Industry Supports Smarter, More Effective Regulation
Posted April 24, 2018
It’s a myth in Washington that when regulating energy, more is better. Sometimes, it’s just more, as in more burdensome – potentially hindering safe and responsible energy development that strengthens our country’s security and boosts its economy. Two facts: Natural gas and oil are well regulated, and our industry supports smart, effective regulation.
According to API’s Upstream and Industry Operations Director Erik Milito:
“Offshore energy development is safer than ever. Technological advances, as well as collaborative efforts by the industry and regulators, have helped to continuously advance safety systems and standards. This progress goes hand-in-hand with the proposed revisions to a number of offshore regulations to ensure that smarter and more effective regulations are constantly evolving, as we move forward with safe and responsible offshore development.”
So, let’s set the record straight about BSEE releasing a revised well-control rule for offshore operations. It is not a part of a broad effort by the administration to roll back regulation, safety and enforcement.
To the contrary, government is trying to regulate smarter – focusing on effectively managing risk and ensuring the safety of workers and the environment while also fostering robust offshore development that’s critically important to the nation’s future. Interior Secretary Ryan Zinke last month:
“One of the pillars to responsible energy development is ensuring it's done safely. As part of the Trump administration’s push for safety in energy development, we are working hard to do our job smarter and ensure industry is exploring and producing safely.”
One example is BSEE’s revision of a well-control rule that API cautioned two years ago was technically flawed and might actually make offshore operations less safe. Again, countering a likely Washington-knows-best narrative, we expect a more effective BSEE rule – consistent with recent agency efforts to improve safety in other areas. These include:
Earlier this year, BSEE announced a new inspection program that systematically identifies facilities and operations that have a high-risk profile. BSEE noted that:
Inspection findings and incident reports are used by BSEE to assign a risk factor score to each production facility in the Gulf of Mexico. The risk factor score is based on specific performance and risk-related information that falls into two types of risk-based inspections: “facility based” and “performance based.”
The approach aligns with findings in a 2012 GAO report advising the agency to identify and evaluate offshore operations according to risk. The risk-based inspections supplement BSEE’s existing National Safety Inspection Program. The OCS Lands Act authorizes BSEE to conduct annual scheduled inspections and periodic unannounced inspections of all oil and gas operations. The new risk-based inspection protocol looks beyond compliance and assesses the integrity of critical safety systems on facilities and operations, those that have had multiple incidents of non-compliance or events and may need more attention. Earlier this year, BSEE conducted risk-based inspections of 40 facilities over a two-day period, based on real-time data focused on improving safety.
Beginning April 1, BSEE started significantly increasing the time that its inspectors actually spend on offshore oil and natural gas facilities. Using better technology to access electronic records maintained onshore, the agency can be more efficient in its offshore inspections while reducing helicopter operating expenses 15 percent – savings to taxpayers estimated at nearly $20 million over 3.5 years. BSEE Director Scott A. Angelle:
“This approach greatly improves our inspectors’ efficiency, increasing safety oversight at OCS facilities. Our team developed a smarter, safer strategy that provides more physical inspection time offshore and reduces government costs. This makes sense for the American taxpayer and increases our ability to ensure safe operations offshore.”
Last fall BSEE expanded its Safe Outer Continental Shelf (SafeOCS) voluntary reporting program beyond near-miss reporting to include the confidential collection of equipment failure data – designed to further reduce the risk of offshore incidents. The program allows operators to submit equipment failure reports directly through SafeOCS. The move is part of a larger effort by the agency to engage constructively with industry.
Under the Outer Continental Shelf Lands Act, Interior makes determinations regarding use the best available and safest technologies (BAST) for exploration, development and production operations. BSEE is implementing a system to identify critical safety components, audit and publish results annually with a concurrent review of compliance with BAST goals. Previously, the agency did not go through these processes, creating uncertainty over compliance with BAST objectives.
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and four grandchildren.
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