Modernizing the U.S. Offshore Oil and Gas Inspection Program for Increased Agility and Safety Vigilance (2021) / Chapter Skim
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3 Role of the Regulator in Overseeing Offshore Oil and Gas Operations
3 Role of the Regulator in Overseeing Offshore Oil and Gas Operations
Pages 59-110
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role in overseeing these offshore operations. The chapter begins by reviewing the Outer Continental Shelf Lands Act (OCSLA)
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states that lease holders "maintain all places of employment within the lease area or within the area covered by such permit in compliance with occupational safety and health standards and, in addition, free from recognized hazards to employees of the lease holder or permit holder or of any contractor or subcontractor." OCSLA mandates the use of Best Available and Safest Technology (BAST) on all new drilling and production operations, "wherever practicable" and "economically feasible." BSEE has developed a three-stage process4 for identifying candidate technologies for BAST determinations, and BSEE recently initiated an annual evaluation process to assess critical safety barriers used in drilling operations and production operations to determine if certain currently used equipment meets the definition.
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(1) of this title, the Secretary, and the Secretary of the Department in which the Coast Guard is operating, shall require, on all new drilling and production operations and, wherever practicable, on existing operations, the use of the best available and safest technologies which the Secretary determines to be economically feasible, wherever failure of equipment would have a significant effect on safety, health, or the environment, except where the Secretary determines that the incremental benefits are clearly insufficient to justify the incremental costs of utilizing such technologies.
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Organization and Budget BSEE,5 headquartered in the Washington, DC, area, sets policy through its six national programs,6 but those policies are implemented and the agency's inspection work occurs in one of three geographic regions -- the Gulf of Mexico (GOM) , the Pacific, and Alaska.7 The GOM region is divided into five districts: New Orleans, Houma, Lafayette, Lake Charles, and Lake Jackson (see Figure 3-1)
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, provide the framework for BSEE to implement its offshore inspection program. For example, USCG regulations cover the safety of vessels -- such as mobile drilling rigs and floating platforms -- and include issues such as seaworthiness and evacuation and fire protection capacity.
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In its current form, BSEE has jurisdiction over the safe and responsible exploration, development, and production of offshore energy resources, which it implements through a comprehensive program of permitting, regulations, compliance monitoring and enforcement, technical assessments, inspections, preparedness activities, and incident investigations.13 The next section discusses BSEE's regulatory framework under 30 CFR Chapter II that the agency uses to enforce safety and environmental regulations. 30 CFR Chapter II -- Bureau of Safety and Environmental Enforcement BSEE regulates all phases of oil and gas operations on the OCS with the rules contained in 30 CFR Chapter II (Bureau of Safety and Environmental Enforcement, U.S.
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Such BSEE requirements target specific aspects of an ultimate problem in oil and gas operations and have been characterized as "micro level" (TRB 2018)
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. The next section discusses BSEE's safety management system requirements found under SEMS.
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• • • • • • • • Office PINCs (G, E, D, C, W, A, • • • • • • • • B, P, L, R, M, O) NOTE: BSEE = Bureau of Safety and Environmental Enforcement; PINC = Potential Incident of Noncompliance; USCG = U.S.
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(6) Safe Work Practices (see § 250.1914)
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OCSLA mandates that BSEE implement and enforce offshore safety and environmental regulations and conduct both an annual scheduled inspection and periodic unscheduled (unannounced) inspections of all oil and gas operations on the OCS; BSEE also investigates incidents and oversees industry spill preparedness.25 This section describes information about BSEE's inspection workforce including staffing levels, experience, and allocated budgets.
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. Still, over the past 8 years, the average age of an inspector has remained around 45 years old.28 More than three-fourths of all inspection personnel are stationed in the GOM region, with each GOM district office grouped by well operations and production operations (see Figure 3-3)
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a GOM region FY2016 ($33.7 million) helicopter contract was funded in FY2015.
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72 FIGURE 3-2 Distribution of the number of inspectors and years in service.
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* = supervisory engineers who oversee well and production operations; *
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Ops. Supervisory Engineers 1 1 1 1 1 1 1 1 1 1 Senior Engineers 6 2 2 1 4 2 3 2 3 2 Field Engineers 3 1v 4 2 1 2 1 1 1v 0 Supervisory Inspectors 1 2 1 2 1 1 1 1 1 1 Inspectors 7 16+2v 5+2v 16 6 14 4 11 5 9 TOTALS 47 42 38 31 30 NOTE: BSEE = Bureau of Safety and Environmental Enforcement; GOM = Gulf of Mexico; Ops.
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Department of the Interior.35 In 2018, BSEE had received a report from Booz Allen Hamilton (BAH) that studied the agency's current training program, reviewed similar programs at the federal level, and identified options and considerations that would allow BSEE to build a more comprehensive and consistent Talent Development Model for its inspectors.
