National Academies Press: OpenBook
« Previous: 3 Available Empirical Indicators of Offshore Industry Risk Profile
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

4

A Model for Assessing Industry Risk Profile

INTRODUCTION

This chapter responds to the committee’s Statement of Task item that asks it to “Define the current profile of systemic risks of offshore oil and gas operations in the Gulf of Mexico that could lead to disasters.” As described in Chapters 2 and 3, both industry and regulators have made substantial improvements in the management of systemic risk, but some of these improvements are not yet mature, particularly regarding the development, sharing, aggregation, and tracking of industry-wide data that could be precursor indicators of a major incident. As such, the offshore industry, and therefore the committee, lacks specific empirical data or metrics that would directly inform a quantitative estimate of the industry-wide risk profile. In addition, representatives of major U.S. associations that often speak on behalf of offshore oil and gas exploration and production companies declined invitations to meet with the committee during the study. In the absence of such information, the committee relied on its collective judgment, decades of offshore operational management experience of three of its members, and available relevant quantitative and qualitative information and material presented in Chapters 2 and 3, to estimate the current U.S. offshore oil and gas industry systemic risk profile and its improvement over time.

The committee arrives at its judgments with the understanding that its estimates of systemic risk can be improved through the availability of better information. Future work in this area may therefore reflect different estimates of the industry’s risk profile based on additional input and data availability.

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

PROCESS FOR ESTIMATING OFFSHORE INDUSTRY RISK PROFILE

The committee developed a multipart strategy to develop an estimate of the offshore industry risk profile. In Chapter 1, the committee provided a definition of systemic risk as “The overall risk of catastrophic failure associated with the entire system. Thus, it includes design, operations, and regulation throughout the life cycle of offshore oil and gas facilities.” Given the lack of available data to create a quantitative approach to estimating systemic risk, the committee developed a framework that distinguishes 15 specific risk elements, defined in the next section, in terms of the maturity of the control measures being used to manage them. Improvement in each of these elements therefore will result in an overall improvement in the systemic risk profile for individual companies or the industry as a whole.

The evaluation of the risk elements used in this report is a subjective process. To provide a framework that leads to consistency in the evaluation of the different risk elements, we use a maturity model framework. Maturity is not a regulatory compliance measure, nor is it a relative grade against an “acceptable” level of systemic risk. Rather, the maturity model approach provides a description of the stages of maturity of the industry in terms of the implementation of controls to reduce the overall systemic risk in Gulf of Mexico (GoM) oil and gas operations.

Using this concept of maturity, the committee evaluated offshore systemic risk management through five distinct and complementary lenses—culture, technology, human resources, barriers, and the regulatory environment—and assessed the level of maturity of systemic risk management associated with these five levels of risk control.

Based on the unique attributes of maturity as viewed through the five lenses, an overall assessment of the maturity of each of the risk elements was made that the committee believes describes the risk profile in offshore oil and gas operations today, and separately, the estimated risk profile at the time of the Macondo incident.

Risk Management Framework and Risk Elements

Based on the definitions expressed in Chapter 1, the development of the risk model and framework described in this section relied on the following principles:

  • The committee needed a framework that recognized that systemic risk includes the entire system of identifying hazards: designing, operating, and regulating the use of barriers to manage these hazards; and continually improving design and operations based on system feedback to minimize risk.
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
  • Systemic risk needed to be broken down into individual components that could be evaluated independently.
  • The number of individual components needed to be constrained to a manageable number while each should represent a unique aspect of the overall system.
  • The components, taken together, had to fully characterize the systemic risk in offshore energy operations.

The 15 discrete risk elements are shown in Figure 4-1 within the systems framework for which they were developed. The committee identified the framework by defining three broad systems for managing risk: People, Human-Systems Integration, and Systems.

The risk controls and risk elements within the larger People system specifically address the human side of offshore activities, the human systems, and how the people at all levels are organized, motivated, trained, and managed to effectively carry out their assigned work.

Human-Systems Integration, as a system, brings together those risk elements that describe how the physical systems offshore are designed with people in mind, and how the people interact with the physical systems.

Within the larger Systems category, the risk controls and risk elements focus on the physical systems and barriers themselves and how the offshore regulators verify the integrity of these physical systems and the people that operate and maintain them.

Image
FIGURE 4-1 Risk management framework.
NOTE: JSAs = job safety analyses; SEMS = safety and environmental management system.
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

Grouped under each of these risk controls are 15 risk elements, which are described individually in detail in the following subsection. Although these risk elements are meant to characterize the industry as a whole, and not merely its best or worst performers, the heterogeneity of the industry can make it challenging to develop any industry-wide assessment. The committee describes how it handled this heterogeneity in subsequent sections of this chapter.

Systems, Risk Controls, and Risk Elements

As shown in Figure 4-1 and described above, systemic risk was divided into three major systems: People, Human-Systems Integration, and Systems. These three systems were then divided into a total of five risk controls, and under these risk controls are the 15 risk elements. Within the People system are the two risk controls of a Culture That Supports Safety and Human Resources. Human-Systems Integration is itself the risk control. On the Systems side, there are two distinct risk controls: Hardware and Design, and Regulatory Management.

Maturity Models and Risk Evaluation

The committee considered the risk elements from five different perspectives that were viewed as critical to an assessment of the risk elements: Culture, Technology, Human Resources, Barriers, and Regulatory Environment. Criteria for evaluating the elements were developed based on maturity models, an example of which is described below. The maturity models were based on a series of attributes considered important for assessing industry maturity toward a goal of achieving, maintaining, and continually improving best practice in safety management and sharing of safety data and lessons learned. From all perspectives, the highest level of maturity goes beyond current best practice and in some cases reflects an aspirational goal for the industry. This is a goal that individual companies may achieve but which is much more challenging for most companies in the industry because of the emphasis in safety and environmental management systems (SEMS) on continuous improvement. Doing so is always raising the bar for best practice and there will always be a small number of companies on the leading edge of best practice. Maturity models are therefore not fixed for all time as there can be changes in technology that were not considered in a current model. As the assessed maturity level changes over time, it is important to understand the changes due to an evolving (ideally improving) industry versus changes reflecting a new view of what a mature industry should be.

Maturity models for organizations and industries are widely used to describe the pathway toward high levels of performance. They define the

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

levels in the journey of continual learning and improvement; thus, they are particularly useful for Safety Management, Process Safety, and Safety Culture, which are all continual learning and improvement processes. The journey begins with awareness, and the highest level is continual learning and improvement that includes sharing and engagement based on core values. The maturity levels are the steps in the learning process. The highest level of maturity, if achieved, is not an end point but rather reflects an organization that is on a pathway of continuous learning and improvement.

An explanation of the levels used in our model is:

Level 1—Unacceptable: Characterizes an organization with inconsistent management practices and teams and individuals that react to crises rather than trying to anticipate what might go wrong and managing against these potential eventualities. An organization that is at a nascent state of systemic risk management. In the committee’s view, an assessment at Level 1 is a strong negative statement.

Level 2—Concerning: An organization that has a management foundation, but their teams and individuals still work in silos with minimal collaboration or evidence of incorporating improvement strategies. This is an organization where there are real concerns about safety management.

Level 3—Neutral: An organization that is aware of its processes and is working toward consistency and uniform performance, but is still focused on procedures or compliance with existing rules.

Level 4—Good: An organization that uses its processes and capabilities to achieve reliable results by controlling the variations within its performance, although there may be specific questions about consistency across the organization.

Level 5—Mature: An organization that is continuously improving and learning with a focus on innovation, sharing, and collecting and analyzing data to support learning. This is a strong positive statement where, from all perspectives, the highest level of maturity was generally viewed as aspirational—a goal that individual companies may achieve but which is much more challenging for most companies in the industry to achieve because of the emphasis in SEMS on continuous improvement. Doing so is always raising the bar for best practice, and there will always be a small number of companies on the leading edge of best practice. A characteristic of this level of maturity is a high degree of engagement in the safety management system (SMS) at all

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

levels, creating an environment of participation and shared ownership in the outcomes. This would be reflected in the assessments of several risk elements, particularly under the risk controls of Culture, Human Resources, and Human-Systems Integration.

Some other descriptors commonly used for the maturity levels in literature on this subject are:

Level 1: Documenting, Emerging, Awareness, No Formal Plan, Unacceptable

Level 2: Controlling, Managing, Reactive, Inconsistency, Concerning

Level 3: Engaging, Involving, Uniform Systems, Some Best Practices, Neutral

Level 4: Participating, Cooperating, Proactive, Common Approach, Good

Level 5: Institutionalizing, Continually Improving, Generative, Continual Improvement, Mature

Industry-wide maturity for the 15 risk elements was considered by developing models for each of the five lenses through which the elements were viewed (Culture, Technology, Human Resources, Barriers, and Regulatory Environment) and the committee assessed the maturity level of each of the attributes related to the risk elements.

Below is an example of the maturity matrix that was used in evaluating the risk elements from the perspective of Culture (see chapter04_pz119-6">Table 4-1). Note that in this case Level 1 was not used because the committee felt that anything below Level 2 was unacceptable. Also note the common description of Level 5 for all attributes. From this common description of Level 5, it can be seen that the highest level of maturity regarding the management of systemic risk from the perspective of culture had to include

  • Continuous improvement in managing risk;
  • Continuous learning relative to managing risk;
  • Data collection and analysis in support of learning;
  • Leading indicators for risk and safety performance;
  • Development and support of on-the-job competency of all staff;
  • Common good practices and processes for managing risk within an organization;
  • Industry-wide common standards and good practices relative to risk;
  • Industry-wide sharing of safety, safety management, and risk data;
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
  • Full consideration of human performance, human factors, and human behavior in all aspects of risk management including design and operations;
  • Use of technology and development of new technologies in support of risk and safety management to include automation, data analytics, and remote monitoring; and
  • A good safety culture as an organizational and individual core value.

In the descriptions of attributes below, “industry” refers to the companies engaged in offshore energy operations, individually and collectively.

