One offshore accident can spoil goodwill for entire industry, regulator says

HOUSTON — The offshore oil and gas industry only has to look back four years to see why investing in safety isn’t a frivolous expenditure, it’s a hard-nosed business, the nation’s top offshore regulator said Monday.

Avoiding accidents has become paramount in maintaining public acceptance of oil and gas operations off of U.S. coastlines. The 2010 Gulf of Mexico oil spill made many Americans wary of expanding offshore developments off the Atlantic Coast and the coast of Alaska, Brian Salerno, director of the Bureau of Safety and Environmental Enforcement, told energy professionals at the University of Houston on Monday.

“Safety is not cheap – it’s just a whole lot cheaper than failure,” Salerno said in a talk that kicked off the inaugural event of the new Ocean Energy Safety Institute, an organization formed by three Texas universities and first planned by regulators after the Gulf spill in 2010.

Salerno said, in the offshore industry, failure by one company can make life more difficult for all; it could bring on more stringent regulations and closer scrutiny on the entire industry. After BP’s Macondo well blew out in the Gulf of Mexico, it did: The federal government instituted a three-month partial deep-water drilling moratorium and, in recent years, bulked up safety regulations including weekly tests of blowout preventers.

“Goodwill is as asset that belongs on your balance sheet,” he said. “It’s hard to attain, easy to lose, but when you have it, it can be very powerful.”

In recent years, BSEE has found that some operators have taken offshore safety much more seriously than others, and – because of the general lack of data in the industry – the agency has decided to study the characteristics of those more reliable organizations, he said.

Salerno said BSEE is evaluating emerging technologies for which there are no industry standards. The exercise requires “going back to fundamental engineering questions” and shows that industry and regulators must develop risk-based approaches to apply the right degree of skepticism to new technology, he said.

BSEE, he said, is also developing a “near-miss reporting system” that would require operators to report events that almost result in major accidents.

It is part of an effort that accompanies new regulations geared to reduce risk and increase the amount of data BSEE and other agencies receive. The agency currently is bulking up reporting requirements for safety audits under a two-year-old federal program. The audits are due next year.