Feds rap offshore contractors for safety violations

Federal regulators this month issued a batch of safety violation notices to offshore drilling contractors, exercising an aggressive new interpretation of the Interior Department’s powers for the first time since the 2010 Gulf oil spill.

The “incidents of non compliance” sent to Ensco Drilling, Nabors Offshore Corp., and three other contractors in recent weeks mark the very beginning of a long process that can lead to civil penalties of $40,000 per incident per day.

The companies did not respond to requests for comment.

The decision to issue the citations — and post them for review on a government website — further solidifies a new approach to offshore drilling oversight at the Interior Department’s Bureau of Safety and Environmental Enforcement, more than a year after regulators first announced they would stop policing just the companies that search for oil and gas in federal waters.

Traditionally, federal drilling regulators had enforced offshore violations against oil and gas companies, putting the onus on those firms to make sure their contractors follow regulations.

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The approach was first tested in 2011 when the safety bureau issued citations against Halliburton and Transocean — in addition to BP — for violating offshore drilling regulations in connection with blowout at BP’s Macondo well. But these are the first non-spill-related notices for offshore contractors. And they are among the first violation notices regularly being posted online for public review.

Conservationists and worker advocates said the action is a move toward greater accountability.

Bob Deans, with the Natural Resources Defense Council, said the publication of the violations “is a step in the right direction.”

“It helps the public understand who plays by the rules and who breaks them,” Deans said. “That’s an important part of holding companies to account.”

The safety bureau has said it would still focus primarily on oil and gas companies leasing offshore tracts for drilling. And the agency has pledged to consider the gravity of a violation and other factors when considering whether a contractor should be cited.

But drilling contractors and oilfield service firms remain wary of the new approach.

Jim Noe, executive vice president of the drilling contractor Hercules Offshore stressed that the company has always been required to follow offshore drilling regulations, even though federal regulators just targeted operators for any violations. “So the policy shift won’t really impact how we conduct our day-to-day operations,” he said.

But, Noe added, if regulators focus too heavily on minor violations, it could spur a dangerous shift on offshore rigs, subtly distracting workers from big picture safety issues.

“Earlier in the year, we saw BSEE issuing INCs to operators for trivial matters, like cracked plastic lighting casing in hallways and dribbled coffee in the galley,” Noe said. That could cause “highly trained crews to take their focus off the well and critical well control activities to check fluorescent lighting and police galleys. If we see BSEE focus too much attention on writing traffic tickets for trivial matters, we could see a shift of focus off what really matters.”

BSEE Director James Watson has vowed to target the agency’s enforcement to serious offenses.

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“If you are spending your time pursuing a penalty on something that is less-than-the-highest-risk thing . . . then there’s opportunity costs of not having your people be observing the things that are really important for them to observe,” Watson said in an interview last December.

The safety bureau can assess civil penalties if the recipient fails to correct violations promptly or it results in a threat of serious harm or damage to human life or the environment.

Civil penalties are capped at $40,000 per incident per day, with modest inflation adjustments allowed every three years. Bigger changes are up to Congress.

The safety violation notices issued in recent weeks included:

  • a Feb. 5 notice to ERT GOM Inc., for an accident in August 2011, when the hoist wire rope on a platform crane failed, dropping a generator to the deck and triggering a sequence of events that culminated in the death of a worker.
  • a March 5 notice to Nabors citing injury to a worker after personnel failed to make sure the electricity was off before trying to install a 30-amp plug.
  • a March 5 notice to Island Operators Co., for “improperly” using a crane to transfer chemicals, causing them to overflow and triggering a chemical fire on board a platform.
  • a March 5 notice to Ensco for continuing well operations for seven days or longer even though critical emergency equipment known as a blowout preventer had a faulty control system at the time. The company was also rapped for not implementing a plan for dealing with unplanned disconnects of blowout preventers ahead of one such accidental release last year.
  • a March 8 notice to Alliance Oilfield Services citing the company for not using fall protection and making other safety changes while equipment was lifted on deck, creating an open hole at the site.

The 2010 oil spill focused scrutiny on the way the entire oil an gas industry is regulated, especially after a presidential commission said the disaster was evidence of “systemic” problems and poor communication among the broad cast of characters involved in drilling BP’s doomed Macondo well. At the very top of the chain was BP, the primary offshore operator who held the lease on which its well was drilled. But other contractors also were involved, including Transocean, which owned the Deepwater Horizon rig working on the job, and Halliburton, which applied cement at the site.