The logic in developing these descriptions was to define Level 2 as one in which minimal activity exists for an attribute, which then progresses across Level 3 and Level 4 to reach Level 5 in which (a) the industry as a whole has achieved the status of continuous improvement in safety and (b) achievement of this level is indicated by a downward trend in precursor

TABLE 4-1 Culture Maturity Model

Attribute 2 3 4 5
Shared, accepted industry definition of safety culture The industry generally uses Bureau of Safety and Environmental Enforcement’s (BSEE’s) definition of safety culture. The industry has adopted BSEE’s definition of safety culture. The industry has fully embraced the concept of a culture that supports safety. Industry has gathered to engage an independent entity to monitor the health of the industry-wide safety culture and assist individual companies with enhancing the health of their own culture. Every attribute at the Level 4, plus
(1) the industry has reached a maturity level where continuous improvement is embedded in the culture, and
(2) metrics for industry-wide and specific company safety incidents, INCs, and near misses generally trend in a downward direction.
Industry leadership and communication Industry leaders talk about the role of culture in safety management. Industry leaders consistently emphasize the role of culture in safety management. Organizational communications within industry about a culture that supports safety are open, robust, and consistent.
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Attribute 2 3 4 5
Alignment of management and management systems with safety values The industry and regulators are primarily focused on SEMS implementation as a remedy for safety concerns. As such, safety management is generally reactive in nature. Safety management and regulatory oversight are beginning to shift to systems thinking. The industry consistently promotes, supports, and actively engages in safety and safety management with workers at all levels. Industry continually emphasizes the destructive nature of major incidents and highlights lessons learned. Safety management actively employs systems thinking. Industry leaders actively manage and engage in promoting a positive safety culture and climate at all levels of their organizations. The industry and regulators are applying systems-based methods for evaluating safety concerns, shifting safety management to more of a proactive and predictive focus. There is increased focus on situation awareness.
Industry-wide shared accountability for risk awareness and communication Supervisors and workers in industry do not consistently recognize and act on their respective responsibilities to identify, communicate, and minimize risks to themselves and others. Supervisors and workers generally recognize and act on their respective responsibilities to identify, communicate, and minimize risks to themselves and others. Workers and managers have a high level of trust that their organizations at all levels will proactively respond to safety concerns raised at their level. Worker-to-worker interactions are open and honest and reflect a strong culture that supports safety. A strong commitment to accountability for safety is evident across industry and regulatory responses.
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Attribute 2 3 4 5
Use of incident and other safety metrics and best practices Throughout the industry, there is general resistance to data sharing and transparency. Industry-wide, initiatives are being implemented to address the need for and benefits of data sharing and transparency. The overall industry has adopted data sharing and transparency standards.
Use of checklistsa as a tool to ensure that critical information is available and decision making is systematic Use of checklists is not standard throughout the industry. Initiatives are being implemented to standardize the use of checklists throughout the industry. The use of checklists is a widely accepted standard throughout the industry.
Industry standards for safety culture and safety climate management There is no industry standard for the management of safety culture and climate (including associated training). Initiatives are being implemented to share best practices for the management of safety culture and climate (including associated training). Industry practices and training incorporate the science of safety culture and climate.
Standards for safety culture and safety climate assessment No standard measures exist for assessing industry safety culture and climate. Industry and regulators are working to develop standard measures for a culture and climate that support safety. The industry and regulators are applying standard measures to assess the health of culture and climate that support safety.

a See the committee’s definition and view of how checklists should be used in the discussion of Risk Element 8, which is based on Gawande (2009).

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

indicators, incidents, and accidents, as shown in available empirical safety metrics.

DEFINITIONS AND ASSESSMENTS OF THE 15 ELEMENTS THAT COMPRISE SYSTEMIC RISK

In the context of this assessment, the “industry” comprises all of those involved in offshore energy operations, including operating companies, co-venture partners, service companies, and the offshore regulators.

It is important to recognize that industry as described above is not a homogeneous unit, but rather comprises a wide variety of players from large multinational integrated commercial oil companies to very small independent operators and includes representatives of national and quasi-national oil companies. Similarly, the service companies active in offshore energy range from large integrated service providers to niche specialty companies that supply specific services and hardware. The regulatory sector is dominated by the Bureau of Safety and Environmental Enforcement (BSEE), having evolved from the pre-Macondo Minerals Management Service, and the Coast Guard, and also includes other federal and state agencies.

This diversity of players, roles and responsibilities, and business and operating models leads to a high degree of heterogeneity in the industry that is reflected in the discussion of the 15 Elements of Systemic Risk.

Risk Control: A Culture That Supports Safety

The committee’s discussion and treatment of organizational culture in this report drew on the Transportation Research Board’s (TRB’s) report on the safety culture of the U.S. offshore industry (NASEM, 2016a) and a Center for Offshore Safety (COS) guidance document on the same subject (COS, 2018). For those unfamiliar with these reports and supporting literature, the culture of an organization reflects its values, which are so deeply ingrained that they are not always specifically or readily articulated by those within it. These values reflect at the surface level of an organization with what Edgar Schein (2010) described as “the way we do things around here.” Note that cultural values may or may not explicitly include a deep commitment to minimizing risk to people and the environment. The phrase “a culture that supports safety” captures whether an organization is committed to risk minimization and values safety equally with economic performance, including in how it allocates resources to ensure safety. In the text we occasionally use “safety culture” as a short-hand description of this level of commitment. The important point is that an organization has a culture that informs its deepest values. Safety, or a culture that supports safety, is not a separate aspect of organizational culture. It is either one of an organization’s core values or

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

it is subject to being compromised in favor of other goals. Risk elements 1 to 3 are consistent with how these dimensions of organizational culture are treated in the TRB safety culture report (see NASEM, 2016a).

Risk Element 1: Shared Industry Definition of a Culture That Supports Safety

The 2016 TRB report endorsed a definition of a culture that is committed to safety that had been published by BSEE in 2013. BSEE’s policy defined safety culture as “the core values and behaviors of all members of an organization that reflect a commitment to conduct business in a manner that protects people and the environment,” a definition that was largely based on that used in the nuclear power and other industries that manage low-probability, high-consequence risk. The committee for the 2016 TRB report validated this definition based on the peer-reviewed literature and it urged the offshore industry to embrace this definition as it embarked on the safety culture journey (NASEM, 2016a). Individual exemplary offshore companies had made progress in articulating and developing their cultures’ commitment to safety before 2016, but it was obvious at that time that the industry as a whole had not. Policy statements by key industry leaders and associations endorsing the BSEE definition and guidance in developing a culture of safety developed by industry associations and the COS would serve as evidence that the industry has embraced this definition.

Pre-Macondo, there was little specific discussion in the industry regarding safety culture as a term or a concept, and there were no industry definitions and practices or regulations specifically regarding safety culture. However, there was considerable discussion at that time about the American Petroleum Institute’s (API’s) Recommended Practice (RP) 75, which included concepts and elements related to culture such as leadership. However, the RP 75 standard was voluntary at that time.

Industry was not oblivious to the concept of safety culture. Many companies had programs related to behavior-based safety (BBS). But there were not common and universally accepted industry practices in this regard, nor was BBS always regarded as the best way to affect safety performance at all levels with what could be seen as a focus on individuals and away from leadership. Some companies had major programs such as “Hearts and Minds” that were designed to address safety culture (Hudson, 2007). The committee recognizes these efforts, but notes the limited use of effective programs such as “Hearts and Minds” and the lack of a sustained industrywide effort in this area.

In its 2013 policy to define safety culture, BSEE stated an intention to not mandate safety culture requirements. In recent years, BSEE has informally considered culture as part of its SEMS inspection regime, but

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

no formal regulatory assessment process exists. Even so, there are some exemplary companies, both large and small, that have undertaken efforts to enhance their culture to support safety. The committee assesses the overall maturity of industry as being at Level 2, recognizing progress in developing a shared and accepted definition of safety culture and creating and sustaining a culture that supports safety. SEMS implementation, which is complete throughout industry, may lead over time to improvements in a culture that supports safety, which if accomplished would move industry maturity to Level 3.

The committee deems that an industry culture that supports safety is critically important to achieving reductions in systemic risk in the industry as a whole. Industry, individually and collectively, has not adopted a definition of safety culture and has not embarked on a program to pursue improvements in culture or to regularly assess culture and safety culture progress. In addition, there are formal mechanisms where BSEE could advance efforts to ensure that culture is a formal part of the regulatory assessment process (e.g., in more sophisticated inspections and SEMS audits).

Risk Element 2: Elements of a Culture That Supports Safety

This risk element is based on clear evidence of a cultural commitment to safety, including visible communications from industry leaders and visible evidence of workers accepting accountability for the safety of their actions and for their co-workers. Use of SMSs such as SEMS is included as a dimension of this risk indicator because SEMS specifically provides comprehensive management processes for communicating, exercising, and improving an organization’s commitment to safety as a core element of its culture. In addition, the spirit with which an organization develops and engages its SMS is indicative of its culture’s integration of safety as a core value. Indicators of management commitment and individual accountability and reports on the ongoing third-party audits of SEMS implementation serve as indicators of whether SEMS are being employed as intended or simply as an exercise in regulatory compliance.

In addition to a shared and accepted definition of safety culture, elements of safety culture include consistent and robust industry leadership and communication, alignment of management and management systems with safety values, industry-wide shared accountability, use of incident and safety metrics and best practices, use of checklists, industry standards for the management of culture and climate, and industry standards for assessment of culture and climate.

Pre-Macondo, there was no specific, industry-wide discussion or effort regarding safety culture as a term or a concept. Similar to Element

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

1, there were no industry definitions or standards specifically regarding safety culture, and API RP 75 was voluntary. Even so, industry was not oblivious to the concept of safety culture and, as with Element 1, the efforts of individual companies with programs related to BBS are recognized as significant.

Much progress has been made on this element since the Macondo accident. The committee has assessed maturity from Level 2 to Level 4 for the individual elements of safety culture and assess industry as a whole today as being a Level 3. A few exemplary operators (i.e., maturity well above the average), which represent a substantial share of total GoM drilling and production, have been and are making good progress over multiple years in achieving a culture of safety.

BSEE is actively trying to identify and address poorly run operations, highlighting the systemic risks associated with operators and contractors that are not demonstrating a deep commitment to a culture that supports safety and SEMS. This is highlighted by the audit results and enforcement actions over three cycles of BSEE audits. The committee assumes a correlation between culture, SEMS as an overall management system, and a company’s process safety record and perceives that the state of the practice offshore is not very advanced in using metrics, or indicators, of these three elements to drive continuous improvement.

