Industry opposes push to tighten oil field safety rules

WASHINGTON — More than a dozen oil companies and trade groups have lined up to oppose plans to broaden the federal government’s oversight of safety practices at wells, saying existing standards are enough to protect workers nationwide.

The Occupational Safety and Health Administration would be foolish to force new and producing wells to satisfy process safety management standards that have governed other industrial operations for decades, said the American Petroleum Institute, Dallas-based Pioneer Natural Resources, the Texas Oil and Gas Association and other groups in comments filed with the agency.

“Applying (process safety management) to the exploration and production segment of the oil and gas industry is like prescribing painkillers for a paper cut,” said Rick Muncrief, senior vice president of operations for Oklahoma City-based Continental Resources.

The possible new regulations — now at the beginning stages of government consideration — are driven by concerns that reported deaths in the industry nationwide reached a 10-year high in 2012, and that the ongoing domestic drilling boom is putting more workers in harm’s way.

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Number-crunching by the Mary Kay O’Connor Process Safety Center at the Texas A&M Engineering Experiment Station shows the oil field’s outsize fatality rate: 24.2 out of 100,000 oil and gas extraction workers were killed nationwide last year, compared with 1.7 of 100,000 involved in chemical manufacturing.

“When you are drilling for oil, it’s a flammable material, and usually there’s gas accompanied with it,” said Mark Kaszniak, a senior recommendations specialist with the Chemical Safety Board, an independent government agency that has probed accidents at energy facilities.

“If there aren’t the right safeguards on the well, you’ve got the potential for explosions and fire. Low probability, high-severity events don’t happen every day, but when they do happen, they impact a significant number of people.”

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Both the Chemical Safety Board and the National Institute for Occupational Safety and Health are asking for strengthened safety regulations. The agencies have studied oil field fatalities over the past decade, warning repeatedly that many of the industry’s fatal accidents are preventable.

A recent Houston Chronicle investigation uncovered significant deficiencies in regulators’ oversight of onshore oil and gas activities, including a lack of government inquiries into non-fatal accidents that leave workers permanently injured.

Oil and gas drilling and servicing operations are expressly waived from OSHA’s 22-year-old set of process safety management standards, which require manufacturers to have written operating procedures, assess workplace risks, evaluate the integrity of critical equipment and take other steps to prevent uncontrolled releases of hazardous chemicals. Although the agency planned to impose separate safety requirements tailor-made for well drilling and servicing in the early 1990s, it eventually abandoned the effort.

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A separate, de-facto exemption applies to oil and gas production facilities, because regulators have not conducted a legally required economic analysis of applying the process safety mandates to that sector. In the face of oil-industry objections, OSHA backed down from enforcing process safety management requirements at production facilities in 1999.

That all may change as a result of last year’s catastrophic West Fertilizer Co. explosion and a resulting White House directive telling agencies to boost chemical safety. In response, OSHA said it was considering changes to its process safety management mandates – including bringing oil and gas operations into the fold.

According to Bureau of Labor Statistics data, 138 workers involved in oil and gas extraction were killed on the job in 2012, more than double the 68 fatally injured 2009, when U.S. shale drilling activity was starting to climb. Sixty-five of the 2012 deaths were in Texas, 59 percent higher than the Lone Star State’s oil field casualties in 2011.

The Chemical Safety Board is urging OSHA to force oil and gas production activities to comply with the process safety management standards, saying such rules might have prevented some recent accidents, particularly those involving welding and other activities the industry calls “hot work.”

But oil-industry stakeholders insist existing regulations and voluntarily adopted safeguards are enough.

The Texas Oil and Gas Association told OSHA that the group did not know of any data “to justify such extensive revision and expansion of process safety management requirements.”

Cost criticized

Gretchen Kern, a regulatory adviser with Pioneer Natural Resources, said numerous other federal and state regulations, industry codes and standards and recommended practices more effectively address the hazards.

The American Petroleum Institute said that getting rid of the process safety management exemptions would cause companies to divert resources from existing incident prevention programs. Ron Chittim, a senior policy adviser for API, said OSHA would be better off going after repeat offenders and stepping up enforcement of existing safety rules, rather than creating new ones.

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At risk, oil interests warned, is the very economic activity unleashed by the drilling boom.

Joseph Hurt, vice president of the onshore division for the International Association of Drilling Contractors, said OSHA’s plan would put Americans out of work while doing little to improve safety.

The price tag could be too high for smaller oil and gas operators to absorb, said J. Roger Kelley, regulatory chairman of the Domestic Energy Producers Alliance.

OSHA’s existing process safety standards were designed for large industry facilities with relatively stable workforces, in response to catastrophic chemical accidents. Oil industry representatives say the rules aren’t suited for temporary oil wells, often-unmanned production facilities or the widely varying designs from site to site.

But the National Institute for Occupational Safety and Health contends the proposed changes don’t go far enough. The institute, part of the Centers for Disease Control, wants OSHA to rewrite the existing process safety rule to mirror a performance-based approach used in Australia and other countries that puts the onus on employers to assess risks and find ways to combat them.

That approach forces employers to “implement inherently safer designs,” one of the best ways to prevent workplace accidents, the institute said.

What’s next

OSHA is reviewing comments before deciding what steps come next. One possibility is an advanced notice of proposed rule making, which would solicit another round of feedback. Any agency rewrite could span years.

Long delays may be just fine with the exploration and production sector.

“The domestic E&P industry forms the backbone of our country’s 21st-century economy,” Continental’s Muncrief said. “But it is being crushed by overregulation.”

Reporter Lise Olsen in Houston contributed to this report.