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 (2023) / Chapter Skim
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2 Changes in Offshore Safety Since 2010
2 Changes in Offshore Safety Since 2010
Pages 39-72
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From page 39... ...
The second section discusses other safety changes as well as responses to several key recommendations from major reports that were intended to reduce systemic risks and the extent 39
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From page 40... ...
Rather than attempt to address whether all of the recommendations have been adopted, the committee chose to focus on the major crosscutting themes that address systemic risk. Unless otherwise cited, this chapter is based on findings and recommendations made in the independent reports by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling (National Commission, 2011)
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From page 41... ...
Safety Management System Rules Shortly after the Macondo Well blowout and explosion, BSEE's predecessor, MMS, pushed through the first SEMS rule, which required the offshore oil and gas industry to implement SEMS as contained in American Petroleum Institute (API) Recommended Practice 75, Third Edition (API RP 75)
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From page 42... ...
There are advantages and disadvantages in either approach; the important development for offshore safety is that there now is a certified, independent audit process in place. The 2012 TRB report committee also recommended that BSEE conduct its own audits by BSEE staff whenever warranted and that it hire qualified and certified auditors for this purpose.
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From page 43... ...
The 2018 revisions also incorporated 12 updated industry standards by reference. Improved Safety Incident Data Several reports following Macondo emphasized the importance of greatly improving the reporting and availability of industry-wide safety indicator data based on reporting of safety incidents free of fear of recrimination and whistleblower protection.
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The paths that the offshore industry and BSEE have taken is to (a) create the voluntary pooling of sensitive company data for analysis by companies participating in the Center for Offshore Safety (COS)
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. Center for Offshore Safety As encouraged by the National Commission, the offshore oil and gas industry created COS, which is devoted to improving the safety of offshore oil and gas operations and is funded by member organizations.
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From page 46... ...
Moreover, COS has dropped its previously significant annual membership fee to a nominal amount, which has brought in new members, particularly smaller independent companies, who are actively participating in COS safety committees, safety forums, and safety summits. COS has been enhancing safety management by defining measures of safety practice, sharing and discussing leading indicator data among companies, monitoring trends, preparing guidance documents, and publishing an annual report summarizing the safety measures collected and shared by its members.
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From page 47... ...
Other Safety Improvements In addition to the broad reforms discussed above, several proactive initiatives by the Society of Petroleum Engineers (SPE) and other industry associations illustrate the increased willingness of individuals in industry since Macondo to work across organizational and association lines to focus on and enhance systemic risk awareness and management through data collection and sharing, R&D, and technology development for training.
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From page 48... ...
. Illustrating an awareness of the breadth of issues to be addressed in im proving systemic risk management, the topics spanned automa tion; crew resource management; leadership training; individual competency in barrier management; development and applica tion of key performance indicators; personal engagement and accountability; safety data collection and analytics; equipment performance and reliability assessment and predictive indicators; improved reliability of pore pressure and fracture gradient sen sors and estimates; improved hazard assessment and kick detec tion; reliability of maintenance and testing activities, and many others.
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From page 49... ...
We point out such details in the text that follows. Funding for Regulators from Leasing Revenues The National Commission and others recommended that federal offshore regulators, including BSEE, the U.S.
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offshore industry safety culture addressed what industry and regulators could do together to raise the companies with cultures unsupportive of safety to that of the industry's exemplary companies with cultures that support safety (NASEM, 2016)
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From page 51... ...
However, COS issued a safety culture guidance document, has committed significant resources to supplement the ongoing safety culture research being supported by GRP, and its many collaborative industry safety efforts can foster company cultures that support safety. Although the offshore industry does have operators and contractors with deep commitments to safety and exemplary occupational safety programs, apparently the industry's concerns about litigiousness and potential liability preclude the kind of information sharing, collaboration, and leadership seen in aviation, nuclear power, and other sectors that have achieved positive results through strong and abiding industry-wide commitments to a culture that supports safety.
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From page 52... ...
Other Major Report Recommendations Not Broadly Adopted A number of post-Macondo reports point out failures of organizational management and cultures unsupportive of safety as root causes of the Deepwater Horizon disaster and that are at the nexus of systemic risk as the committee has defined it. Indeed, most industrial disasters trace to failures of organizational culture and human management of, or interaction with, technology rather than the technology itself.
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From page 53... ...
3) notes the complexities and interdependencies of offshore drilling; the variabilities in human performance; the tendency toward orga nizational drift or normalization of deviance that can, over time, move away from the originally intended safety process, behaviors, and goals; and the important role of management in reducing the errors that contribute to most major accidents.
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From page 54... ...
