This is Part 6 of a paper written following the BP Oil Spill in 2010 regarding US offshore safety. In this chapter, we offer some offshore drilling policy recommendations to improve offshore safety and prevent future disasters.
Following the disaster of Deepwater Horizon, it has become increasingly evident that offshore drilling in the United States faces significant obstacles to success. Other nations in the world have had similar disasters, and, as a result, they have been able to successfully develop and implement new regulations that have dramatically improved offshore drilling safety. As the United States works to develop a new regulatory regime, it would be well advised to further examine the lessons of other nations across the globe. The following measures have the potential to create a much safer and more prosperous offshore drilling regime.
First of all, the United States should move towards much more goal-based, goal setting regulations. Unlike the vast majority of developed nations in the world, the United States continues to support a prescriptive, top-down regulatory system.
While this prescriptive system has some benefits, particularly as it gives the federal government the authority to specify exact requirements, it also has significant drawbacks. In particular, this approach leaves the nation’s regulators vulnerable to the impact of the rapidly changing nature of the offshore industry. As the offshore industry invests heavily in research and development, drilling deeper and deeper, regulations instituted several years ago are already obsolete. It is next to impossible for a regulatory agency to continuously re-write regulations to keep up with its counterparts in industry.
Secondly, a strictly prescriptive approach discourages any innovation. There is some value in dictating exactly what a company is required to do. However, there is also significant value in encouraging a company to find a better, more innovative way to achieve safety standards. In addition, the institution of more goal-based regulation has the ability to force companies to create entire departments devoted solely to safety. With that approach, safety becomes an intrinsic part of the drilling process, rather than just another technicality. Norway, the UK, and Canada have all instituted top-down regulations to tremendous success; it is time for the United States to follow their example.
More specifically, it is important that the United States require each company to provide a comprehensive and statistically based risk assessment for every platform that will be involved in production. Following in the steps of the United Kingdom, the requirement for a safety case is the only method that can fundamentally ensure company involvement and participation in safety.
The recent BOEMRE adoption of a SEMS safety program is a step in the right direction. However, simply requiring a safety plan is not enough; a safety case requirement fundamentally transfers safety responsibility to the company. Some evidence of this can be found in BP’s involvement during the recent Deepwater Horizon accident. Royal Dutch Shell recently confirmed that they create safety cases for all of their drilling projects across the globe, regardless of the local regulations. Consequently, BP does not require safety cases on all of its wells at all and did not develop one for Deepwater Horizon. If the United States had a safety case requirement and had instituted it to ensure BP’s compliance, this accident may have never happened. As Royal Dutch Shell’s example, and the example of many other nations, demonstrates, safety cases are an important and essential part of the safety process.
Prior to beginning drilling, each company should be required to comprehensively demonstrate that each part of the installation is safe. In addition, similar to the model used in Norway, the BOEMRE should offer a set of suggested guidelines that companies can look to when drafting their own safety plan. Nevertheless, ultimately the approach should be up to the discretion of the individual rig operator.
The largest argument against safety case legislation is the costs and expense associated with it. In a presentation on the subject, Ken Arnold, a senior technical advisor at WorleyParsons, argues that the adoption of safety case regulation would require a substantial financial investment, alongside a significant time and expertise commitment from both regulatory agencies and industry. In particular, he mentions that the cost of retroactively developing safety cases for the over 3000 platforms currently operating in the Gulf would be enormous.
This argument does have some validity; safety cases would no doubt add some additional expenses. In fact, Norway also supports this perspective, not forcing companies to create extremely comprehensive safety case documents, instead only requiring a risk assessment. Nevertheless, safety cases are essential to develop strong and stringent safety standards within companies.
In fact, while there may be some large financial commitment right now, ultimately, less prescriptive safety-case legislation has the potential to reduce costs. Rather than being forced to comply with strict set of exact regulations, companies would be able to experiment with their options, perhaps finding less expensive and more effective methods to achieve the same safety standards.
In addition, while the estimate $1 million/safety case in the United Kingdom may seem extravagant, it is very insignificant when compared to the devastating impact of an accident or spill cleanup, a cost which can often be in the billions. Ultimately, a safety case approach could offer significant benefits for industry, developing a safer, more efficient, and potentially less expensive offshore environment.