Report: Offshore regulator needs outside expertise on technology

WASHINGTON — The expertise of the offshore oil and gas industry outmatches the federal agency that oversees it, making it essential that the government reach outside its ranks for insight on the best technology to safeguard the work, according to a report issued Monday.

But the government’s plans for a new independent Ocean Energy Safety Institute to help keep pace with the offshore oil industry needs changes to meet the challenge, said the National Academy of Sciences.

“If properly organized, staffed and supported, (the institute) could go a long way toward solving problems associated with a government agency competing with industry for top talent and expertise,” the report said. But “the scale and structure of the institute . . . will need to be significantly expanded to address fully the challenges posed offshore.”

Outside help

The Interior Department’s Bureau of Safety and Environmental Enforcement, which requested the assessment, could look to the institute for trustworthy, “conflict-free” insight and information “if it is given the appropriate resources,” the National Academy of Sciences said.

Federal law requires offshore companies to use the “best available and safest technologies” in all cases where an equipment failure would have a significant effect on safety, health or the environment.  But the Interior Department has to determine what best available, safest technologies apply. Such technological safeguards aren’t required when the Interior secretary determines the benefits are insufficient to justify their costs.

Without outside help, NAS says it would be virtually impossible for the bureau to keep up with the rapidly expanding technology being deployed offshore — especially in deep water and even deeper underground reserves more than 100 miles from the coast.

The safety bureau “has embarked on an aggressive hiring and training campaign in the past two years, but it cannot realistically be expected to match industry in technical depth or breadth,” the report says. “Compensation limits imposed by the federal government will make it difficult to compete with industry for the best graduates and experienced staff.”

More money needed

The NAS researchers took issue with the financial support for the Ocean Energy Safety Institute, which is set to get up to $5 million over five years in starter funding from the federal government. But that is “not adequate for producing meaningful ‘best available safest technology’ results, other than planning, and . . . it could limit the ability to attract and retain key personnel,” NAS said.

Instead of relying on short-term agreements to fund the institute, NAS urged the safety bureau to consider broadening it to be a federally funded research and development center or a university-affiliated research center that could receive funding over a longer period.

And the NAS recommends that the new safety institute be located somewhere along the Texas Gulf Coast, given the readily available oil industry workforce and the “large pool of industry retirees” in the region. Similar government-sponsored technology efforts have been effective in part because they were housed close to industry, NAS said, citing NASA’s Jet Propulsion Laboratory in Pasadena, Calif.

A safety bureau spokesman said the agency would “closely examine the (National Academy’s) recommendations to see how they can support the bureau’s overall efforts to improve the safety of all offshore operations.”

Chief engineer

Even with a reliable outside institute evaluating the best and safest technologies for offshore oil and gas development, in-house expertise is needed. NAS urged the safety bureau to hire a “highly reputable chief engineer or chief scientist with technical expertise in offshore drilling, exploration and production.”

Another option for strengthening in-house talent, according to the report, is to recruit industry retirees and to develop a system for rotating technical staff between government and industry, much like the “cross-posting” program used by the Federal Aviation Administration today. But critics previously have said that could prompt allegations of — or outright — coziness between the industry and its chief federal regulators.

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Since the safety bureau was created in 2010 — borne from the now-defunct Minerals Management Service — agency directors have lamented the challenge in competing with the well-heeled oil and gas industry for top talent. Safety bureau officials said they hoped loan repayment programs and a sense of public service would help motivate some engineers to join the agency.