OTC Q&A: Top offshore drilling cop talks safety, risk and rules

Changes by the oil industry and the regulators who police it have boosted the safety of offshore drilling, but the nation’s top cop on the beat says more improvements are necessary.

Too many accidents and near-misses are happening at oil and gas facilities in coastal waters, including at decades-old operations on the shallow continental shelf, said Bureau of Safety and Environmental Enforcement Director Brian Salerno.

Salerno will urge the oil industry to work more aggressively in tackling risk and process safety management while speaking at several Offshore Technology Conference events.

His appearance at the conference comes weeks after the safety bureau unveiled a long-awaited proposal for boosting the capability of blowout preventers that are used as a last line of defense against uncontrolled surges of oil and gas at offshore wells.

He spoke with FuelFix about that BOP proposal, the industry’s safety performance and a new confidential tipline for reporting near-accidents offshore. Edited excerpts follow.

Q: The blowout preventer rule proposal embodies much of what you have been trying to do in pushing the industry toward BAST or best available safest technology — the techniques and equipment that are cutting edge but not so far on the horizon that it’s unachievable. Did the BOP strike this balance?

A: “It does elevate the level of technology that’s expected in a blowout preventer on a time scale so people have an ability to respond to this. We didn’t use the word BAST per se in this, but there clearly is a drive towards enhanced technology.”

Q: So many of the benchmarks and ideas that were laid out at the Interior Department’s blowout preventer workshop with industry in 2012 ended up in the proposal. So why did it take so long to develop?

A: “There was a lot of dialogue that took place. There was the workshop, of course, there was participation with API and their process of updating recommended practice 53; there was a lot of dialogue and engagement trying to make sure we were really taking into account all of the appropriate elements, and not just the blowout preventer but other aspects of well control — cementing and casing and so forth — to make this a much more meaningful rule. Rules are not easy to create. Just the way the process is structured there is a lot of back and forth, a lot of dialogue within the government, a lot of interagency dialogue that needs to take place to make sure we don’t inadvertently create problems elsewhere that we weren’t aware of. It’s a long process, but we got it out. I think we still have enough time left to get this across the finish line, and we’ll just have to see what kind of comments we get back.”

Q: What kind of timeline do you have for finalizing the BOP rule?

A: “Our goal, quite honestly is to complete this rule before this administration expires. We don’t control the process or timelines entirely within our bureau, so it’s hard to give a date certain. I’m putting a lot of time and energy into making that happen. The secretary, the assistant secretary and myself are all very committed to it; we all want to get this rule over the finish line.”

Q: Where do things stand in your talks with industry about best available safest technology?

A: We have had a lot of discussions with industry on BAST. That was one of the key discussion points in the production safety rule proposal, which is still being finalized, but since that proposed rule went out in the summer of 2013, a lot of follow-on discussion has taken place with different industry groups that had different ideas on how to develop a process for BAST. It really comes down to what the BAST process is. And BAST for some reason created a lot of fear as to how it would be implemented and what it meant in particular with respect to capital expenditures. (Companies were concerned) if they invested a lot of money in new equipment, would there be some official determination that would make that equipment no longer usable. And that’s not our intention with BAST. So we’ve worked with them, and I think we’ve come up with a pretty good framework for how to approach this. It’s not finalized yet, but as we get a little bit closer here, I think we will be able to come out with something that would make sense to everybody.”

Q:Shell is proposing to drill again in the Chukchi Sea this summer. Its last effort, in 2012 had some very high-profile mishaps — including the grounding of the Kulluk — that were documented both in the headlines and in an Interior Department report. What would make 2015 any different? How do regulators ensure they’re not just fighting the last war but that everyone is gaming out what could go wrong and figuring out solutions now?

A:That’s the question we ask too: What’s different in 2015 than 2012? Shell has come back to us with a number of enhancements to their organizational structure, they’ve really built up their staffing, their contractor oversight, the level of care they’ve put into integrating various operations, but just like 2012, we as a regulator will be watching very closely every step of the way. In 2012, when they were unable to get the pollution response equipment in place, that triggered controls by us, by the regulator: Okay, if you don’t have that equipment in place you cannot drill in a hydrocarbon zone. We were there to make sure we stayed within bounds the whole time. We will continue to have that level of oversight for 2015 and make sure things proceed the way Shell anticipates them proceeding and that all of the procedures, the protocols the precautions they promise are actually being carried out.”

Q:The Bureau of Ocean Energy Management is reviewing Shell’s Chukchi Sea exploration plan. At BSEE, you will be reviewing the applications for permits to drill. And the Coast Guard is checking out Shell’s ships. What kind of high-level, inter-agency coordination is happening of all of this activity?

Q With BOEM and with (Director Abigail Hopper) we talk about the 2015 plan a lot. That also includes in the region between Mark Fesmire, our regional director, and Jim Kendall, the BOEM director, so at the staff level there is a lot that takes place. On an interagency basis, it’s very tight with the Coast Guard — pretty much daily, making sure we’re sharing information, that we know what’s happening, what pieces are being moved, the status of permits and so forth. The interagency working groups still meet; there’s still a Washington group that meets, and there’s also one in Alaska that meets on an interagency basis, so coordination is very, very tight.”

Q: In 2012, you had BSEE personnel on Shell’s rigs in the Chukchi and Beaufort seas. If Shell gets approval to drill again, can we expect the same approach?