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To date, BSEE's training program continues to transform and is still considered a work in progress.40 Inspections by Activity Type Using multidiscipline teams typically ranging from two to four people, BSEE conducts regular safety and environmental inspections of offshore drilling rigs and production facilities and inspects equipment and control systems for well operations and production operations. Enforcement begins with the review of relevant paperwork.
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Inspections for well and production operations have been consistent over the past 8 years, while pipeline inspections have increased dramatically over the same period. Typically, meter inspections are done to ensure the accuracy of the meters used to determine royalty payments and are not considered safety inspections.
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a Although included in the table, meter inspections are typically done to ensure the accuracy of the meters used to determine royalty payments and are not considered safety inspections. SOURCE: Data provided by BSEE, December 2020.
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Table 3-5 shows the percentage of all annual inspections conducted by each region. The GOM region conducts more than 90 percent of all annual inspections, whereas the Pacific and Alaska regions conduct a much smaller percentage.
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80 TABLE 3-5 Percentage of BSEE Annual Inspections Conducted on the U.S. OCS by Region Region 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 GOM 91.14% 88.35% 88.95% 89.02% 89.26% 91.06% 92.03% 93.16% 92.95% 91.89% 92.99% Pacific 8.82% 11.63% 10.99% 9.81% 10.70% 8.89% 6.44% 6.74% 6.81% 7.65% 6.50% Alaska 0.04% 0.03% 0.06% 1.17% 0.03% 0.05% 1.53% 0.10% 0.24% 0.46% 0.51% NOTE: BSEE = Bureau of Safety and Environmental Enforcement; GOM = Gulf of Mexico; OCS = Outer Continental Shelf.
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to identify potential gaps in resources required to perform Red List and White List requirements. An annual inspection plan includes all three inspection tiers (Red, White, and Blue Lists)
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Given the amount of activity in the GOM, its Annual Inspection Plan presents more detail and outlines the projected mandatory, required, and nonmandatory inspections and investigations for both well operations and production operations under the Office of District Field Operations. The plan ensures that all mandatory items are accomplished, but also identifies and describes additional regional inspections deemed important based on risk analysis.
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The OSM will then follow up with the operator to verify that the CAP issues were completed. This tracking activity occurs outside the annual inspection process, although the OSM does share some findings at a GOM monthly meeting if it determines that a SEMS issue should filter down to inspectors in the field.56 The OSM briefed the committee that it can include findings and deficiencies from SEMS audits as part of an operator's profile when it targets and conducts an RBI (discussed below)
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In addition to Subpart O audits, the OSM has piloted the use of a "safety culture" or safety management form (see Box 3-4) that can be used during inspections.
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In addition, directed audits could be used to verify that CAPs were completed appropriately and validate that the actions effectively addressed identified gaps. Incident Reviews Inspection Violations As noted above, a large part of BSEE's safety inspection program is to conduct announced and unannounced inspections every year to meet the agency's statutory mandates and regional requirements and to perform inspections on behalf of other agencies.
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81 142 101 95 95 131 88 82 66 27 54 M PINCs (Production Measurement and Site Security) 128 167 170 168 256 438 182 174 151 52 45 P PINCs (Production Operations)
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This particular indicator, for example, evaluates an operator's compliance for production operations, by looking at a ratio of the number of INCs issued to the number of components inspected. For well operations, INCs are compared to individual rig inspections, and not components.
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District investigation reports are posted on the BSEE website.68 Risk-Based Inspection Program As early as 2008, BSEE (MMS at the time) initiated a risk-based program in two districts (Houma and Lake Jackson District)
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Each RBI component is a tiered approach that builds on and supplements BSEE's annual inspection programs (see Figure 3-4) for well and production operations.71 When identifying facilities for each RBI component, BSEE uses a quantitative risk metric and incorporates other qualitative risk factors, such as past inspection performance and operator profiles (e.g., SEMS data, changes in ownership, etc.)
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Platform characteristics included the component count, the slot count, and whether a complex was considered "major."72 Inspection performance values included whether a platform had an incident 2 years prior and whether it had an INC or incident in the previous year. The likelihood of a future incident used an equation with five variables with a value of either 0 or 1, if the complex had the characteristic.
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How the results of the ANL model are used in the RBI flow process is explained TABLE 3-8 Example of Results from BSEE ANL Risk Metric Model Complex ID Variable Description 1 2 3 4 Imaj Major Complex • • Islot Slot Count ≥15 • • Iinc1 INC in Previous Year • Iincid1 Incident in Previous Year • • Iincid2 Incident • ncomp Component Count 150 45 17 0 R Risk Metric 600 90 17 2 NOTE: ANL = Argonne National Laboratory; BSEE = Bureau of Safety and Environmental Enforcement; INC = Incident of Noncompliance.
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target high-consequence, low-frequency events at a unique facility -- including both well and production operations. The OSM receives output from the ANL Risk Model, which identifies and ranks the top 25 percent of GOM platforms by their relative-risk metric.
