The US Department of the Interior issued offshore oil and gas well control regulations aimed at reducing the risk of a blowout that could result in the loss of lives, serious injuries, or substantial harm to the environment.
The Apr. 14 announcement came less than a week before the sixth anniversary of the Macondo deepwater well accident and explosion that killed 11 workers and sank the Deepwater Horizon semisubmersible rig, setting off a 5 million bbl spill into the Gulf of Mexico that took 87 days to cap and contain, and several more months to clean up.
“It was very important we understand the root cause of this tragedy,” US Sec. of the Interior Sally Jewell told reporters in an Apr. 14 teleconference as DOI and the US Bureau of Safety and Environmental Enforcement released the final rule. “A number of things went wrong. It was important we understand what happened, how technology evolved, and how all these things can be integrated into a rule that would work well in the long term.
“It took a long time,” she continued. But we increased the department’s resources and capability, worked with the industry on developing capacities to address the worst of the bad situations, and hopefully established a safety regime that will work for a long time.”
Officials from the American Petroleum Institute, Independent Petroleum Association of America, and National Ocean Industries Association said that they would study the new rule, but expressed concerns over the manner in which it was developed.
DOI said that the final rule addresses the full range of systems and equipment related to well control operations, with a focus on blowout preventer requirements, well design, well control casing, cementing, real-time monitoring, and subsea containment. The measures are designed to improve equipment reliability, especially for blowout preventers and blowout prevention technologies, it indicated.
Testing and oversight
The rule requires rigorous testing of equipment and provides for continuous oversight of operations, all with the goal of improving the equipment and systems’ reliability to protect workers’ lives and the environment from the potentially devastating effects of blowouts and offshore oil spills, DOI said.
It said the final rule combines prescriptive and performance-based measures to ensure that oil and gas producers and offshore rig operators are cultivating a greater safety culture which minimizes risk. Its key features include requirements for blowout preventer systems, double shear rams, third-party reviews of equipment, real-time monitoring data, safe drilling margins, centralizers, inspection intervals, and other reforms related to well design and control, casing, cementing, and subsea containment.
“This rule was developed with significant input from a wide range of stakeholders,” said BSEE Director Brian Salerno, who also participated in the teleconference. “We initiated meetings to collect the best ideas on preventing well blowouts, including the knowledge and skill sets that industry has.”
During what he termed “a robust public engagement period,” BSEE received more than 170 comments, he said. Teams of BSEE subject matter experts then reviewed the comments and, in some case, asked commenters to clarify their points, he explained.
“BOP systems are a main focus of this rule, as they should be,” Salerno said. “They can be the last line of defense in preventing a major disaster. We also seek to improve the quality of information collected from BOP failures to help BSEE improve its oversight and regulation.”
DOI said that the final rule is in harmony with the offshore oil and gas industry’s best practices, standards, and equipment specifications. For example, new drilling rigs already are being built pursuant to updated industry standards that BSEE used as a foundation for the rule. Furthermore, most rigs comply with recognized engineering practices and original equipment manufacturers requirements related to repair and training.
Extended compliance time
For companies that may need time to bring their operations into compliance, most of the requirements do not become effective until 3 months after the final rules publication in the Federal Register, DOI said. Moreover, several requirements have more extended compliance timeframes, DOI noted.
“We have made it a priority to engage with industry to strengthen our understanding of emerging technology, to participate with standards development organizations and to seek out the perspectives of other stakeholders,” Salerno said. “We collected best practices on preventing well control incidents and blowouts to inform the development of this rule. As a result, this is one of the most comprehensive offshore safety and environmental protection rules ever developed by [DOI].”
Initial oil and gas industry group reactions were cautious, but critical. API Upstream Group Director Erik Milito said on Apr. 14 that the association was reviewing the final rule after expressing concerns that the initial proposal had technical problems which could make offshore operations less safe if they were not corrected.
This included a recommendation by the government to shift operational decision-making from rig site to offsite personnel, he explained. The industry believes that onsite employees have the best understanding and most complete picture of the current operation, key risks, and critical considerations, Milito said.
IPAA Senior Vice-Pres. of Government Relations and Political Affairs Daniel T. Naatz said, “This long-anticipated rule, half a decade in the making, was the federal government’s chance to get it right—to implement new offshore operating standards that would balance workable safety measures with the continued development of America’s rich energy resources.
“Instead, today’s highly prescriptive rule could result in unintended negative consequences leading to reduced safety, less environmental protection, fewer American jobs, and decreased US oil and gas production,” Naatz declared.
Some concerns addressed
“The good news for industry today is that we are now learning what is actually in the final well control rule,” said NOIA Pres. Randall B. Luthi. We are gratified that some industry concerns were addressed. When regulations require retrofitting existing equipment or the use of new technology, it is best to have a reasonable implementation time. This was important to industry, and on that aspect BSEE agreed and extended many of the proposed timelines.
“However, the final language on the prescriptive drilling margin may not completely address valid concerns expressed by some of our members,” he continued. “Therefore, the implementation scheme of that section will be key as regulators move forward under the rule. There may very well be more earwigs tucked away in the corn, but we are just now beginning to peel back the layers of this massive rule.”
But Luthi, who directed the US Minerals Management Service, BSEE’s predecessor, during Pres. George W. Bush’s second term, said that NOIA and its members could not ignore that the final rule’s release culminated a flawed rulemaking process.
For months, members of Congress, industry trade associations, oil and gas companies and their employees weighed in on the rule, urging the regulators and the White House to take more public comment, consider new economic studies, and pull back and rewrite portions of the rule,” he said. “Like trying to hit a bullseye while blindfolded, no one received meaningful feedback and everyone was left guessing whether their input had hit the mark and would be reflected in the final rule.”
During the teleconference, Salerno said a number of important changes were made from the proposed rule which was issued a year earlier (OGJ Online, Apr. 14, 2015). “The most significant areas were clarifying drilling margin language, which made it clear that companies can deviate from the proposed 0.5 margin. This will let them develop a plan consistent with their operations,” he said. Basically, we added more performance and risk-based language that reflect how operations run. We also changed a testing interval from 7 to 14 days.”
The day before DOI and BSEE issued the final offshore well control rule, the US Chemical Safety Board said that federal regulatory changes since the 2010 Macondo accident and spill do not do enough to place the onus on industry to reduce risk, nor sufficiently empower BSEE to proactively oversee industry’s efforts to prevent a similar disaster (OGJ Online, Apr. 14, 2016).
Contact Nick Snow at [email protected].
