Nick Snow
OGJ Washington Editor
WASHINGTON, DC, Dec. 17 -- While risk-based programs apparently are more effective than prescriptive approaches, they are not the ultimate regulatory solution for making offshore oil and gas operations safe, officials who have worked in three other countries told the US Chemical and Hazard Investigation Board (CSB).
Management, employees, and regulators all need to continuously look for ways to improve safety, instead of simply trying to satisfy regulatory requirements, they said Dec. 15 during CSB’s day-long hearing into workplace issues raised by the Apr. 20 deepwater Macondo well blowout and oil spill in the Gulf of Mexico. BP PLC was Macondo’s operator.
“A single, national approach to safety in commonwealth waters is essential for it to be effective,” said John Clegg, retired chief executive of the Australian National Offshore Petroleum Safety Authority. “A safety case approach also is required, with legislation that is clear and forceful and requires operators to discharge their responsibilities.”
Clegg said a number of Australian offshore oil and gas operators initially felt that this was a matter of simply producing documents as scheduled. “It is not. It is a continuous process,” he said. “Initially, we tried to work with industry to improve the process—for about 18 months—but we soon found that [operators] simply tried to pass it back to the regulator, so we stopped doing this. We also found that workers weren’t being involved, and regulators were not responding aggressively. Basically, the operators and regulators treated it as a paper document to be put on the shelf.”
Britain replaced its prescriptive regulations with a risk-based approach after an explosion and fire destroyed Occidental Petroleum (Caledonia) Ltd.’s Piper Alpha platform in the British North Sea in 1988, killing 167 employees, according to Ian Whewell, the retired offshore division director in Britain’s Health and Safety Executive (HSE).
Different requirements
Offshore operators must notify HSE 3 months before making any safety changes, and review their entire safety operation every 5 years to accommodate new technology, standards, and practices, he said. “As a result of these changes, I believe the UK regime now gives flexibility to meet health and safety challenges in a dynamic and changing offshore industry, and gives the public assurance that high-hazard risks are being properly managed,” Whewell said.
Norway switched from a prescriptive offshore safety regime in 1985 after finding that operators were simply letting regulators tell them what to do and weren’t following maintenance schedules, said Magne Ognedal, director-general of the Norwegian Petroleum Safety Authority. Regulations now apply to onshore as well as offshore operations, and are risk-based and legally binding, he said via a telephone hookup.
“The difference is that we do not require submission of a safety case document. It shall be available in the industry, and when we need it, we ask for it,” he said. “We perform audits and verifications. We don’t have inspectors as staff members. This is based on a risk, not a calendar, approach.”
Offshore oil and gas safety regulators must not only be qualified and experience, but also work for an agency that is adequately funded and independent, the three officials agreed. Australia’s government formed NOPSA in 2005 as an independent entity that had experts on an advisory board, but made final decisions on its own, Clegg said. “Just having a focus on health safety meant exactly that. We were not driven in other directions by additional considerations,” he said.
Whewell said the final report on the Piper Alpha accident revealed tensions between offshore licensing and safety in the British government agency at that time. “Any government department that has responsibilities for both will experience tensions no matter how well the supposed Chinese walls between them operate,” he observed.
‘Balanced approach’
Norway’s government split its petroleum directorate in two, separating safety so that agency could find how operators manage risk, Ognedal told CSB. “It’s a balanced approach, with a slight emphasis on accident prevention,” he said. “We don’t always put lessons the industry should learn in the regulations, but we always ask operators questions. We check compliance of our risk-management requirements. Our regulations as they are formed and written give flexibility so we can take into consideration the use of new methods and equipment to improve safety.”
Clegg noted that soon after NOPSA adopted a risk-based approach, it found poor hazard analysis and risk assessment; poor links between hazards, risks, and controls; and use of regulations to justify existing controls instead of as opportunities to improve. The biggest problem was that lower level employees were not involved in reaching safety decisions, he said. “One of the first questions we would ask was ‘Please show the involvement of the workforce.’ The number of safety cases which were withdrawn when we asked that was astonishing,” he told CSB.
NOPSA responded by checking employers’ workforce regulation compliance, recording and investigating employee complaints, meeting bimonthly with workers and their supervisors, and regularly meeting with unions and management, Clegg said. “There’s still a lack of employee involvement in many safety cases. There are limited regulatory resources for investigations. Junior representatives often are given the responsibility,” he said.
Ognedal said Norway’s offshore industry regulation traditionally has tried to involve employees in safety discussions. “We have several forums where they get together with employers. They participate, come with their views, and ask questions, but the regulator makes the final decisions,” he said.
The three countries’ offshore oil and gas regulatory agencies also share the problem faced by the US Bureau of Ocean Energy Management, Regulation, and Enforcement in hiring and retaining qualified inspectors and other employees, the witnesses told CSB.
‘We try hard’
“Our real problem—and it always will be a continuing problem—is hiring the right people,” said Clegg. “We try to pay more-or-less comparable salaries and offer additional basis which let us compete to get the necessary management and technical skills. They have to have 5-10 years’ experience, preferably offshore, and come from middle management. Those people also are sought by industry, but we try hard to compete for them.”
“When it comes to resources, we can always use more as a regulator,” Ognedal said. “The day-to-day challenge is to do a good job with what we have. When it comes to personnel, recruitment is a challenge. We compete with the industry, which is reflected in the salaries we offer and other features it can’t which are attractive.” Whewell said that Britain’s HSE also tries to offer salaries competitive with the oil and gas industry’s and additional inducements.
The three officials emphasized that risk-based regulations are not a silver bullet. “It creates an expectation that risks are properly evaluated by the operator and safety measures put in case,” said Whewell. “From what I’ve seen [in earlier hearings about the Apr. 20 Gulf of Mexico accident], it looks as if risks were not properly evaluated. At Macondo, this would have involved considering specific aspects of the well and the reservoir’s high-pressure characteristics. If risks had been properly evaluated, it might have influenced significant decisions which were made.”
“It also has to involve a competent regulator able to significantly challenge decisions and procedures,” Clegg added.
“The competence of the employer and contractors, and the cooperation of others offshore and onshore, has to be in place, regardless of the kind of regulatory system which is used,” Ognedal observed. “People should be curious about all this and ask what they can learn from all the reports and information.”
Contact Nick Snow at [email protected].
US Government Accountability Office.
