As prepared for delivery
Doha World Petroleum Congress
Special Session 4 - The Safety of E&P Operations in Deep Water
Jack Gerard remarks - Dec. 6, 2011
I'm Jack Gerard, president and CEO of the American Petroleum Institute, the United States' leading oil and natural gas association. I am pleased to be part of what has been a vitally important worldwide discussion in recent years: how to safely explore and produce petroleum from deep waters. Nothing could be more important to a significant number of API's members.
API represents more than 490 American oil and natural gas companies, from the largest oil companies to the smallest of independents. Our members come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry.
API is strengthening its worldwide operations, because many of API's member companies have either international operations or are headquartered outside of the United States, including three of our more well-known international companies: BP, Shell and Saudi Aramco.
Today API is recognized around the world for its broad range of programs. To help boost our growing international operations, API is expanding into additional regions. This year, we opened our newest international office in Dubai, to support the growing demand for our certification and standards programs. The Middle East is our fourth largest market for these products. We've opened offices in Beijing and Singapore as well.
When it comes to deep water exploration, the United States has a long history of experience. We've been exploring offshore for more than 60 years, and more than 42,000 wells have been safely drilled during that period, including 3,500 deep water wells.
In 2010, the Deepwater Horizon accident in the Gulf of Mexico presented our industry with one of its most daunting challenges. We not only had to contend with a deadly accident and subsequent spill. We also had to make improvements in our deep water exploration and spill preparedness and response processes and prove to both the government and to the public that we were ready to get back to work in the Gulf.
We've done that, and we're working to get back to full production. This hasn't been easy, as we've been dealing with a reluctant administration. From an outright moratorium on offshore drilling immediately after the spill, the administration has persisted on a course of regulatory uncertainty, both onshore and off. In fact, the United States will hold its first offshore lease sale in more than a year next week. We welcome that first step, but there's more that can be done – and should be done. America's oil and natural gas industry is proud of the progress we've made and optimistic about the possibilities that our domestic offshore energy resources offer.
The U.S. Department of Energy's analysis division – the Energy Information Administration – forecasts that worldwide consumption of energy is expected to grow nearly 50 percent by 2035. In the U.S., oil and natural gas will be needed to supply about 55 percent of our energy needs at that time. That level of demand will require continued deep water exploration in the U.S., which is why we continue to urge policymakers to open new access to offshore areas currently off limits.
Increasing access to these resources does more for the American economy than grow our energy reserves. It will also create jobs. In fact, pro-growth energy policies could create as many as 1 million new American jobs in the next seven years. The U.S. has been struggling with unemployment as high as 9 percent for nearly three years, so the promise of a million jobs gets the attentions of politicians and policymakers from nearly all parts of the political spectrum. These policies can also boost America's production by the equivalent of 10 million barrels a day. In fact, we believe by 2026 we could meet all of America's liquid fuel needs from North American sources.
After last year's spill, we immediately brought together industry experts from around the world to find ways we could enhance our already robust focus on safety and overall safe operations. API formed four joint industry task forces to address offshore equipment, operating procedures, subsea well control and containment and oil spill preparedness and response.
Those task forces looked at what worked, what improvements could be made and what would require further study. The first reports from these joint industry task forces were issued last summer and in early fall. I'm pleased to report that we just completed a progress report on the oil spill preparedness and response issues and the others will be completed within the next two to three weeks. These will all be posted on API's website when finalized.
Through these reports, our industry recognized the need to form a program that would help enhance the safety culture within the industry and provide for continual improvement of safety performance. In March, we created the Center for Offshore Safety to promote the highest level of safety for offshore operations.
The Center for Offshore Safety (COS) is an industry sponsored organization focused exclusively on offshore safety. The Center will serve the US offshore oil and gas industry with the purpose of adopting standards of excellence to ensure continuous improvement in safety and offshore operational integrity. The Center will be responsible for:
- Providing assistance to member companies for their implementation of the Center for Offshore Safety programs
- Assuring that third party certification program auditors meet the program's goals and objectives
- Compiling and analyzing key industry leading and lagging safety metrics
- Coordinating Center sponsored functions designed to facilitate the sharing and learning process
- Identifying and promoting opportunities for industry to continuously improve
- Development of outreach programs to facilitate communicating with government and external stakeholders.
Strong industry safety procedures are often based on solid and reliable standards and certifications.
Regulators often rely on industry standards and practices when they write regulations covering operations. In the 14 top oil producing regions, regulators reference at least 1,348 industry standards, according to the International Association of Oil and Gas Producers. Since 1924, the American Petroleum Institute has been a cornerstone in establishing and maintaining standards, and no fewer than 225 of our standards are referenced by regulators worldwide. Our history in standard setting gives
us a lot to draw on when working to heighten safety, both in our country and around the world.
As we all know, a one-size-fits-all approach to safety is impractical, due to each region's unique geography and conditions. However, safety isn't isolated, and changes in America can affect worldwide production. That's why we have made an effort to work closely with our counterparts outside of the U.S. like IPIECA and OGP, with the recognition that what we do in the U.S. could have a significant impact on operations in other parts of the globe, and vice-versa.
Events like the World Petroleum Congress help organizations like mine improve our communications with our international colleagues. I'm pleased to be a part of it and excited about what members of the panel can add to this discussion. With that, let me introduce them to you:
Panelist Introductions
Michael Engell-Jensen is the Executive Director of the London-based International Association of Oil and Gas Producers (OGP). Michael has more than 29 years of experience in the upstream oil and gas industry. He was Managing Director of Maersk Oil in the UK and Qatar. He holds a Ph.D. in applied nuclear physics from the Technical University of Denmark.
Robert Cox has more than twenty years of international petroleum industry experience in Africa, the Middle East and the United States. For the past 10 years, has been Technical Director of the International Petroleum Industry Environmental Conservation Association (IPIECA) in London. In addition to his work at IPIECA, he is currently working on a joint project with the Oil & Gas Producers association (OGP) to establish and implement the oil spill response lessons learned from the Montara and Macondo oil spills. Rob holds a Bachelors degree in Chemistry and Biochemistry from the University of Dundee in Scotland and a Postgraduate Diploma in Advanced Environmental Practice from Farnborough College in England.
Richard Morrison was recently named Vice President of BP's Global Deepwater Response Group. He has 31 years of experience working in the industry, with more than half in engineering and operations leadership roles in the Netherlands, Congo, Egypt, United Arab Emirates and Venezuela. Richard was the Deputy Unified Area Commander during the Deepwater Horizon oil spill response, responsible for coordinating many of the operational aspects related to the surface response activity. He received his Petroleum Engineering degree from Texas A&M University.