Risk Element 3: Assessment and Measurement of a Culture That Supports Safety

The 2016 TRB report stressed both the challenges and importance of organizations having a deliberate, ongoing process of assessing their cultures and provided best practice guidance in doing so (NASEM, 2016a). Management statements that individual companies have adopted safety as a core value are necessary but not sufficient for changing an organization’s culture. Admittedly, assessing culture is difficult on several dimensions, but tools such as climate surveys, focus groups, ethnographic studies,1 and other strategies can serve as useful techniques for understanding whether an organization is moving in the right direction over time. The indicators of merit are whether companies across the industry are actively engaged in this process, are learning and improving from their assessments, are sharing best practices, and whether industry organizations have provided standards, guidance, and tools to assist operators and contractors that are not already engaged and committed to a culture that supports safety.

___________________

1 Ethnographic studies are anthropological, on-site studies of an organization’s culture that collect information from observation and interviews over a period that varies from weeks to years.

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

Prior to the Macondo incident, there was no specific industry-wide discussion regarding safety culture as a term or concept. There were no industry definitions, practices, or standards regarding safety culture specifically, and the regulatory environment was largely based on prescriptive regulations generally focused on equipment, equipment design, and equipment standards. As with Elements 1 and 2, there was also the voluntary nature of API RP 75 and the lack of metrics and definitions. However, individual company efforts with BBS and major programs such as “Hearts and Minds” and efforts to recognize the role of management and management processes in the root causes of accidents are noted as positive aspects of industry safety culture prior to the Macondo accident.

Over the last decade (i.e., post-Macondo), there has been considerable and ongoing discussion, consideration, and work regarding safety culture. This includes the 2016 TRB report (see NASEM, 2016a) that stressed both the challenges and importance of organizations’ having a deliberate, ongoing process of assessing their cultures, current and recent projects of the National Academies’ Gulf Research Program (GRP) regarding safety culture and safety culture surveys and measurement, the COS Good Practices on certain BSEE-defined safety culture elements, and BSEE’s adoption of a definition of safety culture elements adapted from the nuclear industry. This significant improvement over the last decade is recognized and the committee judges industry maturity of this risk element as at Level 2.

The International Association of Oil & Gas Producers also has many projects including “learning from normal work” and “process safety fundamentals,” both of which contain elements that can assess culture. Many companies are participating in safety culture through COS direct work, COS working with GRP projects, and companies directly being sponsors for and working with GRP projects related to safety culture. Several companies have adopted safety culture concepts and tools from the GRP projects, including “mindfulness,” and these companies are measuring the results of the implementation of these parts of safety culture (see Weick and Sutcliffe, 2015). Additionally, BSEE has made API RP 75 and additional requirements mandatory and is requiring accredited third-party audits of all operators’ SEMS programs. These audits and the SEMS progress noted in the audit results can give insight and a degree of measurement of a company’s safety culture and safety culture progress. Additionally, API has developed a revised RP 75 (Fourth Edition) which is a more modernized document and process in support of safety culture. These are very positive efforts that if broadly adopted and consistently utilized by industry would place industry maturity at Level 4.

Admittedly, assessing culture is difficult on several dimensions. Tools and techniques specifically adapted for the U.S. offshore industry are just now emerging, such as enhanced climate surveys and other strategies that

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

can be useful techniques for understanding whether an organization is moving in the right direction over time (NASEM, 2016a, Chapter 5). Some companies have been using safety culture assessment tools available from auditing and consulting organizations for several years. However, industrywide discussion regarding the tools, their effectiveness, and how they have been used to make progress has not occurred. Also, some companies operating outside the U.S. GoM have used safety culture assessments for decades. However, learnings had not been regularly shared, largely because of the lack of an industry platform for doing so. This has changed over the past decade, largely through the establishment of COS and broad industry efforts at working with COS.

BSEE has no requirements regarding safety culture or safety culture surveys, and there is no general industry agreement or standard in this regard. Progress has been slow with little industry consideration of the 2016 TRB study (NASEM, 2016a) and modest work by industry associations. But there is currently considerable work on safety culture surveys, and the industry as a whole is beginning to see them as an important part of safety culture continual improvement.

Risk Control: Human Resources

The committee views human resources broadly to include how industry prepares and supports its workforce in carrying out its work while minimizing risk to individuals and the environment. This broad concept is decomposed into two risk elements.

Risk Element 4: Education and Training

The committee’s interest in this risk element regards how well industry formally prepares and supports its workforce to perform competently in the variety of tasks it must carry out safely. In addition to achieving knowledge, skills, and abilities in specific areas, potential measures of merit are whether workers are trained for and exercise situation awareness while exposed to hazards and whether industry has established a set of basic requirements to ensure that workers have received an appropriate level of education and training to make appropriate safety-conscious decisions while working offshore (Endsley, 1995). Specific measures would include the extent to which industry requires specific training and certification for those in safety-critical positions. Other output measures of competence in education and training are also addressed in risk elements 9 and 15.

Evidence for a high level of maturity for this risk element would include the extent to which industry requires training and certification that incorporate documentation of competency in areas that include appropriate

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

technical and operational skills as well as nontechnical skills such as effective listening, communicating, and mindfulness (CSB, 2016).

Before the Macondo incident, the industry generally acknowledged that the value and importance of training and the resources (i.e., time and money) dedicated to training were reflective of that. However, there were several issues. Much of the training was classroom-based training and testing, done by individual companies, with no consistency across the industry. Industry training largely utilized contractors and consultant training companies to provide these services and essentially trusted that the training was effective. Additionally, many trainers were not skilled and knowledgeable in effective adult learning concepts or in SEMS, SMS, other risk management systems and tools, or in how to develop and assess competence in staff. Although some training, such as in well control, utilized simulation, the focus was on managing hazardous situations that were presented and did not include training on the recognition of hazards. Little required training was based on evidence that found it to be reliable and effective.

There was not much external pressure to ensure that the training fully supported safe work and a good safety climate. Another significant issue was that training emphasized response to dangerous situations but not recognition or prevention of these situations, such as with the well control schools that were run. Roles and responsibilities were often handled with complex RACI (responsible, accountable, consulted, and informed) charts2 and people were not necessarily trained for their specific roles or responsibilities. Thus, before Macondo, industry recognized the importance of training, but there were significant improvements that needed to be made.

Since Macondo, the industry continues to dedicate resources to and invest in training and education, particularly for well control. For instance, full-blown well simulators have been developed by operators and contractors and are now widely utilized in training. However, there are questions about whether the offshore industry as a whole has made a sufficient commitment to developing industry-wide minimum basic education and training requirements across all jobs and whether companies have cultures of adequate onboarding and sustained training leading to competency development. Furthermore, there has been little progress in requiring demonstration of competence. Thus, it is the committee’s view that overall, industry maturity is at Level 2, while specifically recognizing Level 3 improvements in well control training and in competency development and assessment in a few companies.

___________________

2 For an example, see https://racichart.org.

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

Risk Element 5: Worker Empowerment

Acceptance of the responsibility to minimize risk and exercise of techniques to do this by individuals at all levels requires that they feel empowered to speak up, ask questions, call for a time-out to discuss issues or questions, or stop work when they are unsure whether a task they are about to undertake, or are undertaking, is adequately understood, and is minimizing risk. Worker empowerment also includes challenging co-workers who may not be following procedures or supervisors who push workers to complete tasks too quickly, or to cut corners, and being able to do so without fear of recrimination. The ability to exercise personal accountability, or engagement, in this fashion without fear of recrimination is an indicator of an organization’s culture (having a trusting environment for raising concerns) (see Knode, 2020). Measures of merit are whether industry’s SEMS practices actively encourage and award such behavior, how industry leaders and company management reinforce such behavior through their actions and messaging to the workforce, and whether and how regulators support this activity through rules and enforcement.

Historically, workers did not understand or did not trust or believe that they had the right to stop unsafe things, nor did they regularly do so. This was the case at Macondo where individuals on the rig at the time of the accident stated that they did not understand why the order of activities in the temporary abandonment program were being changed but assumed that those in charge knew what they were doing. The Minerals Management Service (MMS) was promoting job safety analyses (JSAs), but it was a small step relative to the scope of workforce empowerment needed. There was a formal recognition and use of systems such as stop-work authority (SWA), but there was a lack of broad and consistent industry leadership and messaging as well as the minimal attention generally paid to worker empowerment by companies and regulators.

Industry has been working diligently to better implement JSA and SWA as required in SEMS, but U.S. workers generally feel that they have less influence (empowerment) over safety policies, plans, and implementation than workers in the North Sea. Despite emphasis on SWA, BSEE incident investigations find situations in which workers could have implemented SWA but did not.3 These facts lead to an overall assessment of industry maturity at Level 3. A key factor influencing worker willingness to exercise SWA is whether they perceive that they can do so without recrimination. The committee’s general impressions are that many workers are not

___________________

3 See an example in the accident investigation report where the identified root cause—“no communication between driller and crane operator”—should have prompted someone to exercise SWA. https://www.bsee.gov/sites/bsee.gov/files/mc773-eni-us-operating-10-jul-2021.pdf.

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

confident or do not believe that they can speak up freely and without consequences, despite extensive industry communications on this subject.

Risk Control: Human-Systems Integration

The concepts associated with the risk control of human-systems integration (HSI) were discussed in Chapter 1. HSI refers to the design of the physical systems, management systems, and interfaces with which people interact. The intent of HSI is to improve the whole system design and people’s interactions with the systems to reduce the likelihood and consequences of human error.

Risk Element 6: Integrated System Design

By “integrated system design,” the committee means that physical design, standards, regulation, and operational processes and procedures work together to either eliminate hazards or manage them effectively. The factors considered by the committee are the development, application, and industry-wide use of standards for design that incorporate this concept. This includes human factors and human-systems integration in the design process and standards.

Pre-Macondo, standards were in widespread use within the industry, written with broad industry participation and incorporated into regulations. However, in a reflection of industry culture at the time, human factors and human performance were not well incorporated into these standards. Industry guidelines were also widespread but were not necessarily incorporated into specific operating requirements.

