Nick Snow
OGJ Washington Editor
WASHINGTON, DC, June 23 -- The US offshore oil and gas industry drilled thousands of wells safely before BP PLC’s Macondo well blew out on Apr. 20 with impressive technology that can be improved further, experts told a US House subcommittee on June 23. Making certain that crews are properly qualified to make the right decisions will be equally important, they added.
“Deepwater offshore exploration and production is challenging in many respects. Each prospect is full of unknowns, and the industry must be prepared for the worst. Its tool kit is vast but it has not kept up with the challenges,” said James M. Pappas, vice-president for technical programs at the Research Partnership to Secure Energy for America (RPSEA), in his written testimony to the House Committee on Science and Technology’s Energy and Environment subcommittee.
Pappas recommended an approach that studies possible outcomes, plans and prepares people, contains the proper amount of safety features and methods to employ them, sets responsible oversight and regulations, and is available for all to use in safely developing US oil and gas in an environmentally responsible manner.
RPSEA is a public-private partnership formed under the 2005 Energy Policy Act that performs research and development about unconventional onshore gas and other US oil and gas resources as well as the ultradeep water, primarily for smaller producers, Pappas said.
“Clearly, no one expected this incident to happen. The US offshore drilling industry had an extraordinary safety record prior to its occurrence,” Pappas said, adding, “Quite appropriately, the incident has resulted in everyone reflecting, refocusing, and rethinking the importance of offshore production, as well as the research required to ensure the safe and environmentally sound production of these precious resources.”
Highly regulated
Citing a May statement by US Interior Sec. Ken Salazar that the offshore industry is highly regulated, Erik Milito, upstream director at the American Petroleum Institute, noted that existing federal requirements include 27 statutory authorities, 88 federal regulatory code parts, and 24 significant approvals and permits.
“However, our industry’s top priority is to provide energy in a safe, technologically sound and environmentally responsible manner, and we therefore take seriously our responsibility to work in cooperation with government to develop practices and equipment that improve the operational and regulatory process across the board,” Milito said. “We, therefore, support the government’s ongoing review of the incident and the existing systems in place and industry will take the necessary steps to prevent accidents like this from occurring again.”
Milito said API has developed voluntary standards and practices for nearly 90 years, with more than 500 recommended practices, specifications, codes, technical publications, reports, and studies covering all aspects of the industry, including 240 specifically addressing exploration and production.
“API’s standards are frequently referenced in federal regulations because they are recognized to be industry best practices,” Milito said, adding that the US Minerals Management Service cites 78 API standards in its offshore regulations. Overall, nearly 100 API standards are referenced in more than 270 citations by the US Environmental Protection Agency, the US Department of Transportation, the Occupational Safety and Health Administration, and other federal regulatory agencies in addition to MMS, he indicated.
API also has a separate industry quality program, established in 1924, which provides for the consistent and reliable manufacturing of equipment and materials in accordance with its standards and recommended practices, Milito said. The Monogram program grants manufacturing licenses for more than 70 API equipment specifications, he said.
‘Raise the bar’
In addition to two industry task forces it led to provide information for Salazar’s initial report on the blowout, explosion, and oil spill to US President Barack Obama, Milito said API and other industry groups have assembled two more task forces to address subsea well control and spill response. “We intend to use any findings from the incident investigations to continue to improve the technologies and practices to achieve safe and environmentally sound operations,” he said, adding, “As part of this process, we will work to develop new API standards and revise and adapt existing API standards to raise the bar of performance to a higher level.”
Benton F. Baugh, president of Radoil Inc., a Houston deepwater E&P equipment supplier, said he believes current subsea drilling technology is adequate to control wells being drilled, protect the environment, and keep personnel safe. He said that subsea drilling systems have existed since the early 1960s, when 250 ft of seawater was considered ultra deep, until now, when activity routinely occurs in 12,000 ft of water.
“This subsea equipment business we are discussing is dominated by three major first-level manufacturers,” Baugh said in a written statement. “Each has highly developed and refined systems. Each is [International Standards Organization] quality certified and follows conventional procedures of design, development, testing, and independent verification. You can fully expect that any system in the field has been tested to loads and pressures 50% higher than the loads and pressures ever anticipated to be seen in operations, and that the testing has been verified by independent third parties. You can equally well expect that the equipment is regularly tested to the maximum working pressures to confirm ongoing workability.”
Baugh said the Macondo well did not represent a “pushing of the envelope” in terms of what already has been done because it was in 5,000 ft of water and the Deepwater Horizon, the rig that drilled it, likely had drilled other wells in depths greater than 10,000 ft.
There is “little difference” in drilling in 1,000 and 10,000 ft of water, Baugh noted. “Probably the biggest difference is in what happens to the nitrogen charge in the accumulators which is well studied,” he said, adding, “The actual cause of the current problems is not known, and may well never be known depending on how ultimate closure happens to this well. Clearly it is the confluence of a number of events, none of which may have been the fault of the drilling system.”
More training needed
But Greg McCormack, director of the University of Texas at Austin’s Petroleum Extension Service, noted that while technology allows the industry to seek oil and gas in 12,000 ft of water to a total vertical depth of 30,000 ft, training has not kept up. “Technology drives costs down,” he noted. “Unfortunately, training is looked at as a cost and not an investment. Without appropriate training, technology comes with risk.”
He said training currently is down by more than 25% from levels experienced in 2008, and challenged the industry through its associations to step up and increase funding. API, as the leader in setting standards in many places in the industry, should also be the leader in training standards, he suggested.
McCormack explained that two different kinds of training are required to successfully operate a drilling rig, onshore and offshore. The first relates to operation and maintenance of the rig and is usually provided by third-party trainers or carried out in-house. The second is specific to oil field services that support drilling activities and includes cementing, casing, drilling fluids, logging-while-drilling, measurement-while-drilling, running wireline, and perforating. Service companies typically provide this training because it is very specific to each company’s equipment and products, he said.
McCormack said the knowledge gap created by what has been called the “Great Crew Change” stemming from inconsistent hiring practices during low oil and gas price periods is a particular challenge. “The problem is not one of filling the gaps,” he said. “There are sufficient numbers of people entering the workforce to do that. The problem is one of ‘experience attrition,’ and it is a challenge that must be addressed.
McCormack said companies and regulators should not expect that replacing a supervisor who retires with more than 30 years of experience with an entry-level employee will not result in a performance decline without extra efforts to replace years of experience with significantly more training. “I don’t see this situation being addressed,” he said. “With large gaps in experience, personnel are promoted from one position to the next at a faster rate than in the past.”
Contact Nick Snow at [email protected].
Norwegian Offshore Directorate.