Among other recommendations, ABS also recommended incorporating the ALARP concept into SEMS, developing KPIs for process safety, and providing barrier performance management guidance in SEMS regulations or RP 75. The following sections describe the recommendations not adopted that are designed to address these risks and the implications this has for the industry systemic risk profile.
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From page 55... ...
. Safety-Case Approach The UK safety-case approach relies on a requirement that the entity responsible for safety, which is usually the operator but can be the drilling contractor, prepare a site-specific analysis of the anticipated hazards of drilling and how the risk of a major accident will be controlled to reduce risks to the ALARP level.
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From page 56... ...
. An argument can be made that, in practice, BSEE's full approach to offshore safety is more similar to the safety case than it might first appear.
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From page 57... ...
Although SEMS are carried out by some companies as a compliance exercise (as the third round of SEMS audits implies) , if the principles and processes behind SEMS are adopted by operators in the proper spirit, combined with BSEE's review of technical plans and collaboration with industry to identify better approaches, it could drive down the risk of major accidents.
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19) notes that HSE views ALARP as being achieved by implementing current good practice, which includes compliance with consensus industry standards, as discussed below.
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From page 59... ...
Use in Practice If Not in Name An argument can be made that, even without use of the specific name, the ALARP concept has long pervaded API standards and BSEE safety regulatory oversight. HSE guidance on ALARP simply says that acceptable risk should always be achieved and that it can usually be determined, qualitatively, based on whether the company in question is proposing to follow accepted good practice.8 HSE describes good practice as follows: "Good practice" is defined in the general ALARP guidance9 as "those stan dards for controlling risk that HSE has judged and recognised as satisfying 8 HSE also acknowledges that when good practice does not exist, such as when a new technology is introduced, more quantitative estimates of risk reduction may be required.
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From page 60... ...
had long had extensive requirements for hazard analysis that are based on API standards, recommended practices, and other guidance that achieve the lowest practicable risk when followed. The offshore industry has been carrying out hazard analysis and avoiding major accidents for many years, albeit with the significant and entirely preventable example of Macondo.
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From page 61... ...
. Although use of ALARP in the North Sea has also been oriented around technology, use of the ALARP concept also covers operations, policies, processes, and any technology that would reduce risk without imposing disproportionate costs.
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Is the Recommended Use of ALARP Targeted to Root Causes of Catastrophes? Arguably, ABS's and CSB's recommendations to incorporate the ALARP concept are intended to address human factors and organizational and management failures that contribute to the causes of major accidents.
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From page 63... ...
BSEE could use the ALARP concept to argue that "good practice" in SEMS implementation ought to include the ABS recommendation to amend RP 75 to incorporate guidance on human factors and barrier management in order to reduce risks to the ALARP level and could require inspectors and SEMS auditors to ensure that it is being followed.
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From page 64... ...
Process Safety and SEMS Three major post-Macondo reports make recommendations about increasing the offshore industry's focus on reducing the risk of major accidents.
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Many of BSEE's regulations and offshore industry standards were developed before the modern concepts of process safety management (PSM) were recognized and began to be adopted by the upstream oil and gas industry.
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From page 66... ...
SEMS has not been amended as recommended by CSB and ABS, but it is important to recognize that the focus of process safety on avoiding major accidents can and should be an important component of any SEMS plan, which is meant to cover both occupational and major accident (process safety) risk.
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From page 67... ...
Many contractors have their own safety policies and practices, including SEMS, and most operators have bridging documents that align their SEMS with the safety policies and practices of their contractors. Even so, given that the most hazardous tasks being undertaken offshore are being 17 BSEE's lack of authority requiring contractors to implement SEMS is supported by the following two court cases: (1)
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From page 68... ...
After providing significant leadership on this issue in the 2012-2016 period by developing and publishing a set of safety culture principles and encouraging industry adoption of them, it's not apparent that BSEE has focused on this area since then. Conclusion 2-3: The National Commission, among others, recom mended that the United States adopt the safety-case approach in use by North Sea nations as well as Australia and Canada.
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From page 69... ...
However, the ALARP concept has not been explicitly followed for operational practices, nor is it explicitly referenced in official SEMS guidance. Conclusion 2-5: In general, the development and execution of technol ogy offshore for oil and gas exploration and production on the OCS have been exceptional.
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(Such training is available through IADC.) SEMS, of course, is general enough that process safety, barrier management, and application of human-systems integration methodologies (including human factors standards)
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From page 71... ...
Federal Register 87:56354-56365. Chief Counsel, National Commission on the BP Deepwater Horizon Offshore Oil Spill and Offshore Drilling.
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2012. TRB Special Report 309: Evaluating the Ef fectiveness of Offshore Safety and Environmental Management Systems.
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