MMS had a strong focus on industry equipment standards pre-Macondo, and the regulatory emphasis on developing standards and incorporating them into regulations suggested a relatively high level of maturity for this risk element. However, industry standards did not exist for everything, were largely focused on individual pieces of equipment, were not systems based, and did not include concepts such as barrier management, human factors, and human performance.

Importantly, in many aspects of our analysis (i.e., culture, technology, and the regulatory environment), there was a complete lack of robust, active, and proactive information sharing, which is critical to safety learning and improvement; proper barrier design and operation; and optimal systemic risk management. Safety-related data, such as subsurface pressures, were only shared when requested. Regulatory safety data collection was basic and only included lagging incident-related data such as spills, fires, explosions, injuries, and fatalities. Pre-Macondo, there were no industry

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

organizations such as SafeOCS or COS, which have enabled more proactive data sharing over the last decade.

The industry performs well at incorporating standards into practice, but the standards and regulations do not fully reflect human factors design principles that are incorporated in other high-risk industries, including petrochemicals. The industry has some guidelines regarding human factors, but these have not yet received widespread use, nor have they been incorporated into SEMS guidance or other regulations as noted in the Chemical Safety and Hazard Investigation Board (CSB) and American Bureau of Shipping (ABS) reports discussed in Chapter 2. Also, the regulations themselves do not reflect modern thinking about process safety barriers or HSI in design. Importantly, the industry still lacks effective information sharing outside of the development of standards and those companies participating in COS. These considerations lead to the overall maturity assessment today as being at Level 2.

There is, however, a recognition that, despite the challenges listed above, there is consistent, widespread use of standards by the industry. The industry has been rigorous about developing and implementing physical design standards. Failures of physical systems offshore leading to blowouts or other potential high-consequence events are extremely rare and have not been the cause of major accidents since the industry’s standards development process matured decades ago. The rigor and success rate of physical design suggests a significantly higher level of maturity, reflecting an area of considerable strength and importance in risk management. In this aspect of integrated system design (i.e., physical hardware and systems) the industry maturity is at Level 4.

Risk Element 7: SEMS Implementation

As with any safety management system, SEMS are intended to serve as the overarching process by which plans are developed and implemented for drilling and producing hydrocarbons safely. This includes identification, evaluation, and management of specific risks at individual locations, evaluation of performance; and the continuous improvement and implementation of practices and technologies in a continuous cycle of improvement. Measures include the development and implementation of audit requirements, certification of third-party independent auditors, results of ongoing third-party audits of operator SEMS programs, and BSEE audits triggered by events or risk-based inspections. Corrective action plans (CAPs) resulting from audits should be focused on resolving systemic root causes and yield continuous improvement. Subsequent audits should look back over time to assess the closeout of required CAPs. This can be a very effective measure of improvement over time.

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

It is important to consider that this element is how SEMS are supporting human-systems integration, human performance, and human factors in barrier management. In this regard, it is also important to consider that the term SEMS can refer to three things:

  • As a general description of this type of management system, which can include process safety management systems, safety management systems, operations management systems, and so forth;
  • As referred to and defined in API RP 75, Fourth Edition; and
  • As BSEE regulation requires and references to API RP 75, Third Edition, plus other BSEE requirements.

Pre-Macondo, there was not a BSEE SEMS regulation, but MMS did encourage voluntary adoption of API RP 75 and mandated adoption later when industry voluntary participation indicated to BSEE that it was necessary. Many companies, particularly major operators, developed similar internal operational management systems that included RP 75 elements or concepts. These systems were independently developed and managed by the individual companies, but at a minimum, complied with existing regulations.

Companies with management systems did regular internal audits of their systems, and these internal management systems did include the concept of barrier management and a vocabulary and processes of hazard identification and protection from major hazards via critical equipment. API RP 75, and many internal management systems modeled after RP 75, included the concept of human factors, which is defined in the RP 75 document as, “The interaction and application of scientific knowledge about people, facilities and management systems to improve their interaction in the workplace and reduce the likelihood and/or consequences of human error.” RP 75, however, did not require or provide guidance on application of any human factors standards. Management systems also included the concept of whole-system management of hazards, again from RP 75, “Management of safety hazards and environmental impacts is an integral part of the design, construction, maintenance, operation, and monitoring of a facility.”

Additionally, internal management systems also included the concept of SEMP. Another whole-system management process, “The SEMP is based on the following hierarchy of program development:

  1. Safety and environmental policy
  2. Planning
  3. Implementation and operation
  4. Verification and corrective action
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
  1. Management review
  2. Continual improvement.”

SEMP was well understood by MMS.

These internal management systems, adopted by most of the industry, along with existing MMS regulations, performed well prior to Macondo. Hazards were well managed, and regulations requiring protection and testing of critical equipment were enforced. This is despite the lack of inclusion of newer thinking such as bowtie analysis, barrier management, contingent barriers, and HSI. Many companies did understand and include human factors in design and operation to protect against human error, but it was an early level of understanding and a narrow scope relative to today’s concepts of human factors and HSI.

Overall, this presents a complex picture of the state of safety management systems prior to the Macondo incident.

Significant progress has been made in the industry and within BSEE over the last decade. Of particular significance is the establishment of the BSEE SEMS regulation which requires all operators to have SEMS that include all of the elements and content of API RP 75, Third Edition, plus additional BSEE required elements. Additionally, all operators must regularly audit their BSEE SEMS using accredited auditors, the audit reports must be supplied to BSEE, BSEE must be satisfied with all identified CAPs, and the operator is responsible for ensuring their completion. In addition, the audit finding summaries are analyzed and made publicly available (BSEE, 2020). This has delivered greater consistency in SEMS, SEMS implementation, and SEMS auditing. The benefits of this consistency also include a common and well-understood industry vocabulary and consistent training and expectations relative to SEMS and SEMS implementation. It has also enhanced the dialogue, interaction, and alignment between operators and the regulator relative to SEMS.

Many groups and industry associations now deliver good practices relative to SEMS and tools for effective SEMS implementation, guidance for SEMS audit effectiveness and CAPs, and tools for effective auditing and accreditation of BSEE SEMS auditors. Last, but most important, via COS and other industry associations, there is a robust and productive dialogue and sharing among the entire industry on both SEMS data and how to continually enhance and make SEMS more effective. This is quite dramatic progress in the space of only 10 years and is reflective of the overall industry assessment of maturity for this risk element as being at Level 3.

The implementation and verification of effective BSEE SEMS by all operators has further enhanced and supported the importance and inclusion of human factors considerations and enhancements. This is an improvement over the way that human factors were being considered pre-Macondo as

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

well as over what is in RP 75 itself. Many organizations and companies are diligently pursuing how to measure and enhance human performance in support of safety and environmental performance, including barrier management. This also supports more effective total system SEMS. This work and these accomplishments are good and should be recognized as good progress on the road to fully understanding, embracing, and enhancing HSI in the fullest, and suggest a higher level of maturity in some aspects of SEMS implementation.

However, there are opportunities not yet realized. Both the current (Third) and new RP 75 editions (Fourth) still refer to human factors only generally and do not mention contingent barrier management. Hence, BSEE regulations and audits are in the same situation. BSEE SEMS audits have tended to be somewhat prescriptive in nature and not performance based as intended, and this prescriptiveness is not fully supportive of HSI. Several important concepts are just now emerging within the offshore industry. These include mindfulness, human performance and human effectiveness, true competency, effective adult learning, creating and maintaining meaningful effective procedures and work practices, monitoring human performance, fatigue, alarm management, and the effective use of automation and data analytics in human-system integration. As the understanding of these concepts develops, they need to be integrated into SEMS, into the definition of effective SEMS, and into the regulations, audits, and inspections regarding SEMS in order to enhance the maturity of regulator and industry systemic risk management.

Note that an important aspect of offshore safety management is that, by law, BSEE is only able to require that operators have a functioning and regularly audited SEMS system. It is the operator’s responsibility to ensure that contractors working for them have their own safety management systems or policies that are aligned with the operator’s SEMS through appropriate bridging documents.

Risk Element 8: Checklists, Procedures, and Job Safety Analyses

This risk element considers use of specific formalized safety-focused practices. Included would be the development and use of written work procedures designed to minimize risk and to support the safe execution of work by operating staff as well as ongoing improvements in developing, using, and communicating JSAs.

JSAs are joint supervisor-employee plans and discussions about a job to be carried out and the specific steps that will be taken to minimize risk. Also important are the development and use of improved checklists for employees to refer to when beginning work and during various stages of work, particularly when unanticipated risks emerge during operations (see

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

Gawande, 2009). Checklists and JSAs should support situation awareness and the reevaluation of the work and work plans as required by changing work situations. This view of checklists and their application, as applied in commercial aviation, is completely different from how checklists are employed by the industry and in current BSEE inspections. Industry’s management of change (MOC) procedures and guidance are included as well as the use of “planned holds” to pause work before beginning a risky procedure to discuss how possible hazardous states will be managed if they emerge. Additionally, this includes processes that ensure the development and issuance of permits to work on offshore facilities that ensure that planned activities do not conflict and that all appropriate procedures have been undertaken to minimize risk before work begins.

Measures include the maturity of industry use of these activities (based on committee judgment), regulatory requirements for their use, and any available studies of, or reports on, the quality of application and efficacy of these activities offshore.

JSAs have been commonly used by the industry for a long time but were frequently written without worker input and often written by office personnel as a compliance tool. They are designed to comply with company practices and procedures, but are not necessarily written to support workers actually executing the work or to improve work practices. Although JSAs tend to be focused on individual jobs and include elements of occupational safety and individual safety equipment, they do generally lay out the safe process of executing the job described. So, although not explicitly process safety documents, failures associated with JSAs can and have led to process safety incidents.

Historically, while the regulator (MMS, pre-Macondo) had a focus on the use of JSAs, there was a compliance approach to their use and effective checklists and a lack of recognition that JSAs should be redone when working conditions changed.