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FIGURE 3-5 Facility-based risk inspection process flow. NOTE: ANL = Argonne National Laboratory; BSEE = Bureau of Safety and Environmental Enforcement; FBRI = Facility-Based Risk Inspection; GOM = Gulf of Mexico; INC = Incident of Noncompliance; OSM = Office of Safety Management.
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For example, BSEE conducted PBRIs on 67 facilities in 2018 and 57 facilities in 2019. According to the BID Number 2018-033G, BSEE personnel are also instructed to assess effectiveness of an operator's SEMS "by witnessing the application of safety management principle/processes applied to ongoing operations," to evaluate the operator's "understanding of risk and critical risk management principles associated with gas releases." After the offshore PBRI, the OSM conducts follow-up reviews in the office of two to three facilities in each GOM district.
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FIGURE 3-6 Performance-based risk inspections process flow. NOTE: ANL = Argonne National Laboratory; BSEE = Bureau of Safety and Environmental Enforcement; GOM = Gulf of Mexico; INC = Incident of Noncompliance; OSM = Office of Safety Management; PBRI = Performance-Based Risk Inspection; SEMS = Safety and Environmental Management System.
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To help disseminate these trends, OSM holds a monthly meeting with GOM inspectors75 where they consider risk factors of operators and any safety issues and trends that may warrant an increased inspection focus. Specific risk factors discussed include safety concerns such as INCs resulting in a shut-in enforcement action or identified for civil penalty review, operators on the IOL or facilities with a poor performance history, CAP issues noted from SEMS audits, higher INC-to-component ratios, operator financial issues, and uncorrected or failure to correct INCs.
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SOURCE: www.bsee.gov. Recent Initiatives Since the Deepwater Horizon incident, BSEE has initiated several programs that are intended to collect new data, analyze existing data, or make the review of records more efficient.
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Mandatory reporting of equipment failures, including critical safety equipment failure in drilling and nondrill ing operations.83 • Safety and Pollution Prevention Equipment. Mandatory reporting of critical safety equipment failures in production operations.84 • Industry Safety Data.
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The vital statistics program will allow for more data analysis and discovery measures and will produce measures in the following seven focus areas: Lease Life Cycle Activities; Permitting; Environmental Stewardship; Inspections; Incidents and Investigations; Technical Resources; and Human Resources.88 eRecords Initiative Historically, inspectors have spent a significant portion of their time offshore reviewing records rather than conducting physical inspections. To help increase the time spent on physical inspections, BSEE initiated a process that allowed inspectors to review some records electronically before flying offshore.
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PINCs" or "Z-PINCs."91 In addition to conducting safety inspections for the USCG, BSEE has established other Memoranda of Agreement (MOAs) with the USCG that involve cooperation and coordination of inspection duties, such as MOA OCS-07, which promotes and encourages consistent oversight of and cooperation between BSEE's SEMS and USCG's safety management systems (SMSs)
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Inspection scheduling uses this tool in conjunction with other information sources.94 As part of its annual inspection plan, BSEE announced that it intends to use the USCG's risk analysis methodology to conduct joint inspections on platforms for both well and production operations that are identified as highest risk. Alternate Compliance Program (ACP)
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Risk factors assessed include elements such as vessel detentions (for both Port and Flag State) , vessel-related marine casualties, marine violations/enforcement, documented major nonconformities issued under the International Safety Management (ISM)
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.pdf. 106 In accordance with 33 CFR § 96.120, objective evidence is any quantitative or qualita tive information, records, or statements of fact pertaining to safety or to the existence and implementation of a safety management system element.
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The CER is responsible for petroleum exploration and production activities in various other areas, including but not limited to submarine areas (not within a province) in the internal waters of Canada and the outer continental shelf (excluding areas under the sole jurisdiction of the C-NLOPB or CNSOPB)
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. The UK HSE achieves its objectives across the offshore oil and gas industry through safety case assessments,113 inspection of installations, noncompliance identification, incident investigations, and formal enforcement when necessary.
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The agency's overall goal is to establish expectations for industry members across the petroleum sector, which maintain a high standard for health, safety, the environment, and emergency preparedness. The regulatory regime applies to offshore installations and exploration and production operations, as well as to their associated onshore processing facilities and refineries.
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SUMMARY The current interpretation of OCSLA requires BSEE to implement and enforce offshore safety and environmental regulations and to arrange both an annual scheduled inspection and periodic unscheduled (unannounced) inspections of all oil and gas operations on the OCS, and BSEE also investigates incidents and oversees industry spill preparedness.
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In March 2018, BSEE's GOM region implemented a formal RBI program that supplements its current annual inspection program. Consisting of FBRIs and PBRIs, the RBI program employs a quantitative model and subjective performance and risk information to identify facilities with higher risk profiles so that BSEE can focus the appropriate resources.
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For these regulators to assess an operator's SMS program during inspections or incident investigations requires personnel who have operational and specialist backgrounds and a strong understanding of offshore operations and their associated risks. These are the personnel responsible for confirming that an operator's safety management program follows professional standards and well-established practices for identifying, assessing, and mitigating risks.
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