Deepwater complexities make regulations necessary, lawmakers told
Nick Snow
OGJ Washington Editor
WASHINGTON, DC, July 1 -- The US oil and gas industry’s approach of developing standards and practices apparently isn’t capable of handling complex deepwater exploration and production problems by itself, an independent consultant told a House subcommittee, which is considering legislation to increase regulation of offshore equipment and systems.
More recent deepwater high-risk wells have a complexity that rivals that confronts the National Aeronautics and Space Administration in space travel, John Martinez told the House Energy and Commerce Committee’s Energy and Environment subcommittee on June 30.
The committee consulted with him in its investigation of events leading up to the Apr. 20 Macondo well blowout, Deepwater Horizon rig explosion, and subsequent oil spill into the Gulf of Mexico. Martinez has 42 years of experience in the industry and specializes in wellbore construction, completion, fluid flow, and artificial lift, he said in his written statement.
“Like NASA, we as an industry must insure safety and quality, and not settle for or take short cuts in an attempt to save some millions of dollars, which could cost lives and billions of dollars in damages instead,” Martinez said.
“We need to have a quality design in the wellbore that will result in improved safety as well as lessen casing corrosion and its associated remedial maintenance cost,” he maintained. “We also need to follow proven safety procedures for well control that can prevent a blowout.”
Requirements, certifications
Martinez said he supports requiring more-thorough function and production tests of blowout preventers (BOPs), redundant shear rams to shut off BOPs when loss of well control is imminent, and control systems to independently activate those shear rams. He also favors independent certifications of BOP functions and pressure testing and other certifications proposed in HR 5626, the bill before the committee that was released on June 25. Markup of the measure was scheduled for July 1 but postponed late on June 30 to a later, yet unknown date.
“I expect that many experienced drilling and production people, recently retired and living in oil field communities, not only are available but also would see this as their duty to serve,” he told the subcommittee, adding that it would not necessarily be a fulltime job but more likely involve periodically witnessing and certifying tests and drilling plans.
The bill in its present form would require a producer seeking a permit for a high-risk offshore well to demonstrate the ability to prevent and contain leaks. It would require the use of BOPs with at least two sets of blind shear rams appropriately spaced, two sets of appropriately spaced casing shear rams, independent and redundant hydraulic and activation systems for each blind shear and casing ram, one or more emergency backup control systems, and remotely operated vehicle intervention capabilities for secondary control.
Each BOP would have to be certified by an independent third party before the well could be drilled. The certification would be based on a detailed physical inspection, design review, system integration test, and function testing, according to a summary of HR 5626. Recertification would be required every 180 days or after any material modification to the BOP or the well’s design.
A BOP’s functions and pressures would have to be tested promptly after a significant well control event, it said. Reports also would have to be submitted covering BOP maintenance and repair, electronic logs, design specifications and changes to them, and failure during a well control event.
Well design provisions
High-risk wells under the bill would have to have at least three independently tested barriers, including at least two that would be mechanical, and have well control guidelines and fluid circulation and displacement procedures. Third-party certification of a well’s design would be required before drilling could begin and after any material design modification.
The bill also would impose regulations covering well casing designs and cementing programs at high-risk wells, including requirements for an adequate cement volume and cement bond logs for all cementing programs. Well casing designs and cementing programs and procedures would have to be certified by independent third parties before drilling of a high-risk well could begin.
There also would be regulations to establish procedures and technologies to minimize the risk of ignition and explosion of hydrocarbons discharged from the well during a well control event.
Another section of the bill would require that regulations be established for operators and contractors to stop work when conditions indicate an immediate blowout risk. Operators also would have to adopt policies, procedures, and incentives to ensure that work stops in such circumstances.
In the bill’s section dealing with independent technical advice and certification, an independent well control technical advisory committee would be established to review and comment on proposed regulations, respond to requests for advice from the appropriate federal official, and periodically report on available BOP and well control technologies, practices, voluntary standards, and regulations in the US and elsewhere. The committee also would assess whether regulations were adequate and recommend modifications when needed.
Certifiers’ standards
The US Interior secretary, Energy secretary, Environmental Protection Agency administrator, or other appropriate federal official would be required to establish standards for approving independent third-party certifiers. That official would contract independently with those certifiers and randomly assign them to individual certifications and recertifications. Operators would pay fees to cover these activities.
A panel of independent technical experts to provide technical advice for the appropriate federal official on any well-specific decision also would be established. Regulations would have to be issued within 1 year of the bill’s passage and reviewed at least once every 5 years. Interim orders could be issued before regulations would be issued.
Another section would establish a requirement for unannounced inspections and in-person observation of tests by federal inspectors, and for operators to be charged fees to cover these costs. Other sections provide for the judicial review of regulations, investigation of alleged or suspected violations, citizen suits to compel compliance, civil and criminal penalties for violations, and whistleblower protections.
Under the bill, a well would be considered a high risk offshore if it was within 200 nautical miles of the US coast, or onshore if it was identified by criteria established by an appropriate federal official as a potential threat to public health and safety or the environment if it blew out.
Other witnesses
Deputy US Interior Sec. David J. Hayes, who also testified at the hearing, said DOI and the US Bureau of Ocean Energy Management, Regulation, and Enforcement have taken administrative steps in response to the well blowout and spill in the gulf. He also said he generally supports the bill’s provisions.
“We know from our follow-up of this accident that there are some weaknesses in the regulatory structure,” he said. “We also are interested in triggering a complete reevaluation of the technology for [BOPs]. Certainly for today’s BOPs, redundant shear rams make sense, but we hope new regulations will not inhibit development of technology to move beyond the current approach.”
A third witness, Elgie Holstein, senior director for federal strategy at the Environmental Defense Fund, said industry must rebuild public trust and confidence in its ability to operate safely and responsibly.
“In turn, the government must demonstrate a renewed commitment to safeguarding the public’s natural resources and our economy,” he said in his written statement. “The draft legislation before this subcommittee is a good start in moving that agenda forward with respect to the high-risk wells that are an increasing part of our domestic energy development.”
Contact Nick Snow at [email protected].