Checklists, procedures, and JSAs should be available to workers with the goal of using them as tools to support safe, efficient, and effective performance of tasks by embedding safety and best work practices in processes and procedures. However, within the oil and gas industry, this written guidance is often not evaluated for effectiveness, and the tools themselves are not an integrated system to support safe, efficient, and effective work performance. Often, they are written without worker input, reflecting a weak culture of safety, and they are not regularly revised when the working situation or environment changes. Too often, incident reports note a lack of recognition that changes to plans and procedures require new JSAs, checklists, and procedures, and that they should all be continuously revised and improved (in a timely manner) to ensure their accuracy and effectiveness. Additionally, the communication of work plans to and

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

with the workers needs to be more effective in supporting systemic risk management.

Regarding checklists, from a regulatory standpoint, BSEE inspections use lists of Potential Incidents of Noncompliance (PINCs) and regulatory standards to ensure compliance on offshore facilities. However, this compliance mentality is far from the effective use of checklists as demonstrated in other high-hazard industries, particularly commercial aviation.

Effective checklists do not tell people what to do. They are a tool for systematic decision making that ensure that operators have considered all necessary data and talked with any others that should be consulted or informed of upcoming activities. Checklists are routinely employed prior to initiating critical processes, and for effective use are again consulted when operating conditions, procedures, or the environment change. Similarly, planned holds are often employed in high-hazard industries to force a pause in operations and provide for checklist review or consultation with expert staff.

In oil and gas operations there are few requirements for checklists that support a situation awareness focus, and the industry does not routinely incorporate planned holds into work plans in order to discuss plans and evaluate risks to be encountered before beginning hazardous processes.

Overall, the committee assesses industry maturity in the use of these tools in the offshore industry to be a Level 3. The tools are employed, however, not in a standardized and robust manner as compared to, for example, the use of checklists in commercial aviation. The committee notes a particularly weak industry culture toward the appropriate and effective use of checklists as well as recognizing when JSAs and the JSA process must be improved.

Risk Element 9: Behaviors

The industry efforts in this risk element should ultimately reflect the competence of the workforce and their ability to carry out their work while being fully situationally aware. The continuously improving implementation of SEMS elements such as MOC, safe work practices, training, incident investigation, SWA, and reporting of unsafe practices will both support and uphold competence and situation awareness. Industry participation in SafeOCS generates precursor information that can be used to improve competency development for both managers and frontline workers, including sharing of information about root causes of incidents and how to better manage systemic risk.

The heart of this risk element is whether the workforce is actually competent to carry out assigned tasks safely. The important question is whether workers in safety-critical positions actually perform jobs in the manner in

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

which they were trained and whether their training supported their competency and decision making as well as situation awareness in these positions.

This risk element is closely linked to Element 4, Education and Training, but the focus here is on ensuring worker competence, providing opportunities for the industry and industry staff to learn from incidents and near misses, and having leadership communicate clearly about the importance of not only effective and efficient work but also safe working environments. This requires more than knowledge; it requires demonstrating through exercises or simulations that workers have internalized their education and training and can make good decisions and perform their tasks properly while minimizing risk. It further requires the industry to create systems for sharing and analyzing incident and near-miss data in ways that maximize understanding and internalization of learnings from them. Additionally, for workforce learning to occur, leaders must appropriately and effectively communicate the results of the analysis of the incident and near-miss data.

The role of the regulator in this element, as well as Element 4, is addressed in risk element 15, Worker Certification.

Measures for assessing this risk element include results of SEMS audits, industry participation in SafeOCS, COS reports of root causes of incidents, and the existence of training programs to enhance situational awareness. Does industry require demonstrations of competence rather than simply allowing individuals to work offshore based on their level of education or training attainment? Does industry have and effectively leverage an incident and near-miss reporting system? And do leaders demonstrate the ability to effectively communicate safety information and priorities?

Before Macondo, the industry appeared to lack clear and consistent acknowledgment of the need to support effective HSI in situations in which workers were directly or indirectly involved in barrier management or in fact that these systems were designed in this manner. Although some companies had incorporated human factors into their safety systems, there was no acknowledgment of the need to share information regarding how to best train and support workers’ behaviors when they were directly or indirectly involved in barrier management.

SEMS was available but it was voluntary, and those companies who did use it did not necessarily use it consistently at all facilities. However, the fact that RP 75 included training elements and that some companies were using it on a voluntary basis is recognized.

There was some data sharing that occurred, but it was not consistent, encouraged, or required and was normally by request. Shared data was generally a lagging indicator and included quite basic data such as counts of fires, explosions, and spills. It was not data related to systemic risk management. In those cases where safety-related information was requested by one operator from another, people were told what was happening but not

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

in a consistent, reliable, or collaborative manner. Again, the data sharing was not about human-system integration that supported workers when they had to be involved in barrier management.

Since Macondo, SEMS has continued to evolve and is now mandatory. SafeOCS now exists and is made up of three components. The use of SafeOCS programs for the performance of subsea systems and BOPs is mandatory, while SafeOCS ISD is voluntary and collects safety-related data. Industry participation represents a large share of the work done offshore, and these companies are engaged in data sharing by using SafeOCS, although broadly available information still lags and the information that can support systemic risk and barrier management needs to be enhanced. The industry is, however, taking important steps toward supporting effective human-system integration as is reflected by the large investments in full oil rig simulators where teams are trained together on how to identify the potential for risks and anticipate problems (e.g., blowouts) as well as how to mitigate these risks and address the problems, not just how to respond if something goes wrong.

The improvements over the last decade in information sharing related to training an effective workforce is reflected in the committee’s view that this risk element is at Level 3. This rating incorporates the higher level of maturity, akin to Level 4, of industry activities such as the creation of SafeOCS and the COS, with its efforts to encourage data sharing, and emerging advanced programs for well control training that includes supervisory and crew resource management assessment available through the International Association of Drilling Contractors (IADC).4

At the time of this report, there is strong, but not universal, participation in SafeOCS, and BSEE does not seem to be inclined to require participation in the voluntary aspects of SafeOCS. Without full and consistent participation and leadership from BSEE, the analysis of the incidents and near misses reported to SafeOCS risks being inconsistent and potentially from a too narrow sample of the industry to provide reliable recommendations to the industry. Regulatory leadership in promoting the use of SafeOCS and in analyzing data from the program is where greater focus is needed.

In addition, the workforce does not always follow written procedures because the procedures are sometimes inadequate to the task. Workers regularly perceive that the procedures were written by people who are not fully familiar with the task at hand, and months or more are required to change those procedures (Peres et al., 2020). Inadequate procedures or failure to follow procedures has consistently been the most frequently cited area needing improvement in COS Learning-from-Incident reports (COS,

___________________

4 See https://www.iadc.org/accreditation/wellsharp.

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

2021). This is a significant area where industry maturity lags. Furthermore, industry has not developed a standard for competence or its consistent assessment of operating staff, although a few large companies have developed and implemented a system of competency coaches that work with on-site supervisors and operations staff.

Finally, the industry in general still puts too much emphasis on a “fix the worker” mentality if there are problems or errors when workers are engaged in barrier management. This is reflected by insufficient consideration, or failure to consider, the entire system (the technology or interface the worker is using, procedures necessary for completing the task, safety climate, etc.) when a barrier fails. In addition, there is as yet little information sharing of data that could be used to improve contingent barrier management. This aspect of industry maturity is still at Level 2.

Risk Control: Hardware and Design

The first nine risk elements described above make up the People and Human-Systems Integration systems and were assessed from those perspectives. The focus now shifts to the Systems side and an emphasis on barrier management. Of the two risk controls within this system, the first is Hardware and Design and the three risk elements of Hardware and Design discussed below focus on the physical design and operation of barriers and on how technology is developed and incorporated into offshore systems for improving barrier management.

Risk Element 10: Barrier Identification

The committee uses “barriers” as they are defined and applied in the bowtie model which is used widely in the offshore oil and gas industry (IOGP, 2016), as described in Chapter 1. This model relies on barriers (engineering or administrative controls) managed through an organization’s SMS to prevent an incident from happening as well as to mitigate any consequences should a release occur (see Figure 1-4). By “identification,” the committee refers to properly identifying and establishing physical and contingent barriers against the loss of hydrocarbon containment.

Physical barriers are those that are specified and designed according to industry standards and regulations and do not require human active intervention for them to work except for proper inspection and maintenance. Examples are (a) the well casing thickness and strength that reduces risk of hydrocarbon intrusion into the well during the drilling process as well as over the entire life of the well, and (b) cement plugs, mechanical plugs, and other physical barriers that keep hydrocarbons out of the well when the pay zone has been reached and the well is temporarily abandoned before

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

a separate rig reopens it to begin production. During well completion to provide for production, additional primary and secondary physical barriers are installed in the well system to keep hydrocarbons “behind pipe” over the production life of the well (Hyne, 2019).

Contingent barriers are those that require active human interaction or intervention to prevent the accidental release of hydrocarbons. These can be operational or management systems and processes. Examples include (a) the establishment and circulation of an appropriate density and weight of drilling mud to keep the well and formation pressures balanced, (b) various monitoring systems to measure downhole pressures and ensure that drilling takes place within established safety margins, and (c) various routine and emergency shut-in systems such as those incorporated into the blowout preventer that are used to maintain driller control of hydrocarbons in a well and must generally be activated by human action.

The maturity of an industry could be indicated by whether it has identified a set of physical and contingent barriers appropriate to anticipated hazards and has provided standards and guidance documents to assist in this process. The industry could also establish standards regarding operation of barriers and minimum standards for the presence and integrity of barriers.

For quite a long time it has been recognized that the industry had to identify critical systems to address major hazards, during which discussion addressed hazards and not barriers. In industry standards and regulations, there was a clear expectation of critical control systems. Efforts focused on major hazards and physical systems, but it was not systematic and did not use modern barrier concepts. Also historically, there was not a focus on, and was little recognition of, the importance of identifying and managing contingent barriers.

Even today, neither regulation nor industry standards sufficiently reflect modern terminology, thinking, and practice about barriers and use of the bowtie model. There is little industry or regulatory guidance available for contingent barriers, which the committee views as a main source of industry systemic risk. This is noted in the CSB and ABS reports discussed in Chapter 2. This leads to an overall committee view that in barrier identification, the industry is at maturity Level 2. However, industry has done well with standards, standardization, design, and implementation of physical mitigation of major hazards. This is similarly true in regulations. Macondo revealed weaknesses in fail-safe systems that were subsequently corrected. However, these weaknesses were not discovered and corrected proactively via systemic risk management and bowtie analysis processes. Some operators are implementing new technologies to enhance barrier performance, including software to better track needed maintenance and act on it. However, the committee’s sense is that this practice is not widespread. There is still much work to be done, but positive moves by industry

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

support an assessment that some aspects of barrier identification are at maturity Level 3.