A: Just like the last time, we’ll have somebody on the rig making sure everything is proceeding according to plan. That includes not only the drilling activity but also ice management, making sure they are paying attention to what’s out there and any risks that may not be directly associated with the drilling but could affect safe drilling.

Q: How helpful is that? What did you learn from that beyond just being eyes on the scene?

A: Eyes on the scene is the value and then making sure we have daily contact back to the regional director, that information is shared. If there’s anything that they were concerned about, that could be communicated, that that can be addressed. I think it was extremely beneficial to have somebody out there. It’s obviously not something we do on every rig — we don’t do that in the Gulf of Mexico for instance, where it’s more spot checks. But the Arctic is different. The level of precaution we’re following is appropriate given where they are operating. Shell has certainly learned a lot from 2012 as well, so I would anticipate seeing a very high degree of caution and preparedness on their part. Certainly their plans reflect that, and we’ll be there to make sure it happens in practice.”

Q: The Bureau of Safety and Environmental Enforcement is working on new regulations for tackling offshore oil spills. Can you describe that effort?

A: “Essentially it’s spill recovery rates and making sure the equipment can perform at certain capacities and in certain conditions. It makes it much more realistic. Its based on a lot of the lessons learned from Deepwater Horizon and other spills around the country. It’s a coordinated effort, it’s something where we’re in close dialogue with the Coast Guard because the Coast Guard will be the federal on scene coordinator in an offshore spill and they have rules as well … and we want to make sure federal rules match up.”

Q: Is there a sense that could push the industry to do a better job with the type of manual recovery technology they can be brought to bear, going beyond chemical dispersants?

A: “There’s always that desire to improve the ability of the equipment, the recovery rates and the ability to prevent it from being clogged, not only with ice but other debris such as seaweed. And then of course, if you can get greater efficiency in recovering oil and not as much water, that clearly contributes to your ability to collect what’s going through the pumps. If you have a barge and half of it ends up being water that water is taking the place of what could be oil, so the greater efficiency you have with the machinery, the better recovery you can have.”

“Our standard is always mechanical recovery, so the other methods — in situ burning and dispersants — are really in addition to (mechanical recovery). We always come back to mechanical recovery because you always know you can use that, conditions permitting.”

Q: The industry chafes at that.

A: “They do, but it’s not always scientifically appropriate to use chemical dispersants, even in places where it is pre-approved there are conditions: distance from shore, water depth and so forth. With in situ burning you have considerations with what’s downwind and are there people that could be affected by particulate matters and smoke and so forth. So there are a lot of determinations that have to be made based on conditions when a spill occurs. Mechanical recovery — that’s the standard.”

Q: You’ll soon be launching the confidential near-miss reporting program. Why did it take so long to develop?

A: It really required i think in this case a lot of detailed dialogue with the Bureau of Transportation Statistics because you had to really define what it is we’re trying to collect. If you don’t collect the right information, you don’t get much that’s useful. So, a lot of time and attention went into really capturing that and trying to refine the model that BTS will use to help create trend information. We’re very hopeful that this is going to open a window into risk that we have not had before. And just like we’ve seen in the aviation industry and other places that have used this technique, it’s been extremely valuable in understanding the kinds of things that can go wrong, so you can preempt them. So if you realize there are issues with system reliability on different components or systems, then you can take the early action.”

Q: You’ll be talking to the Offshore Technology Conference about where industry and regulators need to improve, and a key area is the safety and environmental management systems that are now both mandated and subject to third-party audits. What’s needed?

A: “I’m a believer that SEMS is the right direction to go in improving safety, but we’re not to the point where we should feel like we can declare victory with SEMS yet. There’s a lot more we need to do. I would like to see SEMS really take on some bigger issues, more process safety, for example. I think somebody can now develop a SEMS plan and really focus on slips, trips and falls, which is important — I never minimize that — but we also need to look at some of the high-consequence low-probability events, the error chains that we can learn a lot about if we have this near-miss reporting and so forth. But I think at the company level they can do a lot to really enhance that.”

Q: It sounds like you’re not seeing in the SEMS plans and audits the level of robustness you wanted on process safety.

A: “It varies. The companies that are already thinking about process safety — they’ve got it. There’s some for whom this whole idea of risk management and safety culture is still fairly recent. They’re not as far along. So what we’d like to do with SEMS is (consider) how do we keep making progress. The smaller companies . . .still have to manage safety. How do we raise the bar across the board?”

“We still have fatalities. We had 11 for Deepwater Horizon, which was way too many. We had one last year, which is still one too many. We’ve lost as many people in the last five years as we did on Deepwater Horizon, so we need to pay attention to the cost. Some of these things are related to lifting — some are other causes — and lifting is one of those areas that I think needs more attention.”

Q: How confident are you that the offshore contractor workforce is being managed effectively — that there’s enough oversight throughout the chain — not just at the deepwater facilities run by huge integrated oil companies but also really small operations on the shallow shelf?

A: “I’m not confident the problem is solved. I think even though companies have a SEMS plan, we’ve seen a number of incidents where it was very clear that the plan isn’t work right down to the way people do work. I don’t expect workers on deck to recite the SEMS plan, but I would expect that they ask some basic questions before they start a job. What’s the process we’re engaged in? What could go wrong? What do we do if it goes wrong? Do we have the resources we need? Basic stuff that would be reflective of a safety culture. Some companies do it; some haven’t gotten there. Unfortunately, we do see these incidents, and when they happen, it sort of tarnishes the whole industry. The public form an opinion as to the level of safety offshore. It’s a common interest throughout the industry to make this work, to be as safe as possible.”