Tougher offshore scrutiny? Not yet

WASHINGTON — When a government deadline for new safety management programs at offshore drilling rigs and wells approached in November 2011, oil and gas industry leaders were bracing for tough scrutiny and plenty of penalties.

But that scrutiny never materialized.

More than a year later, federal regulators haven’t launched a single audit of those newly required safety and environmental management systems, which are meant to slash mistakes and shrink risks. Instead, just six companies have voluntarily submitted their own audits to the Bureau of Safety and Environmental Enforcement ahead of a Nov. 15, 2013, deadline. The lack of audits was first highlighted by David Hammer with WWLTV in New Orleans.

And though the safety bureau last year proposed adding teeth to the mandate and requiring third parties – rather than the companies themselves – to audit the programs, that regulation hasn’t advanced since then. Bureau officials say it is now on track to be finalized early next year.

At the same time, questions have been raised about the status of an agency training center meant to give engineers and inspectors the information and skills they need to go toe-to-toe with industry.

The safety programs are drawing fresh attention in the wake of a Nov. 16 fire on a Gulf of Mexico oil production platform that killed three workers and injured others.

Related coverage: Part 1: After spill, offshore enforcement remains murky

As the platform owner, Black Elk Energy, was required to have a safety and environmental management system for minimizing human errors and operational hazards.

It’s impossible to say whether a rigorous audit of Black Elk’s safety program would have unearthed problems and prevented the lethal blaze.

Investigations are ongoing, but Black Elk says the fire erupted during construction work, possibly when a cutting torch ignited flammable vapors in a line connected to an oil tank.

James Watson, the safety bureau director, said energy companies are already auditing their safety programs in advance of the November 2013 deadline, even though just six have given those assessments to the agency. And he stressed that the lack of government audits is by design, to keep companies focused on their own safety.

“We will do very few audits ourselves,” he said. “If the industry is relying on the government, they’re not going to be engaged in this thing. They’re just going to potentially let the government do some of the management.”

“The last thing we want to do is manage these companies,” Watson added. “We want to see them manage themselves.”

With the safety systems rule, the United States veered onto a path forged by the United Kingdom, Norway and other countries that are blending some proscriptive regulations with a performance-based approach that puts the onus on companies to assess and manage risks.

At least two government panels recommended similar changes following the 2010 Deepwater Horizon disaster.

Risk-based model

The Chemical Safety Board, which is set to issue its report on the Deepwater Horizon disaster early next year, is exploring whether the government needs to do even more to adopt a risk-based model.

“Our goal is to highlight the characteristics of the regimes that appear to be successful and are managing these high-risk, high-hazard activities offshore and how they are successfully working with industry to do that,” said Don Holmstrom, director of the Chemical Safety Board’s western regional office.

Holmstrom noted that the safety systems rule was the first big U.S. step away from prescriptive, checklist-based offshore oversight focused heavily on whether individual equipment passes muster and not “on major accident prevention.”

But a performance-based approach only works if you have regulators with the same resources, skills and experience as the companies they police.

While the safety bureau now has 94 inspectors on staff – up from 55 before the 2010 spill – and has hired more petroleum engineers, it still struggles to compete with high-paying industry to recruit experienced experts.

Training center

And critics say a much-lauded “National Offshore Training Center” announced with much fanfare in 2011 has lost status at the agency.

The center was meant to be a premier program for giving new recruits and experienced inspectors skills to aggressively monitor offshore energy operations.

But when the first and only director of that training center left in June, he complained in an email to colleagues that “this agency does not want a training center” unless it “is in the Gulf doing exactly what the Gulf wants.”

The agency hasn’t hired a permanent replacement.

According to the bureau, as many as five employees devote time to the center and rigorous training is still under way, with agency staff logging more than 10,000 hours of technical and safety training in the last fiscal year.

During a two-week-long boot camp in August, the bureau immersed 38 workers in petroleum geology, drilling engineering, production engineering and permitting coursework, with classroom lectures by college professors complemented by hands-on exposure to equipment.

Watson said the agency has made “pretty significant” progress training its workers.

“We’ve come a long way. We’ve added people. We’ve trained a lot of people,” he said. “We’ve doubled the amount of training from what we’ve done in previous years.”