Risk Element 11: Barrier Integrity

This risk element refers to how industry measures and maintains the integrity of barriers through industry standards, design practices, tests, maintenance, inspection, and the number of barriers applied. This risk element addresses barriers to maintain well control during drilling and barriers to contain hydrocarbons during production. For physical barriers, this would include guidance, standards, and operations regarding the number of physical barriers maintained during drilling, temporary abandonment, completion, and abandonment and tests of whether cement plugs and other physical barriers are, in fact, preventing the inflow of hydrocarbons into the well. It is important to recognize that many key barriers need constant measurement, data collection, oversight, and analysis to ensure their integrity. For contingent barriers, this would include standards, guidance, competency training, and the inclusion of performance drills and tests of human performance in simulated settings to ensure that workers understand how to interpret and manage risks appropriately when such risks are emerging or occurring. Other measures include the efficacy of operations across the industry, including use of the defense-in-depth concept with multiple barriers. There are methods of proactively assessing barrier integrity, but measures from these methods are not always effectively reported or monitored. Lagging indicators of degrading barrier integrity over time can be estimated by empirical trends in loss of well control events, blowouts, fires, explosions, and with other available metrics collected and reported by BSEE, as described in Chapter 3.

Prior to the Macondo accident, equipment was generally tested to ensure compliance with regulations, as opposed to proactively testing to ensure good performance under all significant operating conditions and operating envelopes. Good practice in testing is based on a technical and safety assessment that determines what is required to effectively manage the risk of equipment not performing. It also needs to consider the current operating circumstances. Thus, the thinking was shallow, lacked systemic thinking and analysis, and focused primarily on compliance, though there were some better performers. In addition, there was apparent widespread practice of operating with single barriers that were not fully validated.

There have been significant increased regulatory requirements on testing and equipment improvements post-Macondo. Physical barriers are generally well defined, established, and understood across the oil and gas industry. These preventive barriers are routinely performance-tested in line with regulatory requirements and expectations and additional industry

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

standard requirements. The Well Control Rule and API Standard 53 were fully incorporated into regulations post-Macondo, which are significant changes. However, the testing regime is still primarily focused on the equipment and not on contingent barrier management (i.e., those barriers and control measures that require deliberate action and may be called into operation to mitigate the unwanted effects after an incident has begun).

The regulations do cover mandatory aspects of safety-critical and environmental systems management, BOPs, and casing designs and their integrity. In addition, professional engineers are required to sign off on planned cementing designs and other aspects of well design. However, regulations do not go beyond critical safety equipment where, for example, the requirement of a bowtie risk analysis might identify other significant barrier needs. Not all operators have fully identified contingent barriers and suitable testing regimes for these; thus, the integrity of contingent barriers is often not as strong as it needs to be.

Safety and environmentally critical equipment now has intensive testing and inspection requirements, some of which are witnessed and verified by BSEE. However, modern thinking on systemic risk focuses on the numbers of effective and diverse barriers and their integrity, and this is simply not reflected in the regulations except for general requirements such as SEMS. This calls into question whether the regulation fully addresses defense in depth and whether the regulator is, in reality, owning the operators’ risks though overly specified testing.

All of these observations, taken together and evaluated against the maturity model attributes, result in the committee’s judgment that, overall, the industry is at maturity Level 3.

Risk Element 12: Technology Enhancement

The offshore industry, particularly for deepwater wells, has long excelled in the development and application of technology for drilling and producing hydrocarbons reliably and safely. For this risk element, the committee evaluates how the industry is continuing to innovate in the development and application of technologies that can further enhance safety, risk management, and safety management. In particular, the committee’s interest is in how technology is being applied to human performance, human factors, and decision making to support improved systemic risk management and SMS.

Remote real-time monitoring (RRTM) has been widely implemented by the industry in response to requirements in the Well Control Rule (WCR), first proposed by BSEE in 2015 and revised since (see NASEM, 2016b). Prior to the issuance of this rule, some companies had pioneered the use of RRTM as early as the 1990s. Other processes, such as pipe

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

handling, have been automated to reduce risk and the exposure of people to risks. Operational data are captured on offshore rigs and platforms, and one area being explored by industry is data mining and analytics to support system monitoring and to develop tools for predictive maintenance. Based on experience in other industries, such as aviation, the learning curve to develop useful applications in this area can be long, but it is reasonable to expect that there is potential in the medium to long term for the industry to enhance warnings and guidance for decision making for the humans operating in risky contexts or potentially beyond the design capability of equipment.

In the era from the 1970s on, the industry has been intensely focused on technology. Some major companies at times spent $1 billion per year on technical services, technology development, and research and development across the entire oil and gas value chain. Some of this technology was to address the continuing challenges of the progress into increasingly deeper water depths and deeper subsurface objectives. This has resulted in many technology breakthroughs where the focus was on design and engineering to ensure the integrity and reliability of structures, facilities, and wells. This was demonstrated through the technical performance of these systems, the continually improving industry standards and requirements, and the resultant improved equipment, including safety-system equipment. Significant incidents resulting from engineering, technology, and design failures have been rare.

The regulators kept pace with some technology advancements by adding regulations to ensure requirements for integrity and safety of new designs such as floating structures via deepwater operations plan reviews and other processes, as well as direct requests to develop industry standards for new technical areas. Despite improving maturity levels in technology and the demonstrated good results in technical integrity and reliability of equipment, the development and application of technology to reduce systemic risk and manage systemic risk was maturing slowly.

The industry was using new technology to optimize and improve efficiency as well as equipment integrity. However, the focus was on individual pieces of equipment and not systems. This was reflected in industry standards and requirements being both prescriptive and focused on individual equipment, resulting in good technical standards developed on individual pieces of equipment, such as valves and production vessels, but not as much on the systems that would use them or technical system standards that could minimize systemic risk. This same observation was true for regulators and regulations. There were good regulations and requirements for relief valves, for example, but not for the risk management system of which they were part, and regulations addressed only some components in a safety and risk management system. In summary, there was a technology focus

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

on operational efficiency and operational optimization and not sufficiently on systems and systemic risk management.

There was also a widening gap in the ability to ensure the maintenance of and optimal operation of equipment in aging production systems and structures compared to the newer and deeper water systems. There have been little technology development efforts to enhance aging systems or to systematically consider when to adopt new technologies at these facilities.

Consider two specific technology areas pre-Macondo: automation and real-time monitoring.

Automation technology in the industry progressed steadily with progress in equipment and technology. However, much of this was focused on automatic control and/or remote control of individual pieces of equipment. This could be seen on drilling rigs that would have automated pickup or lay down of pipe, automatic pipe racking, and automatic pipe makeup via an “iron roughneck.” All of these pieces of equipment were supplied by different companies with different automation systems, and even though they handled the same pipe in the same process, they could not communicate with each other nor were they capable of doing so. This can also be seen in production where a production three-phase separator may have local automatic control not linked to the entire process system. Although this type of automation had a positive impact on safety, particularly in moving staff out of harm’s way, the focus was not on reducing systemic risk or collecting data to benefit an analysis of systemic risk. This was a result of some limitations in the technology but also due to an industry focus on optimization and efficiency including more uptime, less downtime, less nonproductive time, and so forth, and not as much on systems and system integration to manage risk and enhance safety.

Although there was a generally low level of focus on how automation could support systemic risk management, the availability of automated subsystems and systems targeted at operational efficiency and maintenance did improve safety in varying degrees.

The technology of RRTM, and particularly RRTM for drilling, was being advanced by a very few companies as early as the 1980s. A few more companies were collecting local data and a few companies were using RRTM with dedicated full-time staffed onshore centers in the early 2000s. There was a wide range of views on the value of RRTM for drilling in the industry, and some of this was related to how drilling operations should be managed. There was, however, a generally positive view of the value of RRTM for production operations.

RRTM for both drilling and production was focused primarily on efficiency and productivity, including maintenance optimization. As with automation, where RRTM was employed, monitoring and the collaboration between offshore and onshore teams did have safety benefits. But

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

prior to Macondo, full RRTM with dedicated onshore monitoring in drilling was in very limited use. Pre-Macondo, a few companies were leading in the application of this new technology and although safety might not have been the primary motivation for their development and use, the use of technology did have a positive impact on overall safety offshore (NASEM, 2016b).

There was, however, very little work specifically on automation and data collection and analysis for safety equipment systems. In many cases, both monitoring systems and automation alerted operating personnel, who then had the responsibility to make decisions and to act in response to the notification with appropriate intervention actions without the benefit of decision support or appropriately analyzed data. In addition, some companies would incorporate technology only to the extent that it was required in the regulations.

Since Macondo, the industry continues its strong technology focus on design and engineering that ensures integrity and reliability of structures, facilities, and wells, which contributes to overall safety. This has resulted in many technology breakthroughs and developments that are successfully addressing new industry challenges. This is demonstrated through the technical performance of systems and continually improving industry standards. As a result, significant incidents resulting from engineering, technology, and design failures have been rare.

The regulators also continue to require technology improvements and requirements as well as new industry standards based on their investigations, audits, and inspections. They continue to support new designs and equipment through review and oversite processes such as deepwater operations plans. Both the industry and the regulators have enhanced and continue to evaluate how to reduce technical risk. The use of technology to manage systemic risk has been addressed to a degree with the industry rewrite of API RP 75, Safety and Environmental Management Systems, Fourth Edition and BSEE’s risk-based inspections and SEMS audits.

Despite higher technology maturity in many aspects, the overall maturity progress in effectively utilizing technology to manage systemic risk and support SMS, human performance, and human factors has been slowed by a strong focus on using technology for operational efficiency and operational optimization. This is evident in three areas where industry is advancing and developing technology quickly: RRTM, automation, and utilizing operational data. Specifics of each technology follow.

