DOI provides details as it implements Obama's offshore orders

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, May 28 -- The US Department of the Interior began to implement new safety requirements for offshore oil and gas activities in response to President Barack Obama’s May 27 order. The rules center on two drilling process failures that may have led to the Apr. 20 blowout and semisubmersible rig explosion in the Gulf of Mexico: loss of well control and the blowout preventer’s failure.

“We must proceed with the utmost caution as we examine the many questions that the BP oil spill raises,” Interior Secretary Ken Salazar said as he issued orders that included a 6-month extension of a deepwater drilling moratorium, cancellation of two upcoming lease sales, and a delay in accepting Shell Offshore Inc.’s application to explore its Beaufort Sea and Chukchi Sea leases.

“Prudence dictates that we pause and examine our drilling systems thoroughly so that we can ensure that this type of disaster does not happen again,” Salazar said. In addition to issuing new regulations, the department plans to form working groups from academia, industry, and other technical experts and stakeholders to develop more recommendations within 6 months.

Recommendations in a 30-day safety report which Salazar submitted to Obama on May 27 include recertifying all BOPs for floating drilling operations, stronger well control practices and blowout prevention and intervention procedures, tough inspections for deepwater drilling operations, and expanded safety and training programs for rig workers.

In addition to the moratorium extension that coincides with the 6-month review by the independent commission Obama established to review the accident and subsequent oil spill’s causes and implications, Salazar said permitted wells being drilled in deep water (excluding the two emergency relief wells BP is drilling to combat the spill) will be required to stop drilling at the first safe point, then take steps to secure the well.

Additional safety checks will be imposed on ongoing deepwater drilling activities as they prepare to shut down operations, he indicated. DOI will issue notices to lessees and other documentation necessary to implement the moratorium, he said.

BOP orders
DOI will order reinspections of BOP equipment used on floating drillships operating on the US Outer Continental Shelf. Independent recertification will be required to ensure that the devices will operate as originally designed and that any designs or upgrades conducted after delivery have not compromised the BOP’s design or operation.

Operators also will need to provide independent verification that the recertified BOP will operate properly with the drilling rig equipment and is compatible with the specific well location, borehole design, and drilling plan. “Within a year, all operations will require two sets of blind shear rams on BOPs to prevent system failure during an emergency,” DOI said in its announcement.

It said it is strengthening well control design, construction, and flow intervention mechanisms and procedures to require expert review and verification of mechanical and physical flow barriers in the drill casing and BOP equipment to prevent blowouts. “Tougher requirements will improve the installation and cementing of drill casings in the well bore to increase safety,” it said.

DOI said some of Salazar’s recommendations can be carried out immediately through notices to lessees, which will advise leaseholders and operators of the requirements and provide guidance for their implementation. It said that it also would immediately evaluate and revise the manner in which the US Minerals Management Service conducts drilling inspections. A final rule covering operator safety and environmental management systems also will be issued, it said.

Testifying before the US House Natural Resources Committee on May 26, MMS Director S. Elizabeth Birnbaum, who resigned the next day, said that the agency was considering additional safety and environmental inspections. “Blowout preventer tests are conducted by the operator. We observe some tests, but we do not observe them all,” she said. “The operator is required to keep documentation of the numerous tests which occur on these rigs. If the operator is found to have lied on any them, it is subject to prosecution.” MMS also is reviewing standards for blowout response plans, along with all the other requirements for offshore oil and gas activity, she added.

Other measures
DOI said other measures that have been identified will need to be addressed through a formal rulemaking process. It plans to issue an interim final rule within 120 days for that purpose and provide a comment period to receive input which may lead to further adjustments of this final rule.

The department’s announcement said that the working groups will address additional issues associated with OCS drilling safety which involve “highly technical and complex evaluations that must be undertaken with due care.” try connections. They will present recommendations for more safety and environmental protection measures within 6 months, and new recommendations will be implemented through appropriate processes within another year. Recommendations from these groups may also inform the efforts of Obama’s independent commission, according to Interior.

Oil and gas industry task forces formed soon after the rig explosion and subsequent crude spill provided input for the 30-day report Salazar submitted to Obama, American Petroleum Institute Pres. Jack N. Gerard told the House Natural Resources Committee on May 27. The industry task forces’ work will complement DOI’s OCS Safety Oversight Board and lead to enhancements of existing API standards and possibly creation of new ones, he said in his written testimony.

“You are witnessing great cooperation from industry to find the cause and respond to the effects of this spill,” National Ocean Industries Association Pres. Randall B. Luthi said at the same hearing. “As more is learned concerning the cause of the accident, our members will assist in discussing short and long-term actions required to improve subsea BOP stack testing, reliability, and intervention.”

Solutions will require input from operators, exploration and service contractors, and equipment manufacturers, he continued. “We must examine the design and execution of various industry practices for cementing, casing, BOP configuration and well control,” he said in his written testimony.

Spill response team
Luthi said a common thread that has emerged from testimony and reports is that technology to locate and produce oil and gas offshore has advanced much more quickly than techniques to control and contain spills. “That is why NOIA is forming a response team of experts to make recommendations for robust and timely spill response and cleanup capabilities,” he said. “We will seek participation from our fellow trade associations, response organizations such as the Marine Spill Response Corp., as well as ecologists and scientists with expertise in oil, gas, and the environment.”

He said the panel would examine existing and cutting-edge techniques in subsea capture, surface containment, and dispersal; the need to reconstitute an industry-funded spill response research and development fund; and the need to harmonize currently differing spill response regulations between MMS and the US Coast Guard. “This team of experts will use its collective knowledge and experience to provide recommendations for the future,” said Luthi. “If there is a better mouse trap, or a better way to use the mouse trap, this team will find it.”

Safety already is a core value in US offshore oil and gas operations, according to Gerard. “Offshore workers are the first line of defense against oil spills and other accidents on rigs and platforms,” he said. “These hard-working, conscientious professionals are schooled in how to protect themselves and the environment. They actively observe each other’s behavior and remind their coworkers about safe operating practices. They work under a comprehensive suite of regulatory standards and frequent inspections that further reinforce their safety ethic.”

At the committee’s hearing on May 26, ranking minority member Doc Hastings (R-Wash.) noted that the nuclear power industry has policies where a single worker can stop an operation or activity if he or she considers it dangerous. Hastings then asked the two industry witnesses who were testifying if offshore oil and gas exploration and production operates under similar policies.

“Any employee, anywhere, at any level has the ability to raise their hand and try to get the operation stopped if they have safety concerns,” responded LaMar McKay, BP America Inc.’s chairman and president.

“We refer to this as stop-work authority,” added Steven L. Newman, president and chief executive of Transocean Ltd., which owned the rig that was destroyed on Apr. 20. “It is a fundamental component of our safety regime, and we recognize individuals who do this because we want our people to know they have that opportunity and obligation to stop operations if the rig they’re on is unsafe.”

Contact Nick Snow at nicks@pennwell.com.



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