This is Part 7 of a paper written following the BP Oil Spill in 2010 regarding US offshore safety. In this chapter, we offer some additional offshore drilling policy recommendations to improve offshore safety and prevent future disasters.
Secondly, it is important for the United States to encourage a stronger focus on safety, rather than focusing purely on spill prevention. Throughout the United States’ history with offshore drilling, regulatory change and development has consistently been shaped by a focus on preventing oil spills. The Santa Barbara oil spill, the Itzoc oil spill, and, just this year, the Deepwater Horizon accident, have all dramatically shaped public opinion through the environmental consequences of a devastating oil spill.
Consequently, in the North Sea and Canada, public opinion has consistently been shaped and focused by safety, as accident after accident has killed workers. There have been extremely few major spills in the North Sea; in fact, the only major spill in the North Sea was the 1977 Ekofisk Bravo spill. Apart from this minor spill, one that carried no legislative consequences, all accidents in the North Sea have been directly related to safety issues. From the examples of these nations, it is evident that the focus on safety is an effective policy for the United States to embrace.
Ultimately, embracing regulation that specifically tackles safety will invariably impact the incidence of spills. A focus on safety can reduce occurrences of blowouts, fires, collisions, and explosions, effectively eliminating the chance of a spill.
In an interview, Amy Jaffe, a fellow in Energy Policy at the Baker Institute for Public Policy, provided an anecdote that effectively demonstrates this effect. She detailed a rig manager who once told his men that he would like the deck to be whitewashed every week. Regardless of cost, or cleanliness of the deck, the manager wanted the deck whitewashed every single week. While undoubtedly confusing and probably frustrating at first, this policy ultimately significantly reduced any oil spilling. As the workers maintained a stringent focus on keeping the deck clean, they invariably also dramatically reduced spills and the subsequent risk of a major spill or accident. Similarly, in the realm of offshore drilling regulation, a strong focus on safety will invariably result in a much lower risk of spills.
There are several elements of United States regulation that do not adequately compel rig operators to adhere to higher safety standards. To ensure a more compliant offshore industry, the United States needs to enforce harsher penalties and fundamentally transform the nature of inspections. According to a recent study by Lloyd’s, the most serious violations of regulations are given fines of only around $32,000 on average. Even though the potential fines for these serious violations are extremely high, actual penalties have been miserably low. This is in sharp contrast to nations such as Norway and the United Kingdom.
In Norway, while exact numbers are unavailable, it is a specific rule that the penalty for a breach of regulations must ensure that the breach is unprofitable for the operator. In the UK, while average penalties are also relatively low, the potential penalty for a breach is unlimited. In many cases over the past few years, companies have been fined extravagantly up to well over $200,000. In addition, in both Norway and the UK, serious non-fatal safety breaches can be criminal charges punishable through imprisonment of key executives. This does not exist in the United States.
Secondly, US inspectors make an embarrassingly low number of inspections. In the UK in 2001, each inspector made approximately 251 inspections of facilities; in the United States, each inspector only made around 35 inspections. In order to develop a more successful and thorough regulatory system, it is imperative that the United States adopts stricter and more stringent inspection standards; only through effective inspections can regulations actually be consistently enforced.