Remote Real-Time Monitoring

Many operators and especially larger operators have made good progress in this technology by having remote onshore monitoring and control rooms

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

staffed on a regular basis. This is particularly true for production operations. The major focus of these systems is on uptime, maintenance optimization, and operational efficiency, but they do contribute to improved safety. In particular, safety improvement results from the real-time, team-based interactions and consultations between field operations and onshore technical experts. But the RRTM systems were not established or designed with a sufficient focus on monitoring and minimizing systemic risk. To advance the maturity and effectiveness of this technology in this regard, the RRTM system must specifically collect systemic risk data that are analyzed on a systems basis, provide real-time decision support, and display presentations that specifically help to actively manage and reduce systemic risk.

Although RRTM for drilling is similar in concept to those in production, the maturity of these systems relative to systemic risk is lower than with production monitoring. This is a result of significant variation among operators about how these systems should be deployed, utilized, and monitored. BSEE in its new “well control” regulation has required the use of these RRTM systems but only for certain well types. With the broad focus on developing and implementing drilling automation, the inclusion of RRTM to better manage systemic risk could be considered, including how RRTM could be leveraged by BSEE in improving their risk-based inspection program (NASEM, 2021, pp. 142-144). RRTM technology in drilling could also focus more on monitoring and analyzing systemic risk data and use this for decision support to reduce systemic risk.

Automation

Significant progress has been and continues to be made in automation technology in both drilling and production operations, and the technology is beginning to deliver full system automation. But there continues to be a strong focus on automation of individual subsystems and components, and again, automation technology continues with strong focus on optimization and efficiency. Automation does enhance safety, including removing staff from harm’s way, but the automation technology needs to focus more on systemic risk management support through appropriate risk data collection and analysis leading to risk decision support and potentially eliminating the need for certain decisions when appropriate.

Utilizing Operational Data

The maturity level of this technology relative to systemic risk management has progressed modestly. The industry captures operational data which are becoming increasingly available at remote locations through data-rich RRTM streams. There should be opportunities for utilizing these data for

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

automated systems monitoring, predictive maintenance, decision support, and separating people from risk. Progress in better managing systemic risk is limited by the technology specific for the energy industry but also by the lack of data relative to systemic risk. The availability and volume of systemic risk data need to be improved as well as clarity on what types of data can best be used to manage systemic risk.

The current maturity assessment of this risk element does not reflect the industry’s past success in developing and applying technology; it only focuses on whether the industry is appropriately taking into account technology that is available today or ready for development and adoption by the offshore industry and technology that can support systemic risk management. The overall assessment maturity of Level 3 reflects the increasing use of technology over the last decade and its positive impact on managing systemic risk but also reflects industry’s lack of a broad safety-focused effort with operational data and its limited use of advanced technology in safety management systems. Recognition can be given for the significant effort by some companies in utilizing RRTM systems as well as efforts to advance automation and condition-based maintenance.

Risk Control: Regulatory Environment

This risk control element considers the overall impact on systemic risk in the offshore operating environment that is due to actions by the offshore regulators. The primary regulator for offshore safety BSEE within the U.S. Department of the Interior, and also includes the U.S. Coast Guard, the Pipelines and Hazardous Materials Safety Administration within the U.S. Department of Transportation, and others.

Risk Element 13: Barrier Verification

This risk element refers to what BSEE has done to ensure that industry addresses barrier integrity through regulations, such as the WCR, and enforcement actions. Measures are the contents of regulations, revised industry standards incorporated into regulations, and the nature and extent of enforcement actions undertaken.

Prior to the Macondo accident, barrier management was very prescriptive and focused on PINCs, which are checklist-like items that BSEE inspects to promote safe operations on the Outer Continental Shelf. This list of inspection items is derived from all regulations for safety and environmental standards. Based on findings from the PINC list, BSEE issues Incidents of Noncompliance (INCs), which are then enforced through warnings and shut-ins. The regulatory focus in these inspections was on specific individual types of equipment and components and not on managing a

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

barrier system. Also prior to Macondo, SEMS was voluntary, and the new WCR was not in place.

Over the last decade, there has been overall improvement in how barrier integrity is reflected in the regulations, but not as much as there could be. The focus remains on prescriptive enforcement and not on managing barriers and systemic risk. In modern thinking, the focus would be on managing the barriers and stopping work to fix them when they are not performing following a determination and correction of the root causes of the failures rather than issuing INCs. (Impediments to BSEE overseeing safety in this context are discussed in Chapter 5.) BSEE has implemented regulations such as SEMS and the WCR, which have improved the management of barriers; however, SEMS lacks guidance on barrier management. The focus within BSEE has remained on INCs and noncompliance with a prescriptive set of regulations rather than holistic management of barriers and systemic root causes of barrier failures. The improvements over the last decade are reflected in an assessment of the current maturity for industry at Level 3.

Risk Element 14: Inspections

BSEE is required under federal law to inspect every offshore facility at least once per year regardless of the risk level assessment of offshore facilities. This has stretched the agency’s workforce at times, and its budget, because many of these trips require expensive travel by helicopter to many offshore rigs and production platforms. Helicopter travel time also limits the time available on facilities to carry out inspections. In addition to the annual inspection requirement, BSEE inspectors travel to inspect drilling rigs and to witness activities such as BOP tests.

More effective for evaluating industry vigilance in adhering to safe practices is the deterrence effect achieved through unannounced targeted inspections based on BSEE estimates of the risks related to a particular operator, contractor, or facility. The committee refers to these as risk-based inspections. Measures are the frequency and efficacy of routine inspections as well as risk-based inspections, and the maturity of the risk analyses on which they are based (NASEM, 2021).

Generally, pre-Macondo, there was not a formal program on risk-based inspections. In addition, there was a lack of using inspections as opportunities for the industry to learn. Inspections were about witnessing operations and tests by inspecting components against a list of PINCs and conforming to the need to inspect certain equipment. Inspections did not routinely focus on the system or how issues could be connected to human performance and human factors. Prescriptive inspections were being done to meet an annual inspection requirement for each platform or drilling rig.

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

The regulators now routinely undertake risk-based inspections in addition to the prescribed annual inspections of facilities, which is a significant step forward. Still, inspections generally are not perceived as learning and improvement opportunities. They primarily focus on compliance metrics and contraventions and there is a general lack of systematic thinking about how inspections can inform operating company leadership about weaknesses in the operators’ safety culture. If the operators were more effectively and fully managing and monitoring their own safety and environmental performance, it would ease the requirement for prescriptive inspections and enable richer learning and development. There are several recommendations on improving and modernizing the offshore oil and gas inspection regime in the National Academies (NASEM, 2021) report.

Inspectors must be sufficiently trained and competent in identifying issues associated with the elements of SEMS. Furthermore, inspectors need to have sufficient competence to be able to connect the dots of certain identified issues into systemic and underlying cause analysis. Facility inspections and SEMS elements audits, although separate exercises, should also be related to how people are working within the system, whether they understand what the expectations of them are and articulate that to the inspectors and auditors. These modernized inspections (e.g., risk based), could lead to further improvements beyond prescriptive enforcement and could have a better focus on barrier management and systemic risk management. There should be consideration of human factors and human performance in inspections and audits.

Maturity of this risk element is considered to be at Level 3, reflecting the overall improvements in the inspection process utilizing risk-based inspections and the fact that inspectors are beginning to ask questions related to SEMS elements. Much more could be done to improve the links between SEMS and the annual inspections, particularly in the training and competence of inspectors. One particularly notable aspect of inspections is that BSEE’s proactive efforts in risk-based and “blitz” inspections are at a higher level of maturity, Level 4, in that they further improve the inspection process and focus inspection resources on identified problems.

Risk Element 15: Worker Certification

Regulations can be used to set requirements for basic levels of safety education and training as well as certifications demonstrating competence. The committee evaluated BSEE’s regulations in this regard to assess the extent and merit of existing requirements.

Pre-Macondo, there was less regulatory focus on competency than is seen today. Training programs were developed by companies individually with no industry-wide agreement on standards. The regulator used a

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

“general duty” methodology that training should be adequate to ensure safety, with few specific requirements for or references to industry or other standards for the training or the trainers. Despite few industry standards and specific requirements, some companies did invest in training for their staff. This was more extensive for staff in safety-critical positions, and there were regulatory requirements for training for some of these positions. Also, as stated above, API RP 75 and SEMS were both voluntary pre-Macondo.

SEMS are now required and do include training as an element. In addition, the relevant regulation (30 CFR Part 250, Subpart O) requires that employees be trained to competently perform their assigned well control, deepwater well control, and production safety duties, and that operators must verify that employees understand and can perform the assigned well control, deepwater well control, and production safety duties. Within SEMS, however, there are only general references to a “trained workforce” and assurances that the contractor workforce is trained through various means, without requirements for specific levels of training, competence, or certifications.

Over the last decade, well control training in particular (which was required before) has greatly improved through industry effort and not by regulation. Generally lacking, though, is formal and specific guidance and competence requirements and frameworks for workers at all levels within industry (i.e., nonmanagers and managers) as well as within the regulatory agencies.

While there has been significant improvement since the Macondo incident, the overall maturity level is assessed as Level 3. BSEE is in a position to more actively encourage industry standards regarding training, certifications, and demonstrated competence. BSEE has written good regulations incorporating general language requiring that employees can perform safety-critical jobs. This forward thinking by BSEE as well as specific instances of individual companies’ implementing training that is focused on competence, such as with the utilization of modern drilling simulators and team-based training and testing, represents maturity of this element at Level 4.

SUMMARY AND CONCLUSIONS

This chapter has provided the committee’s judgment about the existing systemic risk profile and what has changed over the last decade. To arrive at its judgments, the committee developed a framework that looked at systemic risk based on individual risk elements that are grouped into three systems: People, specifically looking at culture and human resources, Human-Systems Integration, and Systems, with a focus on barriers and the regulatory environment.

The committee’s collective assessments of the risk elements were influenced by the maturity model concept, wherein the highest level of maturity

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

from a safety perspective is always evolving toward a higher standard. Thus, it is not expected that many companies have reached the most mature level. The industry is also highly variable, with a few companies mature in managing systemic risk and others at lower stages of maturity. The assessments for the risk elements reflect this heterogeneity.

Conclusion 4-1: The committee’s assessments of the 15 risk elements in its model cannot be aggregated into a single measure of the industry systemic risk profile, but it is possible to generalize from them and describe overall trends and gaps.

