set the stage for accidents, CSB’s draft report concluded in its final volumes. They await a board vote and include proposed safety recommendations to BSEE, the American Petroleum Institute, the Ocean Energy Safety Institute, and the Sustainability Account Standards Board.

Contact Nick Snow at nicks@pennwell.com.

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