  1. A Culture That Supports Safety as it applies to systemic risk has three risk elements: Definition of a Culture That Supports Safety, Elements of a Culture That Supports Safety, and Assessment and Measurement of That Culture. The industry-wide assessments of maturity for these risk elements range from concerning, Level 2, to neutral, Level 3, within an industry with some companies that are actively supporting a culture of safety and are at Level 4, but many are not, or only lightly, engaged.
  2. Human Resources as a risk control has two risk elements, Education and Training and Worker Empowerment. Assessments of current maturity for these risk elements range from Level 2 to Level 3. There has been improvement over the last decade due in part to SEMS and its requirements around worker empowerment and stop-work authority; collaboration among companies with BSEE to improve and share reporting of near misses and incidents through SafeOCS; and improved industry training in well control.
  3. Human-Systems Integration is made up of four risk elements: Integrated System Design, SEMS Implementation, the use of Checklists, Procedures, and JSAs, and Behaviors. The industry assessments for these elements range from concerning, Level 2, to neutral, Level 3, while individual companies range from negative, Level 1, to good, Level 4. Improvements over time are primarily associated with the SEMS elements and training approaches. SEMS elements can be attributable to SEMS implementation maturing from a voluntary practice adopted by some operators to required implementation by all, with progress seen over time in the quality of implementation.
  4. Hardware and Design as risk control has three risk elements: Barrier Identification, Barrier Integrity, and Technology Enhancement such as RRTM, automation, and utilizing operational data. Current industry maturity assessments for these risk elements are at Level 2 and Level 3, which represents significant improvement over the last decade. The concerns illustrated in the current assessment are in two areas. There continues to be a focus on hazards and not
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
  1. barriers, and new technologies are not being consistently applied to help with managing risk and human factors. As with other risk control areas, there is variation across industry with some very positive, Level 4, performers and some strongly negative, Level 1, performers. Relatively little progress has occurred in implementing advanced technologies such as automation and utilizing data to specifically assist industry in systemic risk management, and industry and SEMS lack guidance and good practices for ensuring barrier integrity that depend on human intervention and management.
  2. Regulatory Environment as a mechanism for risk control has three risk elements: requirements for Barrier Verification, Inspections; and requirements for Worker Certification. Current maturity assessments are generally neutral, Level 3, with some operators at Level 4 that are building on SEMS to exceed requirements. Although SEMS are in place and being implemented more effectively over time, both SEMS and RP 75 nonetheless lack reference to modern process safety barrier concepts, including contingent barrier management. The maturity of BSEE’s inspection regime is assessed as mostly neutral, but with some positive indicators such as implementing risk-based inspections. Improvements over the past decade are due to heightened regulatory requirements around well control and production safety systems and BSEE’s development and implementation of a more formal system of risk-based inspections. Even so, there has been little improvement in testing for and demonstrating worker competence in safety-critical tasks.

Conclusion 4-2: Based on the committee’s evaluation and judgment of industry maturity for the risk elements, our assessment is that industrywide performance in systemic risk management has improved over time, but much additional work is needed to move more of industry, as well as government oversight, to a more mature level.

  1. Industry technical and equipment standards have long provided a foundation for safety since the hardware that offshore operations depend on rarely fails when maintained and used within design and operating assumptions. Use of more modern concepts of process safety, and application of human factors standards to procedures and design of jobs, is expanding though far from complete.
  2. Adoption and use of SEMS are maturing over time by both BSEE and industry.
  3. Industry development and sharing of safety indicator data, as supported by the collaboration of companies representing more than 90 percent of production in in SafeOCS and participation of companies in COS representing more than 60 percent of offshore
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
  1. operations, are important and valuable developments in identifying and managing systemic risk.

Conclusion 4-3: Further improvements in systemic risk management since Macondo are limited by several gaps:

  1. Industry has yet to embrace the value and importance of instilling a culture that supports safety across the entire industry.
  2. SEMS regulations, and industry generally, lack guidance on contingent barrier management aspects of process safety and use of human factors standards.
  3. Despite the fact that contractors now carry out 80 percent of the work offshore, BSEE’s authority extends only directly to operators. This violates good practice in safety of placing responsibility for safety management directly on the creator of the risk. However, SEMS regulations do require operators to ensure that their contractors’ workforces can carry out their duties safely. Some operators have good practices for integrating their SEMS systems across the systems and practices of their contractors.
  4. SEMS regulations have general requirements for workforce training and competence but lack specific requirements for competency. Moreover, the general requirements do not specifically identify nontechnical skills important for effective teamwork of identifying, communicating, and managing hazards during operations. Such training for well control is available through IADC.
  5. Whereas industry has an exemplary record for developing technologies to enhance efficiency, it has not yet taken full advantage of adapting available technologies in areas such as RRTM, automation, and data utilization to enhance safety and systemic risk management.
  6. Best practices in the development and use of checklists, procedures, and JSAs to enhance situation awareness and engagement during operations used in other safety-critical industries has received scant attention.
  7. Application of available human factors standards in the development of procedures, and engagement of the workforce in the development and revision of procedures, is not robust.
  8. Participation in SafeOCS and COS falls short of including the entire industry.

Conclusion 4-4: A model of systemic risk that recognizes the overall risk profile as a sum of its parts is important for understanding the current state as well as progress made in improving the risk profile. Future improvements in the risk profile of offshore energy operations will be the result of concerted effort by operators and regulators to

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×

address shortcomings of individual risk elements with specific actions and programs. Addressing the individual risk elements and improving industry’s maturity level with respect to them will result in an overall improvement in the systemic risk profile for offshore energy operations.

REFERENCES

BSEE (Bureau of Safety and Environmental Enforcement). 2020. SEMS Successes, Challenges and Recommendations Based on Analysis of 3rd Round SEMS Audit Results and SEMS Corrective Actions. https://www.bsee.gov/sites/bsee.gov/files/analysis-of-sems-audit-reports-october-20-2020.pdf.

COS (Center for Offshore Safety). 2018. Guidelines for a Robust Safety Culture. centerfor offshoresafety.org/-/media/COS/COSReboot/SEMS%20Good%20Practices/COS-3-04%20Guidelines%20for%20a%20Robust%20Safety%20Culture%20First%20Edition.pdf.

COS. 2021. 2020 Annual Performance Report. https://www.centerforoffshoresafety.org/Guidelines-and-Reports/Annual%20Report/Past%20Annual%20Reports.

CSB (Chemical Safety and Hazard Investigation Board). 2016. Investigative Report: Drilling Rig Explosion and Fire at the Macondo Well, Volume III, pp. 66-81. https://www.csb.gov/macondo-blowout-and-explosion.

Endsley, M. R. 1995. Toward a theory of situation awareness in dynamic systems. Human Factors 37(1):32-64.

Gawande, A. 2009. The Checklist Manifesto: How to Get Things Right, 1st ed. Metropolitan Books, New York.

Hudson, P. 2007. Implementing a safety culture in a major multi-national. Safety Science 45(6):697-722.

Hyne, N. J. 2019. Petroleum Geology, Exploration, Drilling, and Production, 4th ed. PennWell Books.

IOGP (International Association of Oil & Gas Producers). 2016. Standardization of Barrier Definitions. Report 544. https://www.iogp.org/bookstore/product/standardization-of-barrier-definitions.

Knode, T. 2020. A new way of looking at safety culture maturity models—The lens of employee engagement. Paper presented at the SPE Annual Technical Conference and Exhibition, Virtual, October. Paper No. SPE-201259-MS. https://doi.org/10.2118/201259-MS.

NASEM (National Academies of Sciences, Engineering, and Medicine). 2016a. TRB Special Report 321: Strengthening the Safety Culture of the Offshore Oil and Gas Industry. The National Academies Press, Washington, DC. https://doi.org/10.17226/23524.

NASEM. 2016b. TRB Special Report 322: Application of Remote Real-Time Monitoring to Offshore Oil and Gas Operations. The National Academies Press, Washington, DC. https://doi.org/10.17226/23499.

NASEM. 2021. TRB Special Report 338: Modernizing the U.S. Offshore Oil and Gas Inspection Program for Increased Agility and Safety Vigilance. The National Academies Press, Washington, DC. https://doi.org/10.17226/26095.

Peres, S. C., A. Smith, and F. Sasangohar. 2020. Worker-centered investigation of issues with procedural systems: Findings from interviews with a representative sample of workers in high-risk process industries. Journal of Loss Prevention in the Process Industries 67:104264. https://doi.org/10.1016/j.jlp.2020.104264.

Schein, E. 2010. Organizational Culture and Leadership, 4th ed. Jossey-Bass, San Francisco, CA.

Weick, K., and K. Sutcliffe. 2015. Managing the Unexpected: Sustained Performance in a Complex World, 3rd ed. John Wiley & Sons, Hoboken, NJ.

Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 97
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 98
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 99
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 100
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 101
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 102
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 103
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 104
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 105
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 106
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 107
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 108
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 109
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 110
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 111
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 112
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 113
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 114
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 115
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 116
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 117
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 118
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 119
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 120
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 121
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 122
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 123
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 124
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 125
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 126
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 127
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 128
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 129
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 130
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 131
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 132
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 133
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 134
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 135
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 136
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 137
Suggested Citation:"4 A Model for Assessing Industry Risk Profile." National Academies of Sciences, Engineering, and Medicine. 2023. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout. Washington, DC: The National Academies Press. doi: 10.17226/26873.
×
Page 138
Next: 5 Incentives of the Offshore Oil and Gas Industry Regulatory Structure »
Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout Get This Book
×
 Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout
Buy Paperback | $25.00 Buy Ebook | $20.99
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

Most of the offshore oil and gas industry in the Gulf of Mexico has shown considerable improvement in systemic risk management, which is now approaching a middle stage of maturity across most risk elements. Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico: Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout assesses both industry and regulatory progress against the reforms that were recommended following the Deepwater Horizon disaster in 2010. The report also states that progress has been uneven, and critical gaps remain in comprehensively addressing the management of systemic risk offshore.

READ FREE ONLINE

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    Switch between the Original Pages, where you can read the report as it appeared in print, and Text Pages for the web version, where you can highlight and search the text.

    « Back Next »
  6. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  7. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  8. ×

    View our suggested citation for this chapter.

    « Back Next »
  9. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!